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1968 (5) TMI 66
Issues Involved:
1. Liability of the surgeon for alleged neglect towards his patient.
2. Adequacy of the preliminary examination and treatment given.
3. Determination of the cause of death.
4. Evaluation of the evidence and findings of the lower courts.
5. Assessment of damages.
Issue-wise Detailed Analysis:
1. Liability of the Surgeon for Alleged Neglect Towards His Patient:
The appeal raises the question of the liability of a surgeon for alleged neglect towards his patient. The respondents claimed that the appellant did not perform the essential preliminary examination before starting treatment and administered morphia without proper assessment. They alleged that the appellant used excessive force for manual traction without proper anesthesia, leading to conditions favorable for embolism or shock, which proved fatal.
The appellant denied these allegations, asserting that he performed a preliminary examination and decided against general anesthesia due to the patient's exhausted condition. He claimed that he only immobilized the fractured femur with slight traction using plaster splints.
2. Adequacy of the Preliminary Examination and Treatment Given:
The trial court found that the appellant had carried out a preliminary examination before starting the boy's treatment. However, the High Court concluded that the appellant's claim of a thorough preliminary examination was untrue. The clinical chart did not record the temperature, raising doubts about the thoroughness of the examination.
The High Court also rejected the appellant's claim of delaying the reduction of the fracture due to swelling, elapsed time since the accident, and the boy's exhaustion from the journey. The court found no evidence of swelling or other symptoms justifying delayed reduction. The appellant's case paper did not accurately reflect the treatment given, further undermining his credibility.
3. Determination of the Cause of Death:
The trial court concluded that the appellant performed the reduction of the fracture with excessive force without anesthesia, resulting in cerebral embolism or shock, causing the boy's death. The High Court concurred, finding that the appellant's treatment led to shock, not cerebral embolism as claimed.
The appellant's letter to respondent 1, expressing remorse and seeking forgiveness, indicated uncertainty about the cause of death, further supporting the conclusion that the treatment caused shock. The appellant's failure to warn respondent 1 about the possibility of fat embolism and the absence of symptoms associated with embolism suggested that the boy's death was due to shock from the treatment.
4. Evaluation of the Evidence and Findings of the Lower Courts:
Both the trial court and the High Court found respondent 1's version of events more credible than the appellant's. Respondent 1, a medical practitioner, was present throughout the treatment and observed the appellant's actions. The courts accepted his testimony that the appellant assured him the boy would recover from the morphia effect by 7 p.m., contradicting the appellant's claim of mere immobilization.
The courts also noted that the appellant's failure to follow medical guidelines for delayed reduction and his reliance on a single morphia injection contradicted his defense. The appellant's apologetic letter and the absence of embolism symptoms further supported the conclusion that the treatment caused shock.
5. Assessment of Damages:
The trial court awarded general damages of Rs. 3,000 to the respondents, finding the appellant guilty of negligence and wrongful acts resulting in the boy's death. The High Court upheld this award, and the Supreme Court found no grounds to interfere with the concurrent findings of the lower courts.
Conclusion:
The Supreme Court dismissed the appeal, affirming the findings of the trial court and the High Court that the appellant was guilty of negligence and wrongful acts towards the patient, leading to the boy's death. The appellant's failure to perform a thorough preliminary examination, use of excessive force without proper anesthesia, and subsequent actions were deemed negligent, justifying the award of damages.
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1968 (5) TMI 65
Issues Involved:
1. Validity of the Bar Council of India's resolution dated 25-2-1963.
2. Equivalence of the petitioner's Diploma in Rural Services to a university degree.
3. Requirement of publication or promulgation of the Bar Council's resolution.
Detailed Analysis:
1. Validity of the Bar Council of India's Resolution Dated 25-2-1963:
The petitioner challenged the validity of the Bar Council of India's resolution dated 25-2-1963, which stated that "no degree in law obtained after the 30th June, 1964 from any University in the territory of India shall be recognised unless such degree has been obtained after undergoing a course of study in law for a minimum period of two years after graduation." The petitioner argued that once the Bar Council of India recognizes a degree from a university, it should not differentiate between degrees obtained before and after graduation. The court, however, held that the Bar Council of India has the authority under Section 24(1)(c)(iii) of the Advocates Act, 1961, to prescribe the class or category of persons entitled to be enrolled as advocates. The court found that the classification made by the Bar Council of India was not arbitrary, unreasonable, or discriminatory, and was reasonably related to the object of the Act, which is to promote legal education and lay down standards of such education. Therefore, the resolution was deemed valid and not violative of Section 24(1)(c)(iii) of the Act.
2. Equivalence of the Petitioner's Diploma in Rural Services to a University Degree:
The petitioner contended that his Diploma in Rural Services should be considered equivalent to a university degree, as it was recognized by 32 universities in India for admission to postgraduate studies and by the Government of Rajasthan for employment purposes. The court examined the definition of "Law Graduate" under Section 2(h) of the Advocates Act, which means "a person who has obtained a Bachelor's degree in law from any University established by law in India." The court concluded that the term "graduation" in the Bar Council's resolution refers to obtaining a degree from a university established by law, and not to diplomas or certificates. The court also noted that the Bar Council of India, an autonomous body consisting of experts, had determined that the petitioner's diploma did not meet the qualifications for enrolment as an advocate. The court found no reason to interfere with the Bar Council's decision, as it was not patently erroneous or unreasonable.
3. Requirement of Publication or Promulgation of the Bar Council's Resolution:
The petitioner argued that the Bar Council's resolution was invalid because it was not published or promulgated, citing the case of Harla v. State of Rajasthan, where the Supreme Court held that laws must be promulgated or published to be operative. The court distinguished the present case from Harla's case, noting that the petitioner was not being punished or penalized under the Advocates Act. The court held that it was not necessary for the Bar Council to promulgate or publish its resolution, as the act of recognizing a degree in law from a university for the purposes of the Act does not constitute a law made by the Bar Council. Therefore, the court found no substance in the petitioner's contention regarding the requirement of publication or promulgation.
Conclusion:
The court dismissed the petition, upholding the validity of the Bar Council of India's resolution and the decision to refuse the petitioner's enrolment as an advocate. The court found that the Bar Council acted within its authority and that the petitioner's diploma did not meet the qualifications prescribed for enrolment. The court also ruled that publication or promulgation of the resolution was not required. No order as to costs was made.
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1968 (5) TMI 64
Issues Involved:
1. Specific performance of a contract
2. Bona fide purchaser for value without notice
3. Doctrine of lis pendens
4. Good faith and notice
5. Possession and inquiry obligations
6. Genuineness of the agreement
Issue-wise Detailed Analysis:
1. Specific Performance of a Contract:
The plaintiff sought specific performance of a contract to sell three rooms of a house for Rs. 4,500/-. The agreement was executed on June 15, 1959, with an advance payment of Rs. 500/-. However, the defendant No. 1 sold two of the rooms to defendant No. 2 for Rs. 4,800/- on July 10, 1959, and registered the sale. The trial court found the agreement not genuine and held defendant No. 2 as a bona fide purchaser without notice. The appellate court reversed the finding on the genuineness but still denied specific performance, affirming defendant No. 2's status as a bona fide purchaser.
