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1971 (5) TMI 79
1. ISSUES PRESENTED and CONSIDERED The core legal question presented in this judgment is whether overlooking a binding decision constitutes a ground for reviewing a judgment or order of a court. This issue arises in the context of a review petition filed by the Selection Committee for admission to Government Medical Colleges, challenging the court's earlier decision in a writ petition regarding the classification of a community as a Scheduled Tribe. 2. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The legal framework involves the interpretation of Article 342 of the Constitution of India and the Scheduled Castes and Scheduled Tribes Orders (Amendment) Act 1956. The precedents considered include the Supreme Court decision in Bhaiyalal v. Harikishan Singh, which was not initially considered in the writ petition, and various High Court decisions on whether overlooking a binding decision constitutes an error apparent on the face of the record. Court's interpretation and reasoning: The court examined the divergent views of various High Courts on whether overlooking a binding decision is a ground for review. The court emphasized the principle that a decision erroneous in law is not, by itself, a ground for review unless it can be characterized as an error apparent on the face of the record. The court relied on the test laid down by the Supreme Court in Tungabhadra Industries Ltd. v. Govt. of Andhra Pradesh, which suggests that an error apparent on the face of the record is one that can be identified without elaborate argument and about which there can be no reasonable disagreement. Key evidence and findings: The court found that the decision of the Supreme Court in Bhaiyalal v. Harikishan Singh directly impacted the issue at hand in the writ petition but was not brought to the court's attention during the original hearing. The court acknowledged that this oversight constituted an error apparent on the face of the record, warranting a review. Application of law to facts: The court applied the principle that a binding decision of the Supreme Court must be followed by all courts within India, as per Article 141 of the Constitution. The oversight of such a decision in the original judgment was deemed an error apparent on the face of the record, justifying the review of the court's earlier order. Treatment of competing arguments: The court considered the argument by the Selection Committee that overlooking a binding decision is an error apparent on the face of the record, supporting a review. Conversely, the respondent's counsel argued that such an oversight does not constitute a sufficient ground for review. The court ultimately sided with the Selection Committee's argument, emphasizing the importance of adhering to binding Supreme Court decisions. Conclusions: The court concluded that the oversight of the Supreme Court decision in the original writ petition constituted an error apparent on the face of the record. As a result, the court allowed the review petition, set aside its previous order, and directed that the writ petition be reheard. 3. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: "To hold otherwise would be to multiply litigation, for naturally the aggrieved party would appeal and the error would have to be corrected by the appellate court rather than in the court of first instance." "A mistake simpliciter, either in the realm of fact or of law, is no ground for review. But overlooking a proposition of law well settled and beyond controversy does furnish a very good ground for review." "Where there is an error apparent on the face of the record, the question as to how that error occurred, is of no relevance for the purpose of review." Core principles established: The court established the principle that overlooking a binding decision of the Supreme Court constitutes an error apparent on the face of the record, warranting a review of the judgment or order. This principle ensures adherence to the constitutional mandate that Supreme Court decisions are binding on all courts within India. Final determinations on each issue: The court determined that the review petition was justified due to the oversight of a binding Supreme Court decision. Consequently, the court set aside its previous order in the writ petition and directed that the matter be reheard, with each party bearing its own costs for the review petition.
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1971 (5) TMI 78
Issues Involved:
1. Validity of the Selection Rules for admission to Government Medical Colleges in Mysore.
2. University-wise distribution of seats and its compliance with Article 14 of the Constitution.
3. Reservation of seats under Rules 4 and 5 and its compliance with Article 15(4).
4. Specific challenges to Rule 3 regarding domicile and residence requirements.
5. Validity of Rule 4(h) concerning reservation for children of political sufferers.
Issue-wise Detailed Analysis:
1. Validity of the Selection Rules:
The petitions challenge the validity of the Mysore Medical Colleges (Selection for Admission) Rules, 1970. The court examined whether the rules framed by the Government were consistent with the ordinances and regulations of the universities. It was determined that the Government, which maintains these colleges, has the power to regulate admissions, provided the rules do not conflict with university standards or constitutional provisions. The court found no inconsistency between the rules and university ordinances, thus upholding the validity of the selection rules.
