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1970 (5) TMI 71
Issues Involved:
1. Legality of the partnership deed involving the transfer of a route permit.
2. Maintainability of the suit for dissolution of partnership and rendition of accounts.
3. Validity of the transfer of the truck and its route permit under the Motor Vehicles Act.
Detailed Analysis:
1. Legality of the Partnership Deed Involving the Transfer of a Route Permit:
The primary issue revolves around whether the partnership deed, which included the transfer of a route permit, is legal under the Motor Vehicles Act. The partnership deed dated 3rd January 1969, explicitly stated that the truck and its route permit were to be shared among the partners, with the defendant initially owning the truck and permit entirely. The defendant argued that under Sections 42 and 59 of the Motor Vehicles Act, the transfer of a route permit without the permission of the Transport Authority is prohibited. The court noted that Section 59 explicitly states that a permit shall not be transferable from one person to another except with the permission of the Transport Authority. Since the partnership deed included the transfer of 2/3rd of the permit without such permission, it was deemed illegal.
2. Maintainability of the Suit for Dissolution of Partnership and Rendition of Accounts:
The defendant contended that the suit for dissolution of partnership and rendition of accounts was not maintainable due to the illegality of the partnership deed. The court examined various precedents, including AIR 1963 Mad 413, which held that partnerships involving the transfer of permits without proper authorization are illegal and unenforceable. The court also considered the argument that the partnership was only an agreement to seek permission for the transfer. However, it concluded that the partnership deed effectively transferred ownership of the truck and permit from 1st January 1969, without the necessary permission, making the partnership illegal and the suit unsustainable.
3. Validity of the Transfer of the Truck and Its Route Permit Under the Motor Vehicles Act:
The court scrutinized the terms of the partnership deed, which valued the truck and its route permit collectively at Rs. 21,000/-. It was argued that the material of the truck could be transferred without the Transport Authority's permission. However, the court found that the valuation and transfer were indivisible and intertwined with the illegal transfer of the permit. Citing legal principles, the court stated that if any part of the consideration supporting a contract is void, it taints the entire contract with illegality. Consequently, the entire partnership deed was invalidated.
Conclusion:
The court held that the partnership deed was illegal due to the unauthorized transfer of the route permit, rendering the suit for dissolution and rendition of accounts unmaintainable. The revision petition was allowed, and the order of the Sub-Judge, Ramban, was set aside. However, the parties were directed to bear their own costs throughout.
Separate Judgments:
- S. Murtaza Fazal Ali, C.J.: Agreed with the judgment.
- Raja Jaswant Singh, J.: Also agreed with the judgment.
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1970 (5) TMI 70
Issues Involved:
1. Validity of the revised advertisement.
2. Validity of the interviews conducted by the Public Service Commission.
3. Authority of the Vice-Chancellor to refer the matter back for reconsideration.
4. Legality of the alteration of the minutes of the Syndicate meeting.
5. Jurisdiction of the High Court to issue certiorari.
Issue-wise Detailed Analysis:
1. Validity of the Revised Advertisement:
The Chancellor annulled the Syndicate's resolution on the ground that the revised advertisement, which substituted the words "in the subject" with "in Political Science or in any allied subject like History and Economics," effectively amended the University Statute. The Chancellor argued that such an amendment could only be made by framing a new statute under Sections 30 and 31 of the Act, and not unilaterally by the Vice-Chancellor. The Supreme Court, however, found that the Statute did not specify that the Master's degree had to be "in the subject" for which the appointment was made. The Vice-Chancellor's revised advertisement was intended to correct the error in the Commission's original advertisement, which was inconsistent with the Statute. The Court concluded that the Vice-Chancellor did not modify the Statute but clarified its correct interpretation, thus the revised advertisement was valid.
2. Validity of the Interviews Conducted by the Public Service Commission:
The Chancellor held that the interviews were invalid because one of the two required experts was not present. The Supreme Court disagreed, stating that Section 26(2) of the Act required the experts to be "associated" with the Commission, which did not necessarily mean their physical presence at the interviews. The experts could provide their advice by post or other means. The Court found that the Commission had the benefit of expert advice as required, and thus the interviews and subsequent recommendation were valid.
3. Authority of the Vice-Chancellor to Refer the Matter Back for Reconsideration:
The Chancellor argued that the Vice-Chancellor acted without the Syndicate's authority in referring the matter back to the Commission. The Supreme Court found that the Syndicate had indeed decided not to accept the Commission's recommendation on May 7, 1963. This decision required the matter to be referred back to the Commission under Section 26(4) of the Act. The Vice-Chancellor's action was a necessary consequence of the Syndicate's decision and did not require further approval.