2. Bona Fide Purchaser for Value Without Notice:
The appellate court held that defendant No. 2 was a bona fide purchaser for value without notice of the agreement between the plaintiff and defendant No. 1. The plaintiff's suit for specific performance was refused on this ground. The court emphasized that the defendant No. 2 had paid the consideration money in good faith and without notice of the original contract.
3. Doctrine of Lis Pendens:
The plaintiff argued that the sale deed executed on July 10, 1959, by defendant No. 1 in favor of defendant No. 2 was not registered before the suit's institution and should be hit by the doctrine of lis pendens. The court, however, clarified that under Section 47 of the Indian Registration Act, a registered document becomes operative from the date of its execution, not from the date of registration. Thus, defendant No. 2's title was effective from July 10, 1959, before the suit was instituted.
4. Good Faith and Notice:
The court addressed the plaintiff's contention that there was no clear finding on whether defendant No. 2 paid the consideration money in good faith. The court concluded that both the trial and appellate courts found defendant No. 2 had paid in good faith without notice of the original contract. The term "bona fide purchaser" was used to signify this good faith.
5. Possession and Inquiry Obligations:
The plaintiff argued that his possession of the property should have prompted defendant No. 2 to inquire about the nature of his possession. The court noted that both the plaintiff and defendant No. 2 were tenants in the same house, and defendant No. 2 was aware of the plaintiff's possession. There was no change in the nature of the plaintiff's possession to warrant suspicion. Thus, the absence of inquiry did not affect defendant No. 2's good faith.
6. Genuineness of the Agreement:
The defendant No. 1 filed a cross-objection challenging the appellate court's finding of the agreement's genuineness. The trial court had found the agreement not genuine, partly because it was not explained to defendant No. 1, an illiterate pardanashin lady. The appellate court, however, found the agreement genuine after careful consideration of the evidence. The court dismissed the cross-objection, noting that the defendants had not raised the issue of the agreement not being explained to defendant No. 1 in their written statement or evidence.
Conclusion:
The appeal was dismissed, affirming the judgment and decree of the lower court. The plaintiff's suit for specific performance was denied, and the cross-objection by defendant No. 1 was also dismissed. The court upheld the findings that defendant No. 2 was a bona fide purchaser for value without notice and that the agreement was genuine.
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1968 (5) TMI 63
Issues:
1. Validity of the notice of ejectment and service of notice.
2. Interpretation of the Calcutta Thika Tenancy Act.
3. Determination of tenancy rights under the Transfer of Property Act.
Detailed Analysis:
1. The judgment revolves around the validity of the notice of ejectment and the service of the notice. The landlord sought eviction of the tenant based on grounds of default in rent payment, reasonable requirement for development, and unlawful subletting. The tenant disputed these claims, arguing against the validity of the notice and service. The two lower tribunals ruled in favor of the landlord, leading to the tenant seeking relief through the present Rule.
2. The interpretation of the Calcutta Thika Tenancy Act played a crucial role in the judgment. The court discussed the requirement of notice under the Act and its relationship with the Transfer of Property Act. It was highlighted that the Thika Tenancy Act acts as supplementary legislation, imposing restrictions on the landlord's right to eject a tenant. The court emphasized that the tenancy must be determined under the Transfer of Property Act, with additional compliance with the Thika Tenancy Act's requirements.
3. The judgment delved into the determination of tenancy rights under the Transfer of Property Act. It was established that in cases where the Transfer of Property Act mandates a specific notice period, the longer period under the Thika Tenancy Act would prevail. In this case, the court found that a six months' notice was necessary to terminate the tenancy, which was not provided by the landlord. The court also scrutinized the service of the notice, rejecting the service by registered post and personal service due to procedural deficiencies.
4. Ultimately, the court held that the tenant's disputed tenancy was not validly determined due to the insufficiency and invalidity of the notice of ejectment and the lack of proper service. The court, while inclined to rule in favor of the tenant, imposed a condition for the tenant to deposit a specified sum with the Controller within a set timeframe. Failure to comply with this condition would result in the dismissal of the tenant's claim for eviction. The judgment concluded without any order for costs in the Rule.
5. Both judges, P.N. Mookerjee and A.K. Dutt, concurred on the decision, emphasizing the importance of valid notice and service in determining the rights of the landlord and tenant under the relevant tenancy laws.
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1968 (5) TMI 62
Issues Involved:
1. Validity of the levy of Education Cess on 'shop rents' for Arrack, Toddy, and Beer, and on Tree Tax and Tree Rent.
2. Violation of Article 14 of the Constitution due to levy only in the old Mysore Area.
3. Classification of Shop Rent as an excise duty.
4. Classification of Education Cess on Shop Rent as a tax on the business of vending liquor.
5. Absence of a separate procedure for assessment and collection of Education Cess under the Education Act.
6. Defense arguments by the Special Government Pleader, including the applicability of Article 277 of the Constitution, classification of Shop Rent as a tax on luxuries, and whether petitioners can question their liability after agreeing to pay.
Detailed Analysis:
1. Validity of the Levy of Education Cess:
The petitioners, excise contractors, challenged the levy of Education Cess on 'shop rents' for Arrack, Toddy, and Beer, and on Tree Tax and Tree Rent under the Mysore Elementary Education Act, 1941. The court examined the historical context and amendments to the Act, noting that the Act did not originally impose such a levy. The court found that the levy was not legally established under the Act or its amendments, thus rendering the levy invalid.
2. Violation of Article 14 of the Constitution:
The petitioners argued that the levy of Education Cess only in the old Mysore Area violated Article 14 due to unequal treatment within the new State of Mysore. The court referred to precedents and determined that historical reasons and geographical classifications justified the differentiation. Therefore, the levy did not violate Article 14.
3. Classification of Shop Rent as an Excise Duty:
The court analyzed whether Shop Rent could be classified as an excise duty. Referring to the Supreme Court's decision in Shinde Brothers v. Deputy Commr., Raichur, the court concluded that Shop Rent is not an excise duty as it is not levied on the manufacture or production of goods but on the acceptance of a license to sell. Consequently, Education Cess could not be levied on Shop Rent as an excise duty.
4. Classification of Education Cess on Shop Rent as a Tax on Business:
The petitioners contended that Education Cess on Shop Rent was a tax on the business of vending liquor, limited to Rs. 250 per annum under Article 276(2) of the Constitution. The court found that Shop Rent is not a tax but a payment for the exclusive privilege of selling liquor. Therefore, Education Cess on Shop Rent could not be classified as a tax on business.
5. Absence of a Separate Procedure for Assessment and Collection:
The petitioners argued that the Education Act lacked provisions for assessing and collecting Education Cess, making it unenforceable. The court referred to the Supreme Court's ruling in Ahmedabad Manufacturing and Calico Printing Co., Ltd. v. State of Gujarat, which upheld the validity of cesses calculated as a percentage of existing taxes. Thus, the absence of a separate assessment procedure did not invalidate the collection of Education Cess.