2. University-wise Distribution of Seats:
The petitioners argued that the university-wise distribution of seats under Rule 9(1) was discriminatory and violated Article 14. The court distinguished this case from previous judgments where district-wise or unit-wise distribution was struck down. It held that university-wise distribution was a valid classification, as it aimed to cater to the educational needs of different areas and did not restrict admission based on birth or residence. The court found that this classification had a reasonable nexus with the objective of the rules, ensuring that candidates attached to a university could pursue further studies in affiliated colleges.
3. Reservation of Seats under Rules 4 and 5:
The petitioners contended that the reservation of seats under Rules 4 and 5 was excessive and violated Article 15(4). The court clarified that Rule 4 set apart seats for specific categories based on overriding considerations, such as obligations towards defense personnel and international agreements, which did not constitute reservations under Article 15. Rule 5's reservation for Scheduled Castes, Scheduled Tribes, and socially and educationally backward classes was deemed not excessive. The court emphasized that while the reservation should not ignore the rights of other sections, it must also consider the advancement of weaker sections, which was the intent of Article 15(4).
4. Specific Challenges to Rule 3:
In Writ Petition No. 621 of 1970, the petitioner challenged Rule 3, which required candidates to be residents of Mysore for at least 10 years. The court found that the petitioner did not meet this requirement, as her residence in Mysore was intermittent. The court did not find it necessary to address the validity of Rule 3, as the petitioner was not entitled to selection based on her marks compared to other candidates.
5. Validity of Rule 4(h):
In Writ Petition No. 622 of 1970, the petitioner challenged Rule 4(h), which reserved seats for children of political sufferers. The petitioner argued that the classification was vague and lacked a rational nexus with the objective of selecting the most meritorious candidates. The court found the definition of "political sufferer" clear and detailed, allowing for distinct identification. It held that the classification had a reasonable nexus with the objective of providing fair and equitable distribution of seats, as it aimed to assist those handicapped by their parents' participation in the national movement. However, Justice I.D. Dua expressed reservations about the validity of Rule 4(h), questioning its nexus with the objective of selecting candidates for medical education. Despite these reservations, the court dismissed the petition, as the petitioner's marks were lower than those of the last admitted candidate from the category of children of political sufferers.
Conclusion:
The Supreme Court dismissed all five writ petitions, upholding the validity of the selection rules for admission to Government Medical Colleges in Mysore. The court found no constitutional or legal infirmities in the rules, including the university-wise distribution of seats and the reservation provisions. The court emphasized the Government's authority to regulate admissions in its institutions, provided the rules align with constitutional principles and university standards.
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1971 (5) TMI 77
Issues Involved:
1. Jurisdiction of the court to entertain an application under Order 9 Rule 13 of the Code of Civil Procedure after the enactment of the Delhi High Court Act, 1966.
2. Jurisdiction of the court to entertain execution applications for decrees passed before the enactment of the Delhi High Court Act, 1966.
Detailed Analysis:
1. Jurisdiction of the Court to Entertain an Application under Order 9 Rule 13 of the Code of Civil Procedure:
The primary issue was whether an application to set aside an ex parte decree under Order 9 Rule 13 of the Code of Civil Procedure should be filed in the court that originally passed the decree or in the High Court after the enactment of the Delhi High Court Act, 1966. The judgment analyzed the relevant sections of the Delhi High Court Act (Sections 5, 16, and 19) and the Code of Civil Procedure (Sections 37, 38, 141, 150, and Order 9 Rule 13).
The court concluded that the application under Order 9 Rule 13 should be filed in the High Court. The rationale was based on Section 150 of the Code of Civil Procedure, which states that when the business of any court is transferred to another court, the latter court shall have the same powers and duties as the former. Since the Delhi High Court Act transferred the jurisdiction of suits valued over Rs. 25,000 to the High Court, it was held that the High Court was the appropriate forum for such applications.