4. Legality of the Alteration of the Minutes of the Syndicate Meeting:
The Chancellor held that altering the minutes of the May 7, 1963, meeting on July 3, 1963, constituted a revision of the earlier decision, which was not allowed within six months under a prior resolution of the Syndicate. The Supreme Court found that the alteration was to correct an inaccuracy in the minutes and not to change the decision itself. The Court held that minutes could be altered before being signed to reflect the actual decision taken, and no objection was raised by the members present during the alteration. Thus, the alteration was valid.
5. Jurisdiction of the High Court to Issue Certiorari:
The appellant's counsel argued that the High Court had no jurisdiction to issue certiorari as the Chancellor's order did not involve any jurisdictional error or breach of natural justice. The Supreme Court held that a superior court could issue certiorari if there was an apparent error of law on the record or a misconstruction of a law affecting jurisdiction. The Court found that the Chancellor's annulment of the Syndicate's resolution was based on a misinterpretation of the Act and the University Statute, thus justifying the High Court's issuance of certiorari.
Conclusion:
The Supreme Court upheld the High Court's decision to quash the Chancellor's order, finding that the revised advertisement, the interviews, the Vice-Chancellor's referral of the matter, and the alteration of the minutes were all in accordance with the Act and the University Statutes. The Chancellor had no jurisdiction to annul the Syndicate's resolution, and the High Court was correct in its interpretation and issuance of certiorari. The appeal was dismissed, with each party bearing its own costs.
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1970 (5) TMI 69
Issues Involved:
1. Whether the laminated jute goods produced by the petitioner in its Converter Unit are subject to excise duty under Item 22A of the First Schedule to the Central Excises and Salt Act, 1944.
2. Whether the differential weight caused by the lamination process should attract excise duty.
3. The applicability of Rule 10 or Rule 10A of the Central Excise Rules in the context of the demand notice.
4. The maintainability of the writ petition in light of alternative remedies available under the Act.
Detailed Analysis:
1. Excise Duty on Laminated Jute Goods:
The primary issue was whether the laminated jute goods produced by the petitioner in its Converter Unit were subject to excise duty under Item 22A of the First Schedule to the Central Excises and Salt Act, 1944. The petitioner argued that the Converter Division was a separate unit from its jute mills, while the respondents contended that it was part of the same premises. The court examined whether the process of laminating jute cloth with polythene and other materials constituted the manufacture of new jute goods. The court concluded that merely coating jute cloth with a solution did not change its character into a new product. Thus, the laminated jute goods did not qualify as new jute goods under Item 22A, and no excise duty was chargeable on them.
2. Differential Weight and Excise Duty:
The petitioner challenged the demand for excise duty on the differential weight caused by the lamination process. The court noted that the authorities were attempting to charge duty on the weight of materials used for lamination (polythene, gum tape, etc.), which was not permissible. The court held that no excise duty was chargeable on the differential weight, as it represented the weight of non-jute materials used in the lamination process. The authorities could not indirectly charge excise duty on these materials.
3. Applicability of Rule 10 or Rule 10A:
The court did not find it necessary to decide whether Rule 10 or Rule 10A of the Central Excise Rules was applicable in this case. The primary focus was on the legality of charging excise duty on the differential weight of laminated jute goods.
4. Maintainability of the Writ Petition:
The respondents argued that the writ petition was not maintainable due to the existence of alternative remedies under the Act, such as appeal and revision. The court acknowledged that while alternative remedies were available, the petitioner had already pursued these options without success. Given the circumstances, the court exercised its discretion to issue high prerogative writs, finding that it would be futile to require the petitioner to pursue further appeals and revisions.
Conclusion:
The court held that no excise duty was chargeable on the differential weight of laminated jute goods, as it represented the weight of materials used for lamination, not the manufacture of new jute goods. The impugned notice of demand was quashed as being without authority of law. The court issued a Writ of Certiorari quashing the demand notice and a Writ of Mandamus and Prohibition directing the respondents to refrain from enforcing the notice. There was no order as to costs.
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1970 (5) TMI 68
Issues:
1. Jurisdiction of the court to try a suit regarding defamatory statements made in Parliament.
2. Interpretation of Article 105(2) of the Constitution regarding immunity of Members of Parliament for statements made in Parliament.
3. Applicability of analogies from other legislative bodies in interpreting constitutional provisions.
4. Procedure for lodging an appeal and the significance of notice of lodgment in the Supreme Court.
Jurisdiction of the Court:
The case involved an appeal from the High Court of Delhi's order rejecting a plaint seeking damages for defamatory statements made by certain individuals in Parliament. The High Court held that no court proceedings could be initiated for statements made in Parliament based on Article 105(2) of the Constitution. The High Court certified the case for appeal to the Supreme Court under Art. 133(1)(a) of the Constitution.