6. Defense Arguments by the Special Government Pleader:
The Special Government Pleader raised several defenses:
- Article 277: The court found that the levy did not satisfy the conditions for protection under Article 277, as it was not lawfully levied before the Constitution and the area of benefit had changed.
- Tax on Luxuries: The court examined whether Shop Rent could be classified as a tax on luxuries under Entry 62 of List II. It concluded that Shop Rent is not a tax on luxuries as it is not levied on the consumption of luxury items but on the exclusive privilege of selling liquor.
- Agreement to Pay: The court held that agreements to pay a tax not imposed by law are void and unenforceable, allowing the petitioners to question their liability despite their agreements with the State.
Conclusion:
The court declared the levy of Education Cess on Arrack Shop Rent, Toddy Shop Rent, Beer Shop Rent, Tree Tax, and Tree Rent invalid. It directed the authorities to refund amounts collected illegally and restrained them from collecting such cess in the future. The court left it open for petitioners to seek refunds through suits or other proceedings if necessary.
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1968 (5) TMI 61
Issues:
Petition seeking direction to restrain a Judge appointed as a Commission under the Commissions of Inquiry Act from commencing an inquiry until the conclusion of criminal cases against the petitioners.
Analysis:
The petitioners sought to prevent a Judge appointed as a Commission under the Commissions of Inquiry Act from commencing an inquiry until the conclusion of criminal cases against them. The government appointed the Judge to inquire into the strained relations between two communities in certain villages and the conduct of district officials during specific incidents. The petitioners argued that the inquiry would prejudice their criminal trial, create public opinion against them, and influence witnesses. However, the court found the petitioners' apprehension unfounded, emphasizing that the inquiry focused on public importance matters, not individual conduct during the incidents. The court clarified that the inquiry did not overlap with the criminal trial issues, as it aimed to examine the circumstances leading to the events, not the events themselves.
The court highlighted the provision of Section 6 of the Act, which clearly stated that statements made before the Commission could not be used against individuals in civil or criminal proceedings, except in cases of false evidence. The court dismissed the petitioners' concern that statements made before the Commission could affect their criminal trial, citing Supreme Court precedents. The court also noted that the inquiry by the Commission was not a judicial proceeding of a court of law, emphasizing the inquisitional nature of the Commission's proceedings and its focus on fact-finding rather than adjudication.
The court rejected the petitioners' reliance on previous cases to support their contention that the inquiry by the Commission would prejudice their trial. The court differentiated the present situation from cases where parallel inquiries interfered with ongoing criminal proceedings. Ultimately, the court concluded that there was no basis to restrain the Commission from conducting the inquiry as mandated. Consequently, the petition was dismissed, and each party was directed to bear their own costs, with the security deposit to be refunded to the petitioners.
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1968 (5) TMI 60
Issues:
- Application for winding up opposed by Director
- Allegations of suspension of business and inability to pay debts
- Interpretation of Section 433 of the Companies Act, 1956
- Discretionary power of the Court in winding up a Company
- Examination of evidence and correspondence regarding Company's activities
Analysis:
1. The appeal challenged the order for winding up Rupa Bharati Ltd. under the Companies Act, 1956. The Company faced financial distress, with increasing liabilities and inability to pay debts. The Registrar of Companies sought winding up under Sections 433(c) and (e) of the Act due to the Company's state of affairs and non-compliance with statutory requirements.
2. The Director opposed the winding up, disputing the suspension of business and the loss of paid-up capital. He argued that the Company, being a Film Enterprise, had assets in the form of pictures that could generate income despite depreciation. He also claimed the Company could pay its debts, except for one due to himself, as no demands were made.
3. Section 433 of the Companies Act, 1956 allows winding up if a company suspends business for a year or is unable to pay debts. The Company Judge found that Rupa Bharati Ltd. had suspended business for several years based on audit reports and director's statements. The Court concluded the Company was in a moribund state with no hope of recovery.
4. The Court's discretion in winding up a Company was discussed, emphasizing the need for a fair indication of intent to continue business. Despite some efforts shown in correspondence, the Court found the Company's activities insufficient to warrant a different decision. Additional evidence of limited business activities post-1962 did not sway the Court's opinion.
5. The Court dismissed the appeal, upholding the winding-up order due to the Company's prolonged suspension of business, financial position, and lack of substantial efforts to revive operations. The judgment highlighted the Company's failure to demonstrate a genuine commitment to business activities, leading to the decision to wind up Rupa Bharati Ltd.
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1968 (5) TMI 59
Issues Involved:
1. Constitutionality of the U. P. Public Land (Eviction and Recovery of Rent and Damages) Act XIII of 1959.
2. Whether the petitioners had acquired rights of hereditary tenants under the U. P. Tenancy Act of 1939.
3. Discrimination under Article 14 of the Constitution.
Issue-wise Detailed Analysis:
1. Constitutionality of the U. P. Public Land (Eviction and Recovery of Rent and Damages) Act XIII of 1959:
The petitioners challenged the vires of the Act, arguing it was ultra vires the Constitution, particularly Article 14. They contended that the Act discriminates among unauthorized occupants of Government land by allowing the State to choose between ordinary legal proceedings and the more drastic provisions of the Act. The court examined the history and provisions of the Act, noting that the earlier Government Land (Eviction and Recovery of Rent) Act of 1953 was declared unconstitutional for similar reasons. The court found that the Act provided an additional remedy rather than an exclusive one, thus failing to exclude the jurisdiction of civil and revenue courts. The Act's discretionary nature in initiating proceedings and the absence of a limitation period for eviction made it more onerous than ordinary legal proceedings, thereby violating Article 14. Consequently, the Act was held unconstitutional.
2. Whether the petitioners had acquired rights of hereditary tenants under the U. P. Tenancy Act of 1939:
The petitioners claimed they had acquired hereditary tenant rights under Section 180(2) of the U. P. Tenancy Act of 1939, making them not liable for eviction under the Act. However, the court did not delve deeply into this issue, given its decision on the Act's constitutionality. The court noted that the petitioners' argument was based on their possession for the requisite period, but since the Act itself was found unconstitutional, this issue became moot.
3. Discrimination under Article 14 of the Constitution:
The petitioners argued that the Act discriminates among unauthorized occupants of Government land by allowing the State to choose between ordinary legal proceedings and the Act's provisions. The court agreed, noting that the Act's discretionary nature in initiating proceedings and the absence of a limitation period for eviction made it more onerous than ordinary legal proceedings. This differential treatment of similarly situated persons violated Article 14. The court also highlighted that the Act's provisions allowed the Public Authority to decide whether to proceed under the Act or not, leading to arbitrary discrimination.
Judgment:
The court allowed the writ petitions, quashing the orders of the Public Authority and the District Judge, Nainital. The court held that the U. P. Public Land (Eviction and Recovery of Rent and Damages) Act XIII of 1959 was unconstitutional as it violated Article 14 of the Constitution. The proceedings taken against the petitioners under the Act were declared invalid.
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1968 (5) TMI 58
Issues Involved:
1. Whether the appellant company's action constituted a closure or a lock-out.
2. Legality of the lock-out declaration.
3. Determination of compensation under Section 25FFF of the Industrial Disputes Act, 1947.
Issue-wise Detailed Analysis:
1. Whether the appellant company's action constituted a closure or a lock-out:
The principal question was whether the appellant company's action on October 3, 1967, constituted a closure of its undertaking or a lock-out. The Tribunal found that:
- Since October 3, 1967, there had been no production by the factory, and operatives had not been employed.