2. Jurisdiction of the Court to Entertain Execution Applications:
The second issue was whether execution applications for decrees passed by subordinate courts before the enactment of the Delhi High Court Act, 1966, should be filed in the High Court or the court that originally passed the decree. The court examined Sections 37 and 38 of the Code of Civil Procedure, which define the "court which passed the decree" and allow decrees to be executed by either the court that passed it or the court to which it is sent for execution.
The court referred to the Supreme Court's decision in Merala Ramanna v. Nallaparaja, which held that the court that passed the decree retains jurisdiction to execute it even if the subject matter falls within the jurisdiction of another court due to territorial or pecuniary changes. The court also cited a Full Bench decision of the Punjab High Court in Mehar Singh v. Kasturi Ram, which supported the view that the court which passed the decree and the court to which the jurisdiction is transferred both have concurrent jurisdiction to execute the decree.
The judgment concluded that both the subordinate court that passed the decree and the High Court have jurisdiction to entertain execution applications. However, the High Court may transfer the application to the appropriate court for execution if necessary.
Conclusion:
(A) All applications under the Code of Civil Procedure, other than execution applications, in suits decreed by subordinate courts before October 31, 1966, with a valuation exceeding Rs. 25,000, should be filed in the High Court.
(B) Execution applications in suits decreed by subordinate courts before October 31, 1966, with a valuation exceeding Rs. 25,000, can be entertained by either the court that passed the decree or the High Court. The court may then transfer the application to the appropriate court for execution if required.
The judgment emphasized that the objective is to facilitate the execution of decrees and not to create unnecessary obstructions. The applications were directed to come up for further proceedings before the Single Judge on July 16, 1971.
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1971 (5) TMI 76
Issues Involved:
1. Alleged corrupt practice of publication of false statements relating to the personal character and conduct of the appellant.
2. Incurring of election expenses in excess of the prescribed limit.
3. Alleged disqualifications of the respondent due to a subsisting contract with the State under Section 9A of the Representation of the People Act.
Issue-wise Detailed Analysis:
1. Alleged Corrupt Practice of Publication of False Statements:
The appellant argued that false statements were made about his personal character and conduct, which were reasonably calculated to prejudice his election prospects. These statements were made at a public meeting on June 13, 1968, and published in the weekly 'Ranchandi' on June 16, 1968. The High Court found that some of these statements were made but concluded that the appellant failed to prove they were false or believed to be false by the speakers and the respondent. The High Court's decision was based on the existence of a criminal complaint against the appellant, which provided a basis for the statements, thus falling within the ambit of bona fide statements. The Supreme Court agreed with the High Court, emphasizing that the appellant did not discharge the onus of proving the statements were false and believed to be false.
2. Incurring of Election Expenses in Excess of the Prescribed Limit:
The appellant contended that the respondent exceeded the prescribed election expenses limit by purchasing petrol worth about Rs. 2,000. The High Court rejected this claim, noting that the respondent owned multiple vehicles and agricultural land, necessitating significant petrol consumption for non-election purposes. The Supreme Court upheld the High Court's reasoning, finding no evidence to link the entire petrol expenditure to election purposes.
3. Alleged Disqualifications Due to a Subsisting Contract with the State:
The appellant claimed that the respondent was disqualified under Section 9A of the Representation of the People Act because he was the Chairman of the Board of Directors of a company supplying electricity to the State Government. The High Court dismissed this contention, stating that the respondent, as Chairman, did not directly enter into a contract with the Government in the course of his trade or business. The Supreme Court concurred, affirming that the business of the company could not be considered the personal trade or business of the Chairman.
Conclusion:
The Supreme Court dismissed the appeal, agreeing with the High Court's findings on all issues. The appellant failed to prove the falsity of the statements or that they were believed to be false by the respondent. Additionally, there was insufficient evidence to show that the respondent's election expenses exceeded the prescribed limit or that he was disqualified under Section 9A. The appeal was dismissed with costs.