Interpretation of Article 105(2):
The Supreme Court analyzed Article 105(2) of the Constitution, which provides immunity to Members of Parliament for statements made in Parliament. The Court emphasized that the immunity is comprehensive and absolute, protecting MPs from legal consequences for anything said during the course of parliamentary business. The Court clarified that the immunity is limited to statements made within the context of parliamentary proceedings, ensuring free expression for MPs without fear of legal repercussions.
Applicability of Analogies:
The appellant attempted to draw analogies from Irish and Massachusetts cases to interpret the constitutional provisions. However, the Supreme Court dismissed the need for such analogies, emphasizing the clear and unambiguous language of the Indian Constitution. The Court held that the provisions of the Constitution should be interpreted based on their own merits and not by drawing comparisons with other legislative bodies.
Procedure for Lodging an Appeal:
The Supreme Court also addressed the procedure for lodging an appeal and the significance of the notice of lodgment in the Supreme Court. The Court clarified that the notice of lodgment serves as an intimation to the respondents about the appeal, allowing them to take appropriate action. Unlike a summons, the notice does not compel appearance before the Court, and the Court may proceed with the appeal ex parte if the respondent does not appear. The Court highlighted the distinction between a notice of lodgment and a summons in legal proceedings.
In conclusion, the Supreme Court dismissed the appeal, upholding the High Court's decision regarding the jurisdiction and immunity of Members of Parliament for statements made in Parliament. The Court provided a detailed analysis of the constitutional provisions, emphasizing the importance of parliamentary immunity and the procedure for lodging appeals in the Supreme Court.
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1970 (5) TMI 67
Issues: Validity of sub-rule (11) of rule 12 of the Central Sales Tax (Orissa) Rules in light of the Central Sales Tax Act, 1956.
In this judgment by the Orissa High Court, the validity of sub-rule (11) of rule 12 of the Central Sales Tax (Orissa) Rules was challenged as being ultra vires the provisions of the Central Sales Tax Act, 1956. The sub-rule required that for claiming a concessional rate of tax under the Act, a declaration form issued only by the notified authority of the State where the goods are taken delivery of in the course of inter-State trade or commerce shall be accepted. The court examined the relevant provisions of the Act, including Section 3 which defines inter-State trade or commerce, and Section 8 which outlines the conditions for tax liability and the requirement of a declaration form (form C) from the purchasing dealer to avail concessional rates. The court held that the impugned sub-rule imposed an additional obligation beyond what was prescribed in Section 8(4) of the Act, rendering it inconsistent with the Act. An example was provided to illustrate how the sub-rule could conflict with the Act in a practical scenario. Consequently, the court declared sub-rule (11) of rule 12 as ultra vires.
Furthermore, the judgment highlighted that under Section 13(3) of the Act, the State Government has the authority to make rules to carry out the purpose of the Act as long as they are not inconsistent with the Act itself. Since the impugned sub-rule was found to be inconsistent with Section 8(4) of the Act, it was deemed ultra vires and thus, the court directed the State Government not to enforce the rule. The application was allowed, and a writ of mandamus was issued accordingly. The judgment concluded with no order as to costs, and the concurring opinion of Justice Acharya was noted.
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1970 (5) TMI 66
Issues Involved:
1. Whether the proceedings for assessment should be considered as proceedings for 'escaped assessment' under section 21 of the U.P. Sales Tax Act or as the first assessment under rule 41(5) of the U.P. Sales Tax Rules.
Detailed Analysis:
Issue 1: Nature of Assessment Proceedings
The central issue is whether the proceedings for assessment should be considered as proceedings for 'escaped assessment' under section 21 of the U.P. Sales Tax Act or as the first assessment under rule 41(5) of the U.P. Sales Tax Rules.
Facts and Background:
- The assessee, a partnership firm, operated from 13th February 1957 to 8th July 1957 and dissolved on 5th October 1957 without notifying the sales tax authorities.
- The firm did not file any return for the assessment year 1957-58.
- The Sales Tax Officer issued three notices under rule 41(5) of the U.P. Sales Tax Rules in 1959 and 1960.
- An ex parte assessment order was made on 1st December 1960 under rule 41(5).
Legal Proceedings:
- The assessment order was set aside on appeal, and the case was remanded for fresh assessment.
- The assessee's revision application contended that the entire assessment proceeding should have been annulled.
- The Additional Judge (Revisions) quashed the entire proceeding, holding that it was a case of 'escaped assessment' under section 21, relying on the Supreme Court decision in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax.
Legal Provisions:
- Section 7(1) and 7(3) of the U.P. Sales Tax Act: Mandates dealers to submit returns and allows the Sales Tax Officer to make a best judgment assessment if no return is submitted.