- There was no prior intention to close down the undertaking as evidenced by the absence of any Board of Directors or shareholders' meeting between the Annual General Meeting on September 30, 1967, and the notice issued on October 3, 1967.
- The company's trade results for 1966-67 did not suggest any financial necessity for closure.
- The closure was a direct consequence of the alleged illegal activities of the workmen and the refusal by officers and supervisory staff to carry on their normal work due to safety concerns.
The Tribunal concluded that the action taken by the management amounted to a lock-out rather than a closure, influenced by the absence of evidence indicating the winding up of the business or the dissolution of the company. The Tribunal noted that the management's actions, such as issuing notices to vacate quarters and informing authorities about the closure, were consistent with a lock-out disguised as a closure.
2. Legality of the lock-out declaration:
The Tribunal found that the declaration of a lock-out was illegal as it contravened Section 23 of the Industrial Disputes Act, 1947, which prohibits lock-outs during the pendency of certain proceedings. The Tribunal noted that the assertion by the Union that workmen went to work on October 3, 1967, was not challenged by the management. The Tribunal held that the lock-out was declared due to the assembly of workmen at the administrative building demanding higher bonus rates and that the management should have taken disciplinary action against the workmen instead of declaring a lock-out.
3. Determination of compensation under Section 25FFF of the Industrial Disputes Act, 1947:
The Supreme Court examined whether the closure was genuine and bona fide. The Court held that the closure must be genuine and not a mere pretence, and the motive behind the closure is immaterial. The Court found that the management's decision to close the undertaking was influenced by the gherao and the apprehension of danger to the staff's safety. The Court noted that the management's actions, such as issuing notices of termination and discharging employees, indicated a genuine closure of the undertaking. The Court emphasized that the closure of the business itself, not just the place of business, is required for a genuine closure.
The Court further examined whether the closure was due to "unavoidable circumstances beyond the control of the employer" under the proviso to Section 25FFF(1). The Court found that the circumstances, such as the gherao and the apprehension of danger, were not sufficient to constitute unavoidable circumstances beyond the employer's control. The Court held that the burden was on the company to prove that the circumstances were unavoidable and beyond its control, which the company failed to do. Consequently, the Court ruled that compensation should be paid as if the undertaking was closed down "for any reason whatsoever" under Section 25FFF(1).
Conclusion:
The Supreme Court allowed the appeal, setting aside the Tribunal's award, and held that the appellant company closed down its principal undertaking on October 3, 1967. The Court determined that the closure was not due to unavoidable circumstances beyond the employer's control, and thus, the appellant was liable to pay compensation under the principal part of Section 25FFF(1) of the Industrial Disputes Act, 1947. The parties were left to bear their own costs.
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1968 (5) TMI 57
Issues Involved:
1. Whether a doctor's dispensary is a "Commercial Establishment" under the Bombay Shops and Establishments Act, 1948.
2. The interpretation of "Commercial Establishment" under Section 2(4) of the Act.
3. The applicability of the Act to professional establishments.
Detailed Analysis:
1. Whether a doctor's dispensary is a "Commercial Establishment" under the Bombay Shops and Establishments Act, 1948:
The prosecution argued that the appellant, a doctor with a dispensary registered as a "Commercial Establishment," failed to maintain the prescribed register as required under Rule 23(1) of the Rules framed under the Act. The appellant contested this, claiming that a doctor's dispensary does not fall within the definition of a "Commercial Establishment" under the Act, and hence, the provisions of the Act did not apply to his dispensary. The City Magistrate acquitted the appellant, but the High Court of Gujarat convicted him, leading to this appeal.
2. The interpretation of "Commercial Establishment" under Section 2(4) of the Act:
The Supreme Court examined the definition of "Commercial Establishment" under Section 2(4) of the Act, which includes establishments carrying on any business, trade, or profession. The Court noted that the term "Commercial Establishment" is defined broadly and could grammatically include a doctor's consulting room. However, the Court applied the principle of "noscitur a sociis," meaning that words take their meaning from associated words. The Court emphasized that the nature of the activity must be commercial in character, not merely professional.
3. The applicability of the Act to professional establishments:
The Court distinguished between professional activities and commercial activities. It stated that a professional activity must involve intellectual skill and personal qualifications, which are not typically associated with commercial activities. The Court referenced previous cases, including "The National Union of Commercial Employees v. M. R. Meher," where it was held that the work of solicitors is not an industry under the Industrial Disputes Act, 1947, highlighting the distinction between professional services and commercial enterprises.
The Court concluded that for a professional activity to fall under Section 2(4) of the Act, it must be systematically and habitually undertaken for rendering material services to the community with the help of employees, in a manner akin to a trade or business. The Court found that the appellant's dispensary did not meet these criteria, as it was not organized or arranged like a trade or business, and the activity was not commercial in character.
Conclusion:
The Supreme Court held that the appellant's dispensary did not fall within the definition of a "Commercial Establishment" under Section 2(4) of the Act. Consequently, the conviction of the appellant under Section 52(e) of the Act read with Section 62 of the Act and Rule 23(1) of the Rules was deemed illegal. The appeal was allowed, and the judgment of the High Court was set aside.
Final Judgment:
The appeal was allowed, and the conviction and sentence imposed by the High Court were set aside.
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1968 (5) TMI 56
Issues Involved:
1. Interpretation of Section 3(b) of the Drugs Act 1940.
2. Determination of whether Bindra's Antiphlogistic Plaster is a "drug" under the Act.
3. Jurisdiction of the Court at Mathura.
4. Compliance with labeling requirements under Rule 96 of the Drug Rules 1945.
5. Qualification of the Government Analyst to assess Ayurvedic and Unani medicines.
Issue-wise Detailed Analysis:
1. Interpretation of Section 3(b) of the Drugs Act 1940:
The primary issue revolves around the interpretation of Section 3(b) of the Drugs Act 1940, particularly whether the term "exclusively" governs both "used" and "prepared for use." The appellants argued that "exclusively" only modifies "used," suggesting that medicines prepared for use in Ayurvedic or Unani systems should be exempt even if they contain components common to other systems. The High Court, however, held that "exclusively" governs both "used" and "prepared for use," meaning that only medicines used or prepared exclusively for Ayurvedic or Unani systems are exempt from being classified as drugs under the Act.
2. Determination of whether Bindra's Antiphlogistic Plaster is a "drug" under the Act:
The appellants claimed that Bindra's Antiphlogistic Plaster was a Unani preparation and thus should be exempt from the definition of "drug." The Inspector of Drugs argued that the plaster contained Glycerine, Kaolin, and Boric Acid, which are pharmacopoeal drugs and not exclusive to Ayurvedic or Unani systems. The Government Analyst confirmed these ingredients, classifying the plaster as a misbranded drug under Section 17(e) and (f) of the Act. The High Court concluded that whether the plaster falls within the exception is a factual question requiring expert evidence, which should be decided by the trial court.