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1971 (5) TMI 75
Issues Involved:
1. Applicability of Section 195(1)(c) Cr.P.C. to cases involving forged documents produced in judicial proceedings.
2. Interpretation of the phrase "committed by a party to any proceeding in any Court" under Section 195(1)(c) Cr.P.C.
3. Interaction between Section 195(1)(c) Cr.P.C. and Section 476 Cr.P.C. regarding the initiation of prosecutions.
4. Judicial opinions and precedents on the applicability and interpretation of Section 195(1)(c) Cr.P.C.
Detailed Analysis:
1. Applicability of Section 195(1)(c) Cr.P.C. to Cases Involving Forged Documents:
The central issue in this appeal is the scope and effect of Section 195(1)(c) Cr.P.C. and its applicability to cases where a forged document is produced as evidence in a judicial proceeding. The appellant had instituted a civil suit based on a cheque alleged to be forged, which was dismissed. Subsequently, a complaint was filed against the appellant for offences under Sections 467 and 471 I.P.C. The Sessions Judge referred the case to the High Court, which upheld the commitment order, leading to this appeal. The Supreme Court noted the conflict of judicial opinion on this matter and decided to examine the statutory provisions and relevant case law.
2. Interpretation of "Committed by a Party to Any Proceeding in Any Court":
The Court analyzed whether the phrase "committed by a party to any proceeding in any Court" means that the offence must be committed by a person who is already a party to the proceeding or if it includes offences committed prior to becoming a party. The Court noted that judicial opinion is divided, with one view suggesting that the offence must be committed in the character of a party to the proceeding, while the other view allows for the offence to be committed prior to becoming a party, provided the document is produced in the proceeding. The Court preferred the strict construction, confining the prohibition to offences committed by a party in their capacity as such party.
3. Interaction Between Section 195(1)(c) Cr.P.C. and Section 476 Cr.P.C.:
The Court examined Section 476 Cr.P.C., which prescribes the procedure for cases mentioned in Section 195(1)(b) and (c). Section 476 allows a court to make a complaint if it is expedient in the interests of justice, either suo motu or on application. The Court emphasized that the legislative intent behind these provisions is to prevent frivolous and vexatious prosecutions by private parties and to ensure that the court, whose proceedings are affected by the offence, considers the expediency of prosecution. The Court concluded that the prohibition in Section 195(1)(c) should be confined to offences committed by a party in the character as such party.
4. Judicial Opinions and Precedents:
The Court reviewed various judicial decisions on the interpretation of Section 195(1)(c) Cr.P.C. The Allahabad High Court's Full Bench in Emperor v. Kushal Pal Singh held that Section 195(1)(c) applies only to offences committed by a party as such to a proceeding. Other decisions, such as those from the Gujarat High Court, had differing views. The Supreme Court agreed with the reasoning of the Allahabad Full Bench, emphasizing the legislative intent to prevent vexatious prosecutions and avoid conflicts between court findings.
Conclusion:
The Supreme Court concluded that the offence under Section 471 I.P.C. is covered by the prohibition in Section 195(1)(c) Cr.P.C., but the offence under Section 467 I.P.C. can be tried without a court complaint unless it is shown that the document was forged by a party to the proceeding in their capacity as such party. The appeal was allowed in part, and the lower court was directed to dispose of the case expeditiously.
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1971 (5) TMI 74
Issues Involved:
1. Legality of the transfer of a government servant.
2. Whether the transfer constituted removal or reduction in rank under Article 311(2) of the Constitution.
3. Whether the petitioner had a lien on the post of Director of Revenue Intelligence.
4. Whether the transfer was made in bad faith.
Detailed Analysis:
1. Legality of the Transfer:
The court examined the power of the Government to transfer a government servant under Article 310 and Fundamental Rule 15. The petitioner, a member of the Indian Customs and Central Excise Service Class I, was transferred from the post of Director of Revenue Intelligence to Collector of Customs. The court noted that the administration of services can be carried out through executive instructions even in the absence of statutory rules. The court emphasized that the transfer was within the range of transferability as the post of Director of Revenue Intelligence was not an ex-cadre post. The court concluded that the transfer was legal under the general rule provided by Fundamental Rule 15, which allows the Government to transfer a government servant from one post to another.