- Section 21 of the U.P. Sales Tax Act: Allows assessment of tax on turnover that has 'escaped assessment.'
Supreme Court Precedents:
- Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax: Turnover escapes assessment if no proceedings are initiated and no return is filed.
- Anandji Haridas and Co. (P.) Ltd. v. S.P. Kushare: Turnover can be assessed under either section 11(4)(a) or section 11-A of the C.P. and Berar Sales Tax Act, 1947.
- Additional Assistant Commissioner of Sales Tax v. Firm Jagmohandas Vijay Kumar: Proceedings under section 8(1)(b) of the Madhya Bharat Sales Tax Act, 1950, once initiated, turnover does not escape assessment unless proceedings are closed.
Court's Analysis:
- The court considered section 7(3) and section 21 of the U.P. Sales Tax Act in pari materia with section 11(4)(a) and section 11-A of the C.P. and Berar Sales Tax Act, 1947.
- It held that the Sales Tax Officer acted within his jurisdiction under section 7(3) when making the assessment.
- The assessment made under section 7(3) cannot be considered as made under section 21.
- The court found that the assessment order under consideration must be seen as an order under section 7(3) of the Act read with rule 41(5) of the Rules.
Conclusion:
- The court concluded that the assessment proceedings were rightly made under section 7(3) and not under section 21.
- The question referred was answered accordingly, and the Commissioner of Sales Tax was entitled to costs assessed at Rs. 150 with counsel's fee assessed in the same figure.
Reference Answered Accordingly:
- The assessment order is an order under section 7(3) of the U.P. Sales Tax Act read with rule 41(5) of the U.P. Sales Tax Rules, not under section 21 of the Act.
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1970 (5) TMI 65
Issues Involved:
1. Competency of exemption application with deficit fee.
2. Jurisdiction of assessing authority to demand deficiency.
3. Authority to finalize exemption case and demand deficiency after assessment year.
4. Conditions for default assessment under rule 23.
Comprehensive, Issue-Wise Detailed Analysis:
1. Competency of Exemption Application with Deficit Fee:
The court examined whether an exemption application in form V, accompanied by a deficit fee, must be rejected as incompetent. The essential question was whether the applications were rightly rejected due to the failure to deposit the required fee under rule 20-13(a). The court held that the requirement to deposit one-fourth of the exemption fee within thirty days of the commencement of the year is a mandatory condition for exemption. The dealers failed to comply with this essential requirement, and hence their applications were rightly rejected. The court emphasized that the conditions for exemption must be strictly fulfilled, citing precedents from the Supreme Court regarding the strict adherence to conditions for tax benefits.
2. Jurisdiction of Assessing Authority to Demand Deficiency:
The court addressed whether the assessing authority has the jurisdiction to demand the deficiency in the initial deposit of the fee and if such a demand must be made during the assessment year. The court concluded that there is no provision in the U.P. Sales Tax Act or the Rules authorizing the assessing authority to demand the deficiency in the deposit of the first instalment. Therefore, the first part of the question was answered in the negative, and no answer was returned to the second part.
3. Authority to Finalize Exemption Case and Demand Deficiency After Assessment Year:
The court considered whether the assessing authority could finalize the exemption case under sub-clauses (h) and (i) of rule 20-B after the expiry of the assessment year and then demand the total deficiency. The court found it difficult to hold that the benefit of exemption could be granted by following the procedure in clauses (h) and (i) if only the first instalment, and that too not in full, was deposited. The third question was answered in the negative.
4. Conditions for Default Assessment Under Rule 23:
The court examined whether a default assessment under rule 23 could be made only upon the failure of the assessee to deposit the deficiency on demand. The court opined that the dealers were not entitled to the benefit of exemption from sales tax as they did not comply with the requirements of rule 20-B, including the deposit of the first instalment of the exemption fee. Therefore, they were liable to tax under rule 23 without the need for a prior demand to make good the deficiency. The fourth question was answered in the negative.
Conclusion:
The court answered the four questions as follows:
- Question No. (1): In the affirmative.
- Question No. (2): The first part in the negative; no answer to the second part.
- Question No. (3): In the negative.
- Question No. (4): In the negative.
Costs were awarded to the Commissioner of Sales Tax against two dealers, M/s. Girdhari Mal Jai Dayal and M/s. Ram Nath Ram Dularey, while no order as to costs was made against the remaining dealers. The reference was answered accordingly.
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1970 (5) TMI 64
Issues:
Recovery of arrears of sales tax from a partner of a dissolved firm without serving a separate notice of demand.