3. Jurisdiction of the Court at Mathura:
The appellants questioned the jurisdiction of the Mathura court to entertain the complaint. This issue was raised in their petition under Section 561A of the Criminal Procedure Code. However, the judgment does not provide a detailed analysis of this jurisdictional challenge, focusing instead on the substantive issues concerning the definition and labeling of the drug.
4. Compliance with labeling requirements under Rule 96 of the Drug Rules 1945:
The Inspector of Drugs noted that the label of Bindra's Antiphlogistic Plaster did not bear the manufacturing license number and other particulars required by Rule 96 of the Drug Rules 1945. This non-compliance led to the classification of the plaster as a misbranded drug. The appellants did not directly dispute this labeling issue but focused on the broader argument that their preparation was a Unani medicine and thus should not be subjected to these labeling requirements.
5. Qualification of the Government Analyst to assess Ayurvedic and Unani medicines:
The appellants challenged the qualifications of the Government Analyst, arguing that he was not competent to assess medicines prepared according to Ayurvedic or Unani systems. They contended that the Analyst's expertise was limited to pharmacopoeal drugs and not traditional medicines. The judgment does not delve deeply into this argument but implies that the trial court should consider expert evidence to resolve such factual disputes.
Conclusion:
The Supreme Court upheld the High Court's interpretation that the term "exclusively" in Section 3(b) of the Drugs Act 1940 governs both "used" and "prepared for use." The court emphasized that the trial magistrate must determine whether Bindra's Antiphlogistic Plaster is a medicine exclusively used or prepared for use in the Ayurvedic or Unani system based on the evidence presented. The appeals were dismissed, affirming the High Court's decision.
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1968 (5) TMI 55
Issues Involved:
1. Whether brick-earth is a minor mineral under the Punjab Minor Mineral Concession Rules, 1964.
2. Whether the royalty demanded is a tax and if it can be imposed by a rule-making authority.
3. Whether Section 15 of the Mines and Minerals (Regulation and Development) Act, 1957, authorizes the levy of royalty.
4. Whether the imposition of royalty by Rule 20 of the Punjab Rules is unconstitutional and ultra vires.
5. Whether the power to regulate includes the power to impose a tax like royalty.
6. Whether the Rules apply to petitioners who are owners or lessees of private lands.
7. Whether royalty can be demanded only in respect of minor minerals that vest in the State.
8. Whether royalty can be demanded from petitioners who do not hold any mining lease or license from the Government.
9. Whether Shariat Wajib-ul-Arz vests minor mineral rights in the Government.
10. Whether Section 14 of the Act precludes the demand for royalty from petitioners.
Analysis:
1. Brick-earth as a Minor Mineral:
The court found that brick-earth is indeed a minor mineral as per the Central Government notification dated 1st June 1958, under Section 3(e) of the Mines and Minerals (Regulation and Development) Act, 1957. Therefore, the Punjab Minor Mineral Concession Rules, 1964, apply to brick-earth.
2. Nature of Royalty:
The court concluded that royalty is not a tax but a charge made by the owner of the property for the exploitation or excavation of the mineral wealth contained therein. It is a payment for the privilege of extracting minerals and is based on the quantity extracted, thus distinguishing it from a tax or fee.
3. Authority under Section 15:
The court held that Section 15 of the Act authorizes the State Government to make rules for regulating the grant of prospecting licenses and mining leases in respect of minor minerals, including the power to charge royalty. The power to regulate includes the power to impose conditions such as royalty.
4. Constitutionality of Rule 20:
The court found Rule 20 of the Punjab Rules, which empowers the State to charge royalty, to be constitutional and not ultra vires. The royalty is considered a contractual payment for the privilege of extracting minerals, not a tax.
5. Power to Regulate:
The court determined that the power to regulate includes the power to impose conditions like royalty. The imposition of royalty is a common and usual term of mining leases and is integral to the regulation of minor minerals.
6. Application to Owners or Lessees of Private Lands:
The court noted that the Punjab Minor Mineral Concession Rules, 1964, make provisions for the grant of mineral concessions in respect of minor minerals found in lands where such minerals vest in persons other than the Government. Hence, the rules apply to the petitioners who are owners or lessees of private lands.
7. Royalty on Minor Minerals Vesting in the State:
The court held that royalty can only be demanded in respect of minor minerals that vest in the State. The State has not claimed the right to charge royalty on minor minerals that vest in private individuals.
8. Requirement of Mining Lease or License:
The court emphasized that royalty is payable only by the holder of a mining lease or license. Since the petitioners do not hold any such lease or license, they cannot be compelled to pay royalty.
9. Shariat Wajib-ul-Arz and Mineral Rights:
The court found that the Shariat Wajib-ul-Arz documents do not specifically mention brick-earth as a mineral that belongs to the Government. Therefore, in the absence of specific mention, brick-earth is presumed to belong to the landowners under Section 42(2) of the Punjab Land Revenue Act, 1887.
10. Section 14 and Demand for Royalty:
The court clarified that Section 14 of the Act, which excludes minor minerals from the operation of Sections 4 to 13, does not preclude the State from demanding royalty. The authority to charge royalty is derived from Section 15, which empowers the State to make rules for regulating minor minerals.
Conclusion:
The court dismissed the petitions, holding that the State of Punjab has the authority to charge royalty on minor minerals extracted from lands where such minerals vest in the Government. The petitioners' claims regarding the ownership of minor minerals can be settled through appropriate proceedings in a court of law.
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1968 (5) TMI 54
Issues Involved:
1. Validity of the order of detention under the Preventive Detention Act.
2. Compliance with the requirement of communicating grounds of detention in a language understood by the detenue.
3. Validity of the fresh detention order issued after revocation of the initial order.
Issue-wise Detailed Analysis:
1. Validity of the order of detention under the Preventive Detention Act:
The appellant was detained under the Preventive Detention Act, 1950, on the grounds of acting in a manner prejudicial to the maintenance of public order. The grounds included breaches of public peace, illicit business in opium, ganja, bhang, country liquor, riotous conduct, criminal intimidation, and assault. The appellant challenged the validity of the detention order, arguing that the grounds and the order were served in English, which he did not understand. The District Magistrate subsequently provided an Oriya translation, but this was after the five-day period prescribed by Section 7 of the Act.
2. Compliance with the requirement of communicating grounds of detention in a language understood by the detenue:
The court referenced the case of Harikisan v. The State of Maharashtra, where it was held that serving the grounds of detention in a language not understood by the detenue and refusing a translation violated Article 22(5) of the Constitution. The court emphasized that communication must mean imparting sufficient knowledge of the grounds to the detenue, enabling him to make an effective representation. In this case, the grounds served on the appellant ran into fourteen typed pages and included references to activities over thirteen years. The court concluded that mere oral explanation without a written translation in a language understood by the appellant amounted to a denial of the right to be communicated the grounds and to make a representation.