2. Removal or Reduction in Rank under Article 311(2):
The court distinguished between removal from service and removal from a post. It was noted that the petitioner did not have a lien on the post of Director of Revenue Intelligence, and his transfer did not amount to a removal from service. The court held that the transfer did not constitute a reduction in rank as both the posts of Director of Revenue Intelligence and Collector of Customs were of the same rank, carrying the same scale of pay. The court referred to the principle that rank in government service is determined by pay scales and classifications, and any transfer within the same rank does not amount to a reduction in rank.
3. Lien on the Post of Director of Revenue Intelligence:
The court analyzed whether the petitioner had acquired a lien on the post of Director of Revenue Intelligence. It was concluded that the petitioner was only officiating in the post and did not have a substantive appointment. The court referred to the Fundamental Rule 12(b) which states that a government servant cannot hold a lien on more than one permanent post at the same time. The court found that none of the previous occupants of the post had acquired a lien on it, and the petitioner's name continued to appear in the seniority list of the Indian Customs and Central Excise Service Class I, indicating that he did not hold a lien on the post of Director of Revenue Intelligence.
4. Bad Faith in Transfer:
The court addressed the petitioner's claim that the transfer was made in bad faith. It was noted that the transfer was made to maintain the decorum in administration and was not intended as a punishment. The court found that the Government acted in good faith and without any improper motive. The approval for the transfer was obtained from both the Minister of Finance and the Prime Minister, who was in charge of the Ministry of Home Affairs at the time. The court dismissed the allegations of bad faith and improper motive.
Conclusion:
The court dismissed the writ petition, concluding that the transfer of the petitioner was legal, did not constitute removal or reduction in rank under Article 311(2), and was made in good faith. The petitioner did not have a lien on the post of Director of Revenue Intelligence, and the transfer was within the range of transferability as per the relevant rules and regulations.
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1971 (5) TMI 73
Issues Involved:
1. Whether the document is a dissolution of partnership-cum-three mortgages-cum-three releases.
2. Whether the document amounts to a dissolution of partnership-cum-three mortgages-cum-three conveyances chargeable with the aggregate duties of three conveyances under Article 23 of Schedule 1-B of the U.P. Stamp Amendment Act 1958 read with Section 6.
Issue-Wise Detailed Analysis:
1. Whether the document is a dissolution of partnership-cum-three mortgages-cum-three releases:
The document in question, dated 15th September 1960, was executed by four partners who dissolved their partnership. The third party took over all stocks, assets, and liabilities, and agreed to pay specific amounts to the other three partners in full satisfaction of their respective shares. To secure these payments, the third party hypothecated and charged certain properties.
The Board of Revenue opined that the document was not only an instrument of dissolution of partnership but also a conveyance as the three partners transferred their shares to the fourth partner against cash payment. However, the court noted that the Supreme Court had established that during the subsistence of a partnership, firm properties vest in all partners collectively, and no partner can deal with specific properties as if they were his own.
Upon dissolution, partners are entitled to have the firm's property applied to pay debts and liabilities, with the surplus distributed among the partners. The Supreme Court had held that the distribution of surplus does not amount to a transfer of assets. In the present case, cash payments to the three partners by the fourth partner were an adjustment of rights and liabilities, not a transfer of shares for a price.
The court concluded that the document is not a deed of release but a deed of dissolution cum-three mortgages.
2. Whether the document amounts to a dissolution of partnership-cum-three mortgages-cum-three conveyances chargeable with the aggregate duties of three conveyances:
The document was argued to be deficiently stamped by Rs. 1575/- according to the Revenue Authorities, who viewed it as a conveyance. The document stated that the partnership was dissolved, and the third party took over all assets and liabilities. The amounts payable to the other partners were secured by hypothecating properties.
The court examined the provisions of the Indian Partnership Act, noting that a firm continues to exist for the purpose of winding up its affairs even after dissolution. The partners' rights to the firm's property are realized only after paying off all debts and liabilities. The court referred to Supreme Court decisions which negated the contention that such an instrument is one of conveyance.
The court emphasized that an instrument of dissolution of partnership is liable to be stamped under Article 46 of Schedule I of the Stamp Act, with the maximum duty being Rs. 100/-. The document in question recorded a special mode of adjustment and settlement of accounts between the partners, which is permissible under the Partnership Act.