Analysis:
The case involved a question of law regarding the recovery of arrears of sales tax from a partner of a dissolved firm without serving a separate notice of demand. The firm in question, M/s. Mangal Sen Sita Ram, was dissolved, and the partner, Sri Sampat Ram, was being pursued for the arrears of sales tax for the years 1961-62 to 1964-65. The Judge (Revisions) initially allowed the revision application, directing the Sales Tax Officer to follow the procedure as laid down in the U.P. Sales Tax Act before attempting to recover the arrears from the assessee.
In a similar case, Bishwanath Lohia v. The Collector, Aligarh, it was held that the Sales Tax Officer could recover arrears of sales tax from a partner of a firm without serving a separate notice of demand. The counsel for the assessee tried to distinguish this case by highlighting the dissolution of the firm in the present case.
Section 3-C of the U.P. Sales Tax Act deals with the liability of a dissolved firm and its partners for tax arrears. The legal fiction created under this section treats every partner as jointly and severally liable for the tax due against the dissolved firm. The Judge (Revisions) misinterpreted this provision, suggesting that a fresh notice of demand should be served on a partner before initiating recovery proceedings, which would defeat the purpose of the legal fiction.
The Supreme Court's interpretation of a similar provision in the Indian Income-tax Act emphasized the continuity in the application of assessment proceedings even after the discontinuance of a firm. The counsel for the assessee referenced a case under the Income-tax Act, but the court clarified that the provisions of the U.P. Sales Tax Act were distinct.
In conclusion, the court answered the question in the negative, favoring the Commissioner of Sales Tax. The court held that the legal fiction under section 3-C deemed the partner to be the dealer in default, allowing for the recovery of arrears from him without a separate notice of demand. The court distinguished this case from a scenario involving a legal representative of a deceased assessee, where a separate notice of demand was deemed necessary before initiating recovery proceedings.
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1970 (5) TMI 63
Issues:
Jurisdiction of Assistant Sales Tax Officer to assess purchase tax under the M.P. General Sales Tax Act.
1. The judgment pertains to a petition filed by railway contractors challenging an assessment of purchase tax by the Assistant Sales Tax Officer in Madhya Pradesh. The petition argued that the Officer had no jurisdiction to assess purchase tax as the power to assess tax under the Act is granted to the Commissioner, who can delegate it to subordinates as per Rule 68 of the M.P. General Sales Tax Rules. The contention was based on the interpretation of the delegation of powers mentioned in the rule, specifically entry No. 7(c), which limits the Assistant Sales Tax Officer's authority to assess dealers with a turnover not exceeding Rs. 4 lakhs.
2. The court analyzed the definition of "turnover" under section 2(t) of the Act, which refers to the aggregate amount of sale prices received by a dealer. It was argued that a person involved in construction activities without engaging in the sale of goods does not have turnover in the context of the Act. The State's argument that even dealers with no turnover can fall under the Assistant Sales Tax Officer's jurisdiction if their turnover is less than Rs. 4 lakhs was rejected. The court emphasized that the Officer can only assess dealers with an actual turnover below the specified limit.
3. Another perspective considered by the court was the hierarchical distribution of assessment powers among officers. It was highlighted that limiting the Assistant Sales Tax Officer's jurisdiction based solely on turnover ensures a clear delineation of authority and prevents ambiguity in assessment limits. Allowing the Officer to assess entities with no turnover would lead to a lack of pecuniary limits in purchase tax assessments, undermining the hierarchical structure defined by the rule.
4. The court referred to a previous decision by a Division Bench of the same court, which supported the view that the Assistant Sales Tax Officer lacked jurisdiction to assess purchase tax in cases where the dealer had no turnover. The judgment in Hindustan Construction Co. Ltd. v. J.P. Namdeo established a precedent aligning with the current decision, emphasizing the importance of adherence to jurisdictional boundaries in tax assessments.
5. Ultimately, the court allowed the writ petition, setting aside the assessment and the associated demand made by the Assistant Sales Tax Officer. The petitioner was awarded costs, and the security deposit amount was ordered to be refunded. The judgment reinforced the importance of adherence to statutory provisions and the delegation of powers in tax assessments under the M.P. General Sales Tax Act.
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1970 (5) TMI 62
Issues:
Interpretation of Section 10 of the Central Sales Tax (Amendment) Ordinance, 1969 regarding exemption from tax liability for inter-State transactions where tax was collected but later refunded.
Analysis:
The judgment delivered by the Karnataka High Court, with Justice Govinda Bhat and Justice Venkataswami presiding, pertains to writ petitions challenging orders of the Commercial Tax Officer dated 30th August, 1969. The petitioner, a cotton dealer, had collected sales tax on inter-State transactions between 10th November, 1964, and 31st March, 1968, despite the Supreme Court ruling that no tax was legally leviable on such transactions. Subsequently, the petitioner refunded the tax amounts to customers. The Commercial Tax Officer held that the petitioner was not entitled to exemption under Section 10 of the Central Sales Tax (Amendment) Ordinance, 1969, as the tax was initially collected, even though it was later refunded. The petitioner contended that the effect of the refund should be considered as if no initial tax collection had occurred.