3. Validity of the fresh detention order issued after revocation of the initial order:
The State of Orissa revoked the initial detention order due to formal defects and issued a fresh order on January 28, 1968, without any fresh facts arising after the revocation. The court noted that Section 13(2) of the Preventive Detention Act permits a fresh detention order only if fresh facts have arisen after the revocation or expiry of the previous order. The court held that the fresh order was invalid as it was not based on any new facts. The court rejected the argument that the detaining authority could issue a fresh order on the same grounds if the previous order was defective or had become illegal due to non-compliance with statutory provisions. The court emphasized that the language of Section 13(2) did not support a restricted interpretation and included revocation of both valid and invalid orders.
Conclusion:
The court concluded that the fresh detention order dated January 28, 1968, was invalid as it was not based on any fresh facts arising after the revocation of the previous order. The court ordered the release of the appellant from custody.
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1968 (5) TMI 53
Issues Involved:
1. Whether the transactions in the specimen bills amount to sales.
2. Determination of the nature of the transactions in terms of contracts for work and labour versus contracts for sale of goods.
3. Applicability of severability in mixed contracts involving both work and labour and sale of goods.
4. Taxability of different components of the transactions.
Detailed Analysis:
1. Whether the transactions in the specimen bills amount to sales:
The core issue was whether the transactions in the three specimen bills (No. 60293, No. 95198, and No. 16531) amounted to sales under the Bombay Sales Tax Act, 1959. The Commissioner of Sales Tax held that all transactions except the developing of the customer's film roll in bill No. 95198 amounted to sales. This decision was upheld by the Sales Tax Tribunal, which emphasized that the essence of the photographer's business was the sale of goods rather than work and labour. The applicants contended that the transactions were primarily for rendering services involving artistic skill.
2. Determination of the nature of the transactions in terms of contracts for work and labour versus contracts for sale of goods:
The judgment referenced the classic distinction made in Halsbury's Laws of England, which states that a contract of sale is primarily for the transfer of property in goods, whereas a contract for work and labour does not result in a sale even if some property passes incidentally. The Supreme Court's decision in the State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. was pivotal, establishing that for a transaction to be a sale, there must be an agreement to sell the very goods in which property eventually passes. The judgment also noted that the essence of a contract involving both work and labour and the transfer of property must be examined to determine its true nature.
3. Applicability of severability in mixed contracts involving both work and labour and sale of goods:
The judgment emphasized the need to determine whether the transactions were "entire and indivisible" or severable into distinct contracts for work and labour and for the sale of goods. It criticized previous decisions for not considering severability and applied the principles laid down in Sundaram Motors (Private) Ltd. v. The State of Madras and A.A. Jariwala and Brothers v. State of Gujarat. These principles state that the intention of the parties and the existence of an agreement to sell materials as such are crucial in determining severability.
4. Taxability of different components of the transactions:
The court analyzed each type of transaction separately:
- Bill No. 60293 (Enlargements from Negatives): The transaction was deemed severable into two contracts: one for the work of preparing the enlargements, which is a contract for skill and labour, and the other for the sale of the enlarged photographs. Only the latter was taxable.
- Bill No. 95198 (Developing Film Roll and Taking Prints): This transaction involved two contracts: one for developing the film roll, which was a contract for skill and labour, and the other for taking prints, which was a sale. Only the sale of prints was taxable.
- Bill No. 16531 (Taking Photograph and Supplying Prints): This comprehensive transaction was severable into three contracts: one for taking the photograph (skill and labour), one for developing the film (skill and labour), and one for supplying the prints (sale). Only the supply of prints was taxable.
The judgment concluded that the transactions embodied in the three bills were severable, and only the parts involving the sale of goods were liable to sales tax. The court ordered the department to pay the applicants' costs of the references, fixed at Rs. 250 for all three references.
Conclusion:
The transactions in the specimen bills involved distinct and severable contracts for work and labour and for the sale of goods. Only the sale components of these transactions were liable to sales tax. The judgment highlighted the importance of examining the intention of the parties and the nature of the contracts to determine tax liability accurately.
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1968 (5) TMI 52
Issues Involved
1. Competence of the appeal due to the non-deposit of the entire amount of admitted tax.
2. Interpretation of "the amount of tax admitted by the appellant to be due" under the proviso to section 9(1) of the U.P. Sales Tax Act.
3. Determination of the admitted tax liability for the purpose of filing an appeal.
Detailed Analysis
1. Competence of the Appeal Due to Non-Deposit of the Entire Amount of Admitted Tax
The petitioner, a dealer in toilet goods, cosmetics, and other articles, submitted a return for the assessment year 1963-64, which included the turnover of imported goods liable to tax at a single point. The Sales Tax Officer assessed the turnover of imported goods at Rs. 2,60,000. The petitioner appealed, claiming the taxable turnover was Rs. 85,000 and deposited Rs. 7,001.73 as admitted tax. The Sales Tax Officer objected, arguing that the entire amount of admitted tax had not been deposited, as the turnover disclosed in the return was Rs. 1,11,844.02. The Additional Assistant Commissioner (Judicial) upheld this objection and dismissed the appeal as incompetent. The Judge (Revisions) also dismissed the revision application.
2. Interpretation of "the Amount of Tax Admitted by the Appellant to be Due" Under the Proviso to Section 9(1) of the U.P. Sales Tax Act
The core issue is whether the admitted tax liability for the purpose of the proviso to section 9(1) should be based on the turnover disclosed in the return or the turnover claimed by the appellant in the memorandum of appeal. The petitioner argued that the amount of admitted tax should be based on the turnover admitted at the time of filing the appeal. Conversely, the respondent contended that the turnover shown in the return should be conclusive for calculating the admitted tax liability.
3. Determination of the Admitted Tax Liability for the Purpose of Filing an Appeal
The court examined section 7(1-A) and rule 41(2) of the U.P. Sales Tax Rules, which require a dealer to deposit the tax due on the turnover shown in the return before submitting it. If the dealer fails to comply, the Sales Tax Officer can make a best judgment assessment and initiate recovery proceedings. Section 9(1) allows a dealer to appeal against an assessment, provided satisfactory proof of the payment of the admitted tax is submitted.
The court distinguished between the tax liability at the return stage and the appellate stage. At the return stage, the dealer must deposit the tax due based on the turnover disclosed in the return. At the appellate stage, the dealer must deposit the tax admitted to be due, which may differ from the return if the dealer disputes the turnover or tax rate in the appeal.
The court concluded that the admitted tax liability for the purpose of the proviso to section 9(1) should be based on the position taken by the dealer in the memorandum of appeal. The appellate authority should determine the admitted tax liability by examining the grounds and relief sought in the appeal, not solely based on the return filed.
In this case, the Additional Assistant Commissioner (Judicial) erred by relying on the return's statements instead of the memorandum of appeal. The petitioner's claim that the turnover was Rs. 85,000, not Rs. 1,11,844.02, should have been considered.
The court quashed the orders of the Additional Assistant Commissioner (Judicial) and the Judge (Revisions) and directed the Additional Assistant Commissioner (Judicial) to reconsider the appeal's competence and dispose of it afresh in accordance with the law.
Conclusion
The petition was allowed, and the orders of the Additional Assistant Commissioner (Judicial) and the Judge (Revisions) were quashed. The appeal was remanded for reconsideration, with the direction to assess the admitted tax liability based on the grounds of appeal rather than the return filed.