The court concluded that the document is not an instrument of conveyance and is not chargeable to additional duty as such. It is an instrument of dissolution of partnership-cum-three mortgages, separately chargeable with stamp duty under Articles 46 and 40 respectively.
Conclusion:
1. The document is not a deed of release. It is a deed of dissolution cum-three mortgages.
2. The document is not an instrument of conveyance and is not chargeable to additional duty as such.
The applicant is entitled to costs assessed at Rs. 100/-. A copy of the judgment shall be sent to the Board of Revenue.
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1971 (5) TMI 72
Issues Involved:
1. Validity of the Professions Tax Limitation (Amendment and Validation) Act, 1949.
2. Validity of Section 131 of the U.P. Zila Parishad Act.
3. Validity of the assessment order dated 25th March, 1968.
4. Legislative competence of the Federal Legislature.
5. Compliance with procedural rules for tax assessment.
6. Validity of the appointment of the Kar Adhikari.
Detailed Analysis:
1. Validity of the Professions Tax Limitation (Amendment and Validation) Act, 1949
The petitioners challenged the validity of the Professions Tax Limitation (Amendment and Validation) Act, 1949, arguing it was beyond the legislative competence of the Federal Legislature. The Court found no merit in this contention. The Act was deemed valid as it amended the Professions Tax Limitation Act, 1941, to include items 3-A and 3-B in the Schedule, which validated the imposition of certain taxes on circumstances and property in the United Provinces. The Court held that the Federal Legislature had the power to amend the tax rates from time to time, as indicated by the phrase "unless for the time being provision to the contrary is made by a law of the Federal Legislature."
2. Validity of Section 131 of the U.P. Zila Parishad Act
No arguments were advanced on the validity of Section 131 of the U.P. Zila Parishad Act, and the Court did not express any opinion on this matter.
3. Validity of the Assessment Order Dated 25th March, 1968
The petitioners challenged the assessment order of Rs. 2,000 imposed by the Kar Adhikari, Zila Parishad Muzaffarnagar, arguing procedural irregularities and the invalidity of the Kar Adhikari's appointment. The Court found that the assessment was invalid due to the improper appointment of the Kar Adhikari, as it was not done in consultation with the Public Service Commission as required by Section 43 of the U.P. Kshettra Samithis and Zila Parishads Adhiniyam, 1961. The Court quashed the assessment order.
4. Legislative Competence of the Federal Legislature
The petitioners argued that the Central Act LXI of 1949 was beyond the legislative competence of the Federal Legislature. The Court rejected this argument, stating that the Federal Legislature had the authority to legislate on tax matters and could amend tax rates from time to time. The Court cited the case of M.P.V. Sundararamier & Co. v. The State of Andhra Pradesh to support its view that legislative power includes the authority to enact laws retrospectively.
5. Compliance with Procedural Rules for Tax Assessment
The petitioners contended that the rules framed under the District Boards Act became inconsistent and unworkable under the U.P. Zila Parishads Act. The Court found no merit in this argument, stating that the assessment could still be carried out by the assessing officer even if the circle members refused to cooperate. The Court also rejected the argument that the time schedule mentioned in the rules was mandatory, holding that it was merely directory.
6. Validity of the Appointment of the Kar Adhikari
The petitioners argued that the appointment of the Kar Adhikari was invalid as it was not done in consultation with the Public Service Commission. The Court agreed, stating that the appointment was not in compliance with Section 43 of the U.P. Kshettra Samithis and Zila Parishads Adhiniyam, 1961. The Court noted that the appointment, even if regarded as temporary, could only be effective for two years, and the assessment was made beyond this period. Therefore, the assessment was held to be invalid.
Conclusion
The Court quashed the assessment order of Rs. 2,000 dated 25th March, 1968, due to the invalid appointment of the Kar Adhikari. The Court did not find merit in the other major points raised by the petitioners. No order as to costs was made due to the divided success in the writ petition.