The Court analyzed Section 10 of the Ordinance, emphasizing that the objective was to exempt dealers from tax liability for inter-State sales where tax was not collected. The Court found the Commercial Tax Officer's interpretation too literal, stating that the dealer should not be liable for tax if no tax was collected during the relevant period. The Court noted that after the Supreme Court's judgment in 1964, the petitioner could not have legally collected tax on the transactions in question. Refunding the tax amounts before the Ordinance was in line with the intention of Section 10. The Court concluded that the petitioner met the requirements of Section 10 and was not liable for sales tax on the inter-State sales of cotton during the specified period. Consequently, the demands challenged in the writ petitions were quashed, and the objections against tax levy for a specific period were rejected.
In summary, the Court's judgment clarified the interpretation of Section 10 of the Central Sales Tax (Amendment) Ordinance, 1969, emphasizing the exemption from tax liability for inter-State transactions where tax was collected but later refunded. The Court ruled in favor of the petitioner, holding that the refund of tax amounts before the Ordinance was equivalent to not making the initial tax collection, thus entitling the petitioner to exemption from sales tax.
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1970 (5) TMI 61
Issues:
1. Barred by limitation - filing of applications under section 15(1) before the Board of Revenue
2. Applicability of Rajasthan Sales Tax Act in assessments under the Central Sales Tax Act, 1956
Analysis:
1. The judgment pertains to connected references by M/s. Man Industrial Corporation Ltd. regarding assessments for the years 1958-59 and 1959-60 on inter-State sales governed by the Central Sales Tax Act, 1956. The Deputy Commissioner discovered an error in tax rate application and directed reassessment under section 12 of the Rajasthan Sales Tax Act, 1954. The dealer filed revision applications to the Board of Revenue under section 14, which were allowed. The State filed reference applications under section 15(1) before the Board, later moved to the High Court due to the Board's delay. The first preliminary objection raised was regarding the limitation period for filing under section 15(1), which was within limitation post-amendment, thus dismissed.
2. The second preliminary objection concerned the applicability of the Rajasthan Sales Tax Act in assessments under the Central Sales Tax Act, 1956. The argument was based on retrospective amendment by the Central Sales Tax (Amendment) Act, 1969. The Rajasthan Act as of 1st July, 1957, was considered applicable for assessments under the Central Sales Tax Act. The contention that the Rajasthan Act as amended in 1969 should apply was rejected, as the Amendment Act did not specify such applicability. Consequently, the second preliminary objection was upheld, and the reference applications were dismissed with costs.
In conclusion, the High Court dismissed the reference applications, upholding the second preliminary objection regarding the applicability of the Rajasthan Sales Tax Act in assessments under the Central Sales Tax Act, 1956. The judgment clarified the retrospective amendment's impact and emphasized the specific provisions governing such assessments.
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1970 (5) TMI 60
The High Court of Mysore quashed notices issued by the Commercial Tax Officer proposing to rectify assessment orders under the Central Sales Tax Act, 1956. The Court held that the assessing authority cannot rectify orders where exemptions were granted by appellate authorities. Appellate authorities are the proper entities to make rectifications. Petitions allowed, no costs.
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1970 (5) TMI 59
High Court has passed an order in substance remanding the case referred for opinion under section 11(1) of the U.P. Sales Tax Act, 1948, to the Additional judge (Revisions)?
Held that:- Appeal allowed. In a case referred to the High Court, the High Court has no power to remand the case to the Tribunal. The High Court has to answer the question referred. If the High Court was not satisfied with the statement of the case, the High Court could call for a supplementary statement of the case. On the question referred the correctness of the "approach" of the Judge (Revisions) was apparently not in issue; the court had merely to find whether on the facts and circumstances the assessee was entitled to claim exemption from tax liability.
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1970 (5) TMI 50
Issues:
Petition filed by ex-directors under section 633(2) of the Companies Act, 1956 to avoid prosecution under section 614A(2) for non-compliance with court directions.
Analysis:
The petitioners, ex-directors of a company, were convicted by a Magistrate for not filing balance-sheets as required by the Companies Act for the years 1965-1967. The Magistrate ordered them to file the documents within two months under section 614A(2) of the Act. The petitioners failed to comply, citing lack of access to company records seized by the police and cessation of directorship. The petition sought relief under section 633(2) of the Act, claiming honest and reasonable actions. The Registrar of Companies denied the petitioners' claims of acting reasonably and honestly.