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1968 (5) TMI 51
Issues:
- Application for reference to High Court under section 21(1) of the Bengal Finance (Sales Tax) Act, 1941 rejected by Chief Commissioner.
- Violation of natural justice in the disposal of the application by the Chief Commissioner.
- Exercise of suo motu power by the High Court under Article 227 of the Constitution.
- Setting aside and quashing the ex parte order and directing the application to be disposed of in accordance with law.
- Observations on the need for proper court-fee, certified copy of the order, and amendment in the memorandum of parties.
- Declining the sales tax reference.
Analysis:
The case involved an application made under section 21(1) of the Bengal Finance (Sales Tax) Act, 1941, for reference to the High Court, which was rejected by the Chief Commissioner without proper consideration. The High Court, exercising its power under Article 227 of the Constitution, reviewed the matter for compliance with natural justice principles. It was found that the application was entertained without the required court-fee stamp and certified copy of the order, and the petitioner was not given a fair hearing before the rejection. This lack of procedural fairness was deemed unacceptable by the Court, emphasizing the importance of natural justice in quasi-judicial and administrative functions.
The High Court highlighted the obligation of authorities to ensure proper procedures and fair hearings, irrespective of their executive roles. The Court emphasized the fundamental rule of natural justice that every individual has the right to be heard before a decision affecting their rights is made. The failure to provide such an opportunity was considered a serious violation in this case, leading to the ex parte rejection being set aside and quashed by the High Court.
In exercising its power under Article 227, the High Court directed that the application be reconsidered in accordance with the law, taking into account the observations made regarding the necessity of proper court-fees and the certified copy of the order. Additionally, the Court noted the petitioner's oversight in not amending the memorandum of parties to reflect the constitutional change, indicating a lack of attention to detail.
Ultimately, the High Court declined the sales tax reference due to the procedural irregularities and lack of fair hearing in the initial disposal of the application. The Court stressed the importance of upholding principles of natural justice and fair procedure in administrative and quasi-judicial actions, ensuring that all parties are given a reasonable opportunity to present their case before a decision is made.
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1968 (5) TMI 50
Issues Involved:
1. Compliance with the first proviso to sub-section (1) of section 9 of the U.P. Sales Tax Act, 1948.
2. Interpretation of the term "entertained" in the context of appeals under the U.P. Sales Tax Act.
3. Application of Section 5 of the Indian Limitation Act for condoning delay in depositing the admitted tax.
4. Validity of the appellate authority's decision to dismiss the appeal for non-payment of the admitted tax within the prescribed period.
Detailed Analysis:
1. Compliance with the first proviso to sub-section (1) of section 9 of the U.P. Sales Tax Act, 1948:
The petitioner, a dealer in cycles and cycle parts, appealed against an assessment order dated 29th August 1966, which fixed their net turnover at Rs. 2,60,000 and assessed Rs. 12,940 as payable sales tax. The appeal was filed on 19th September 1966, with an admitted tax amount of Rs. 1,612.91. However, the petitioner had deposited only Rs. 1,610.91 by that time, falling short by Rs. 2, which was later deposited in January 1967. The appellate authority dismissed the appeal on the grounds that it was not accompanied by satisfactory proof of the payment of the admitted tax as required by the first proviso to sub-section (1) of section 9 of the Act and sub-rule (2) of rule 66.
2. Interpretation of the term "entertained" in the context of appeals under the U.P. Sales Tax Act:
The term "entertained" in the first proviso to sub-section (1) of section 9 of the Act was central to the case. The court referred to previous judgments and the Supreme Court's decision in Lakshmiratan Engineering Works Ltd. v. Assistant Commissioner, Kanpur, which clarified that "entertained" means the first occasion on which the court takes up the matter for consideration. This could be at the admission stage or the hearing of the appeal. The Supreme Court emphasized that satisfactory proof of payment of the admitted tax must be presented within the period of limitation for the appeal.
3. Application of Section 5 of the Indian Limitation Act for condoning delay in depositing the admitted tax:
The petitioner argued that the Assistant Commissioner should have condoned the delay in depositing the admitted tax under section 5 of the Indian Limitation Act. However, the court held that Section 5 pertains to condoning delays in filing appeals or applications, not in fulfilling conditions precedent like tax deposits. The Assistant Commissioner correctly ruled that there was no room to apply Section 5 for condoning the delay in depositing the admitted tax.
4. Validity of the appellate authority's decision to dismiss the appeal for non-payment of the admitted tax within the prescribed period:
The court examined whether the petitioner complied with the requirement to deposit the admitted tax within the limitation period. It was established that the admitted tax had to be paid within 30 days from the date of service of the notice of assessment, coinciding with the period for filing the appeal. The petitioner failed to deposit the full amount within this period, making the appeal non-maintainable. The court upheld the Assistant Commissioner's decision to dismiss the appeal, emphasizing that the admitted tax must be deposited within the prescribed period for the appeal to be entertained.
Conclusion:
The petition was dismissed with costs, affirming that the appeal was rightly dismissed due to non-compliance with the statutory requirement of depositing the admitted tax within the prescribed period. The court reiterated the importance of adhering to procedural requirements for appeals under the U.P. Sales Tax Act.
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1968 (5) TMI 49
Issues Involved:
1. Whether the supply of goods by the petitioner-society to its members constitutes a sale under the Orissa Sales Tax Act, 1947.
2. Whether the petitioner-society qualifies as a "dealer" under section 2(c) of the Act.
3. Whether section 2(c) of the Act, including societies, clubs, or associations within the definition of "dealer," is ultra vires of the Legislature.
4. Whether the sales or supplies by the petitioner-society to its members are in the course of business.
Issue-wise Detailed Analysis:
1. Whether the supply of goods by the petitioner-society to its members constitutes a sale under the Orissa Sales Tax Act, 1947:
The petitioner contended that the supply of goods to its members does not constitute a sale as defined under the Orissa Sales Tax Act, 1947, as there is no transfer of absolute or general ownership in the property from one to another for consideration in cash. It was argued that the society and its members are not independent legal persons, and the property is jointly owned by all members. However, the court held that the petitioner-society is a distinct legal entity by being a body corporate with an independent existence, capable of transferring property. The court concluded that the supply of goods by the society to its members for a price constitutes a sale as defined in the Act.
2. Whether the petitioner-society qualifies as a "dealer" under section 2(c) of the Act:
The petitioner argued that it is not a "dealer" as defined in section 2(c) of the Act, as its activities are not in the course of business. The court examined the definition of "dealer" which includes any person who carries on the business of purchasing or selling or supplying goods, and specifically includes societies, clubs, or associations supplying goods to their members. The court found that the petitioner-society, by supplying goods to its members for a price, falls within the definition of "dealer" under the Act.
3. Whether section 2(c) of the Act, including societies, clubs, or associations within the definition of "dealer," is ultra vires of the Legislature:
The petitioner argued that section 2(c) of the Act, as it includes societies, clubs, or associations within the definition of "dealer," is ultra vires of the Legislature. The court referred to the Supreme Court's decision in Deputy Commercial Tax Officer v. Enfield India Ltd. Co-operative Canteen Ltd., which held that the State Legislature has the power to define "dealer" and include certain bodies within its meaning. The court concluded that the inclusion of societies, clubs, or associations within the definition of "dealer" is within the legislative competence of the State Legislature and is not ultra vires.