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1971 (5) TMI 71
Issues:
1. Whether the contract was frustrated due to supervening circumstances.
2. Applicability of Section 56 of the Contract Act to leases.
3. Validity of the agreement to lease in the absence of a registered lease deed.
4. Responsibility to deliver possession of the leased properties.
5. Interpretation of the doctrine of frustration in the context of the contract.
Analysis:
1. The case involved a dispute where the respondents tendered for leasing lands from the appellant, but due to communal troubles and migration before the partition of India, the lease was not executed. The main issue was whether the contract was frustrated due to these supervening circumstances.
2. The Division Bench of the High Court held that the contract was frustrated, applying Section 56 of the Contract Act to leases. However, the Supreme Court disagreed, stating that Section 56 applies only to contracts, not completed leases. The Court cited the Raja Dhruv Dev Chand case to support this distinction.
3. Since no lease deed was executed or registered, only an agreement to lease existed. The failure to register the lease deed rendered the agreement to lease void under Section 56 of the Contract Act, as a lease could not be validly made without registration.
4. The terms of the agreement specified that the lessee was responsible for obtaining possession of the lands after the registration of the lease deed. The Court agreed with the trial court that the appellant was not required to deliver actual possession of the properties intended to be leased.
5. The Court interpreted the doctrine of frustration in light of the circumstances, emphasizing that if the performance of a contract becomes impracticable or useless due to supervening events beyond the parties' control, it can be deemed impossible. The Court found that the contract had become impossible to perform due to the communal troubles and migration, leading to frustration.
In conclusion, the Supreme Court dismissed the appeal, upholding the lower courts' decision that the contract had become impossible to perform. The Court directed each party to bear their own costs due to the uncontrollable circumstances both parties faced.
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1971 (5) TMI 70
Issues Involved:
1. Conviction and acquittal of the accused under various sections of the IPC.
2. Adequacy of the sentences imposed.
3. Prejudice due to refusal to grant adjournment for the production of defense witnesses.
4. Competence of the Additional Government Advocate to present the appeal in the High Court.
Detailed Analysis:
1. Conviction and Acquittal of the Accused:
The appeals concern the conviction and acquittal of ten accused persons charged under sections 302/34, 302/149, 307/34, 307/149, 302, 307, and 148 of the IPC. The Trial Court convicted Mansoor, Rashid, Ishaq, and Yunus, while acquitting the others due to the benefit of doubt. The High Court upheld these convictions and additionally convicted Mehmood s/o Bhondekhan, who was initially acquitted by the Trial Court. This resulted in the charges under sections 148 IPC and 302/149 IPC being proved against all five convicted accused persons. The High Court also found the charge under section 324/149 IPC for injuries inflicted on Ikbal Beg to be proved.
2. Adequacy of the Sentences Imposed:
The High Court did not find any cogent ground for enhancing the sentence of life imprisonment to that of death for the offence under section 302 read with sections 34 and 149 IPC. The revision petition for enhancement of the sentences was dismissed. The Supreme Court found no reason to interfere with the High Court's decision regarding the adequacy of the sentences.
3. Prejudice Due to Refusal to Grant Adjournment for the Production of Defense Witnesses:
The Supreme Court examined the circumstances under which the defense witnesses were not examined by the Trial Court. The accused had not filed any list of defense witnesses in the Court of the Committing Magistrate but did so in the Court of the Additional Sessions Judge. The Trial Court declined further adjournment after the defense witnesses were not present on the designated day. The Supreme Court allowed the accused to examine ten witnesses in the interests of justice, but only one witness, Munshi Khan, was examined. The Supreme Court found the evidence of Munshi Khan unimpressive and not calling for serious consideration.
4. Competence of the Additional Government Advocate to Present the Appeal in the High Court:
The Supreme Court addressed the contention that the appeal in the High Court was incompetent because the Additional Government Advocate was not the Public Prosecutor. The Gazette Notification showed that Mr. Dubey, the Additional Government Advocate, was notified as Public Prosecutor for the High Court in respect of cases arising in the State of Madhya Pradesh. The Supreme Court rejected the argument, stating that the Additional Government Advocate was lawfully empowered to present the appeals in the High Court against orders of acquittal.
Conclusion:
The Supreme Court dismissed both appeals, finding no substantial or compelling reasons to interfere with the High Court's judgment. The conviction of the appellants under sections 302/34 IPC and other related charges was upheld, and the competence of the Additional Government Advocate to present the appeal was affirmed. The Supreme Court also did not find any cogent grounds for enhancing the sentences imposed by the High Court.