The issue raised was whether the High Court had jurisdiction to grant relief under section 633(2) of the Act. Section 633(2) allows relief in cases of negligence, default, breach of duty, misfeasance, or breach of trust by an officer of a company. The court clarified that relief could be granted by the High Court only if criminal proceedings had not been initiated in a lower court. The High Court lacks jurisdiction to grant relief under section 633(2) if criminal proceedings have already commenced, as established in previous cases such as In re Orissa Jute and Cotton Mills Ltd. and In re Gilt Edge Safety Glass Ltd.
The court highlighted that relief under section 633(2) is not applicable to defaults in complying with court directions, like in the present case where the petitioners failed to adhere to the Magistrate's order under section 614A(1). The court emphasized that the High Court cannot grant relief for non-compliance with court directions as it falls outside the scope of section 633(2). Additionally, the court reasoned that even after the termination of criminal proceedings, the High Court does not have jurisdiction to grant relief for defaults that were the subject of the criminal case.
Ultimately, the court held the petition to be incompetent, ruling that the High Court lacked jurisdiction to grant the relief sought under section 633(2) of the Act. The court dismissed the petition, leaving the parties to bear their respective costs. The court did not delve into the question of whether the petitioners acted reasonably or honestly in failing to comply with the Magistrate's direction within the specified timeframe.
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1970 (5) TMI 49
Issues Involved:
1. Priority between creditors of a company in liquidation.
2. Validity of a charge not registered within the statutory period.
3. Conclusiveness of the Registrar's certificate under the Companies Act, 1948.
4. Application of the legal maxim that no man can take advantage of his own wrong.
Detailed Analysis:
1. Priority Between Creditors of a Company in Liquidation
The primary issue was the priority between creditors of a company, C.L. Nye Ltd., which went into liquidation on July 15, 1964. The liquidators of the company contested a charge held by Westminster Bank Ltd. (the bank), arguing that it was void against the liquidators and the general body of creditors because it was not registered within the 21-day period mandated by section 95 of the Companies Act, 1948.
2. Validity of a Charge Not Registered Within the Statutory Period
The charge in question was created on March 9, 1964, but was not registered until July 3, 1964. The liquidators argued that the charge was void as it was not registered within 21 days of its creation. The bank contended that the charge was created on June 29, 1964, when the company acquired the legal estate, and thus was registered within the statutory period.
3. Conclusiveness of the Registrar's Certificate
The court examined the Companies Act, 1948, particularly sections 95, 96, and 98, which deal with the registration of charges. The Registrar's certificate, issued under section 98(2), was argued to be conclusive evidence that all requirements of the Act had been complied with. The liquidators argued that the date of the creation of the charge was either February 28 or March 9, 1964, making the registration out of time. The bank argued that the certificate was conclusive and should not be questioned.
The court reviewed several precedents, including Yolland's case, National Provincial & Union Bank of England v. Charnley, In re Mechanisations (Eaglescliffe) Ltd., and In re Eric Holmes (Property) Ltd., which established that the Registrar's certificate is conclusive evidence of compliance with the registration requirements, even if there were errors in the particulars provided.
4. Application of the Legal Maxim that No Man Can Take Advantage of His Own Wrong
The judge initially ruled in favor of the liquidators, applying the maxim that no man can take advantage of his own wrong. The judge concluded that the bank, through its solicitor, misled the Registrar by dating the charge June 18, 1964, thereby making it appear that the particulars were delivered within the required 21 days.
However, the appellate court disagreed, stating that the certificate of the Registrar is conclusive and cannot be challenged on the basis of the bank's error. The court emphasized that the purpose of the certificate is to provide certainty and security to creditors relying on the registration of charges.
Conclusion:
The appeal was allowed, with the court holding that the Registrar's certificate is conclusive evidence that the requirements of the Companies Act, 1948, as to registration, have been complied with. The bank's charge was deemed valid against the liquidators and creditors, despite the registration being out of time. The court also rejected the application of the maxim that no man can take advantage of his own wrong in this context, as it would undermine the conclusiveness of the Registrar's certificate and the security it provides to creditors.
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1970 (5) TMI 36
Issues Involved:
1. Maintainability of petitions under Section 155 of the Companies Act after availing remedy under Section 111.
2. Adequacy of stamping on shares and transfer deeds.
3. Entitlement to dividends from shares purchased.
4. Jurisdiction of the court under Section 155 to grant dividends.
Detailed Analysis:
1. Maintainability of Petitions under Section 155 of the Companies Act:
The appellant contended that once the respondent had availed the remedy under Section 111 of the Companies Act by appealing to the Central Government, the petitions under Section 155 were not maintainable. The court rejected this contention, stating that the remedies under Sections 111 and 155 are not mutually exclusive. The court emphasized that the present petitions under Section 155 were not an appeal or revision against the Central Government's order but were independent requests to rectify the register of members. The court referenced the cases of *Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala* and *Arjan Singh Bir Singh v. Panipat Woollen & General Mills Co. Ltd.*, concluding that these precedents did not support the appellant's argument. Thus, the court upheld the maintainability of the petitions under Section 155.