4. Whether the sales or supplies by the petitioner-society to its members are in the course of business:
The petitioner contended that the sales or supplies to its members are not in the course of business, as there is no profit-motive. The court referred to the Supreme Court's observation that a scheme for supplying goods to members by a society for a price may partake of the nature of trade, even if not actuated by a profit-motive. The court held that the existence of a profit-motive is not essential for the creation of a taxable entity and that the petitioner-society's activities of supplying goods to its members for a price are in the course of business, making it liable to sales tax.
Conclusion:
The court dismissed the petition, holding that the supply of goods by the petitioner-society to its members constitutes a sale under the Orissa Sales Tax Act, 1947, the petitioner-society qualifies as a "dealer" under section 2(c) of the Act, the inclusion of societies, clubs, or associations within the definition of "dealer" is not ultra vires of the Legislature, and the sales or supplies by the petitioner-society to its members are in the course of business. The petitioner-society is thus liable to be assessed to sales tax.
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1968 (5) TMI 48
Issues Involved:
1. Violation of Article 303 of the Constitution of India by Section 5(3) of the Punjab General Sales Tax Act.
2. Violation of Article 14 of the Constitution by Section 5(3).
3. Violation of Section 15 of the Central Sales Tax Act by Section 5(3).
4. Validity of assessments quashed by the Supreme Court being validated by the Legislature.
Detailed Analysis:
Point No. (1): Violation of Article 303 of the Constitution of India
The petitioners argued that Section 5(3)(a)(ii) of the Punjab General Sales Tax Act discriminates against residents of Punjab by levying purchase tax on goods consumed within the state, while no such tax is levied if the goods are exported out of Punjab. The learned counsel for the State of Punjab contended that Article 303 does not apply to taxation laws and is limited to trade and commerce entries. The court agreed with the State's argument, stating that taxation is a distinct matter for legislative competence, and Article 303 does not come into play. The court referenced decisions from East India Sandal Oil Distilleries Ltd., M. P. V. Sundararamier & Co., and Atiabari Tea Co. Ltd. to support this view. The court concluded that there was no discrimination as alleged, and the petitioners' argument lacked merit.
Point No. (2): Violation of Article 14 of the Constitution
The petitioners contended that Section 5(3) discriminates between consumers within and outside Punjab. The court dismissed this argument, stating that there is no discrimination in the case of declared goods like cotton. The purchase tax is levied equally whether the goods are consumed within the state or sent outside in inter-State trade. Therefore, the argument of discrimination under Article 14 was rejected.
Point No. (3): Violation of Section 15 of the Central Sales Tax Act
The petitioners argued that Section 5(3) violates Section 15 of the Central Sales Tax Act by potentially exceeding the tax limit when market fees are added to the purchase tax. The court clarified that market fees are not taxes but charges for services rendered, referencing the Supreme Court decision in Mohammad Hussain Gulam Mohammad and Another v. The State of Bombay and Another. Thus, the argument was dismissed. The court also addressed the issue of determining taxable turnover, stating that the amendments to Section 5(3) removed the infirmities pointed out by the Supreme Court in Bhawani Cotton Mills' case. The court concluded that the amended Act is not open to challenge on these grounds.
Point No. (4): Validity of Assessments Quashed by the Supreme Court
The petitioners argued that the Legislature could not validate assessments quashed by the Supreme Court. The court referenced several Supreme Court decisions, including Sadasib Prakash Brahmchari v. The State of Orissa and State of Uttar Pradesh v. Dr. Vijay Anand Maharaj, to assert that the Legislature has the power to validate laws declared invalid by courts. Therefore, this contention was also rejected.
Conclusion:
The petition was dismissed, and the court found no merit in any of the contentions raised by the petitioners. There was no order as to costs.
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1968 (5) TMI 47
Issues Involved:
1. Preliminary objection regarding alternative remedy.
2. Definition of "goods" under the Punjab General Sales Tax Act and the Central Sales Tax Act.
3. Whether electric energy qualifies as "goods" under the relevant Acts.
Issue-wise Detailed Analysis:
1. Preliminary Objection Regarding Alternative Remedy:
The respondents contended that the writ petition should not be entertained due to the availability of an alternative remedy. The court dismissed this objection, noting that the relevant sections of the Punjab General Sales Tax Act, specifically sections 11, 20, and 21, did not provide for an appeal or revision against the refusal to register a dealer. Section 22, which allows for a question to be referred to the High Court, was also deemed inapplicable. The court concluded that there was no other remedy available to the petitioner, making the petition under Articles 226/227 of the Constitution competent.
2. Definition of "Goods" Under the Punjab General Sales Tax Act and the Central Sales Tax Act:
The court examined the definition of "goods" under both the Punjab General Sales Tax Act and the Central Sales Tax Act, which are identical: "goods" means all kinds of movable property other than newspapers, actionable claims, stocks, shares, or securities. The court also referred to the definitions of "movable property" and "immovable property" in the Central General Clauses Act and the Punjab General Clauses Act. The court emphasized that the scope of "movable property" is very wide and includes anything that is not immovable property.
3. Whether Electric Energy Qualifies as "Goods" Under the Relevant Acts:
The court analyzed whether electric energy could be considered "goods" within the meaning of the relevant Acts. It noted that electric energy, being storable, transportable, and measurable, has the attributes of movable property. The court rejected the contention that electric energy is not tangible and, therefore, not property. It stated that "property" includes both tangible and intangible items and that electric energy, like gas or water, is capable of sale and subject to theft under section 39 of the Indian Electricity Act.
The court cited several precedents to support its conclusion:
- In *Erie County Natural Gas and Fuel Company Limited v. Samuel S. Carroll and Another*, gas was treated as property.
- In *Kumbakonam Electric Supply Corporation Ltd. v. Joint Commercial Tax Officer*, electricity was held to be "goods" under the Madras General Sales Tax Act and the Central Sales Tax Act.
- In *Nainital Hotel Co. Ltd. v. Municipal Board, Nainital*, electric energy was considered "goods" for the purposes of the Limitation Act.
- In *M/s. Nizam Sugar Factory Ltd. v. The Commissioner of Sales Tax*, steam was held to be "goods" under the Hyderabad General Sales Tax Act.
The court also referred to an order by the Excise and Taxation Commissioner, Punjab, in the case of M/s. Kumar Textile Mills, Amritsar, which had held that electricity was not "goods." The court found this reasoning unconvincing and noted that the Punjab General Sales Tax Act itself listed electric energy as tax-free "goods" under Schedule B, item 31.
Conclusion:
The court concluded that electric energy falls within the definition of "goods" under both the Punjab and Central Acts. The orders rejecting the petitioner's application for registration were deemed erroneous. The court allowed the petition, quashed the impugned orders, and directed the Excise and Taxation Officer, Sangrur, to dispose of the petitioner's application for registration as a dealer in accordance with the court's observations. No order as to costs was made.
Petition allowed.
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