2. Adequacy of Stamping on Shares and Transfer Deeds:
The appellant argued that the shares and transfer deeds were not properly stamped initially and could not be stamped later to rectify the deficiency. The court dismissed this contention as it was not raised before the learned single judge and required factual investigation. The court noted that determining the adequacy of stamping involved mixed questions of fact and law, which could not be addressed for the first time in a Letters Patent Appeal. Therefore, this objection was found to be without merit and rejected.
3. Entitlement to Dividends from Shares Purchased:
The appellant challenged the award of dividends from 1950 to the respondent in C.O. No. 64 of 1960, arguing that the respondent was only entitled to dividends from the date of purchase, March 21, 1955. The court agreed with this contention, modifying the judgment to entitle the respondent to dividends from March 21, 1955, up to and including 1960-61, but not prior to that date. This modification was based on the principle that the transferee is entitled to dividends only from the date of purchase of the shares.
4. Jurisdiction of the Court under Section 155 to Grant Dividends:
The appellant argued that the court lacked jurisdiction under Section 155 to order the payment of dividends. The court rejected this argument, stating that when it is determined that the respondent is entitled to have the shares transferred and registered in his name from the date of purchase, it is incidental and consequential to decide on the payment of dividends from that date. The court found that the petitions explicitly claimed dividends in paragraph 21, and Section 155 even allows for the payment of damages. Hence, the court concluded that it had the jurisdiction to grant dividends.
Conclusion:
The appeals were dismissed except for the modification regarding the entitlement to dividends in C.O. No. 64 of 1960, where the respondent was entitled to dividends from March 21, 1955, instead of 1950. No other contentions were raised by the appellant, and no order as to costs was made.
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1970 (5) TMI 28
Whether proceedings can be said to commence for recovery when the assessing authority makes a motion within section 32(1) to the Collector for recovery of the agricultural income-tax and penalty as an arrear of land revenue?
Held that:- there is hardly much difference between the provisions of section 32 of the Act and the corresponding provisions of section 46 of the Indian Income-tax Act, 1922. Both these statutes relate to taxation of income and the provisions in question are in pari materia although the words employed may not be exactly the same. The proceedings for recovery, therefore, in the present case, were rightly held to have commenced with the making of the orders contained in annexures "A-1" to "A-5".
So far as the year 1363F. was concerned the date of the last instalment was September 19, 1958. According to annexure "A-5" the Sub-Divisional Officer, Lakhimpur, made an order on October 1, 1959, with regard to the demand for that year. The High Court found that the Deputy Commissioner had made an endorsement on October 5, 1959. As the order was made on October 1, 1959, it was beyond one year from September 19, 1958. In the appeal filed by the departmental authorities it has not been shown in what manner the High Court was in error in holding that the proceedings for recovery of tax and penalty for the year 1363F. were barred by time. Appeal dismissed.
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1970 (5) TMI 27
Whether, on the facts and in the circumstances of the case, the provisions of the Gift-tax Act are attracted in respect of the sum of ₹ 70,000 thrown into the hotchpotch of the assessee's joint family by the assessee ?
Held that:- Since the donor happened to be a member of the Hindu undivided family to which the gift in question had been made, the gift to the extent of the donor's share in the said amount was exempt, he brought to tax the balance of amount under the provisions of the Gift-tax Act
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1970 (5) TMI 26
Whether the declaration by which the assessee has impressed the character of joint Hindu family property on the self-acquired properties owned by him amounts to a transfer so as to attract the provisions of the Gift-tax Act ?
Held that:- The declaration by which the assessee has impressed the character of joint Hindu family property on the self-acquired properties owned by him did not amount to a transfer so as to attract the provisions of the Act. Allow this appeal, set aside the judgment of the High Court
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1970 (5) TMI 25
Either under section 35 of the Income-tax Act, 1922, or under section 154 of the 1961 Act, the jurisdiction of the Income-tax Officer to rectify any mistake in any assessment order or refund order must be confined to a mistake which is apparent from the record – Whether rectification can be made on the ground that consideration paid was lower than the written down value and excess depreciation can be disallowed? When assets are transferred in consideration of fully paid up shares, it is difficult to say whether the actual consideration is only the face value of the shares – therefore, Income-tax Officer had no jurisdiction to issue the impugned notice under section 154 purporting to correct an alleged error apparent on the records
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