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1971 (5) TMI 69
Issues Involved:
1. Vires and constitutionality of Sections 4(2) and 5 of the Punjabi University Act 35 of 1961.
2. Legality of the Notification dated 13-5-1969 extending the University's area of power.
3. Legality of the Circular dated 15-6-1970 as modified by Circular dated 2-7-1970 regarding the medium of instruction and examination.
4. Violation of fundamental rights under Articles 26(1), 29(1), and 30(1) of the Constitution.
5. Legislative competence of the State under Entry 11 of List II versus Union Parliament under Entry 66 of List I.
Detailed Analysis:
1. Vires and Constitutionality of Sections 4(2) and 5 of the Punjabi University Act 35 of 1961:
The Petitioners challenged the vires and constitutionality of Sections 4(2) and 5 of the Punjabi University Act 35 of 1961. They argued that Section 4(2) does not empower the University to make Punjabi the sole medium of instruction and that this power is vested in the Union Parliament under Entry 66 of List I. The Court held that Section 4(2) of the Act, by the use of the indefinite article "a" prefixed to the word medium, does not require Punjabi to be made the exclusive medium of instruction. The power conferred is only "to progressively adopt it as a medium of instruction and examination for as many subjects as possible."
2. Legality of the Notification dated 13-5-1969 extending the University's area of power:
The Petitioners did not initially challenge the Notification under sub-section (1) & (3) of Section 5 of the Act published on 13th May 1969, which resulted in their Colleges becoming affiliated with the University and ceasing affiliation with the Punjab University. The Court found that the affiliation of the Petitioners with the Punjab University is valid and cannot be challenged, as the Central Government had also issued necessary directions for disaffiliation under Section 72(1) of the Reorganisation Act.
3. Legality of the Circular dated 15-6-1970 as modified by Circular dated 2-7-1970 regarding the medium of instruction and examination:
The University issued a Circular on 15-6-1970 declaring that Punjabi would be the sole medium of instruction and examination for the pre-University. This was later modified to allow some relaxation for students who had passed their matriculation examination with English as their medium. The Court found that the University acted in excess of its power by adopting Punjabi as the sole or exclusive medium for Colleges affiliated with the University. The Circulars of 15-6-1970 and 2-7-1970 were struck down as invalid and ultra vires.
4. Violation of Fundamental Rights under Articles 26(1), 29(1), and 30(1) of the Constitution:
The Petitioners, educational institutions maintained by a religious minority, argued that the imposition of Punjabi as the sole medium of instruction infringed their right to conserve their script and administer their institutions. The Court held that the directive for the exclusive use of Punjabi and Gurumukhi script directly infringes the Petitioners' rights under Articles 29(1) and 30(1). The right to establish and administer educational institutions includes the right to choose the medium of instruction.
5. Legislative Competence of the State under Entry 11 of List II versus Union Parliament under Entry 66 of List I:
The Petitioners contended that the State legislature has no competence to make Punjabi the sole medium of instruction, a power vested in the Union Parliament under Entry 66 of List I. The Court referenced the Gujarat University case, holding that while medium of instruction falls within both Entry 11 of List II and Entries 63 to 65 of List I, it is excluded from Entry 11 of List II insofar as it is a necessary incident of the power under Entry 66 of List I.
Conclusion:
The Court allowed the petitions, declaring the impugned Circulars of 15-6-1970 and 2-7-1970 invalid and ultra vires. The University cannot prescribe Punjabi as the exclusive medium of instruction or compel affiliated Colleges established by linguistic or religious minorities to teach in Punjabi or take examinations in that language with Gurumukhi script. The State must harmonize its power to prescribe the medium of instruction with the rights of minorities to have the medium and script of their own choice.
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1971 (5) TMI 68
Issues Involved:
1. Commission of corrupt practices of undue influence under Section 123(2) of the Representation of the People Act, 1961.
2. Making appeal on the ground of caste under Section 123(3) of the Representation of the People Act, 1961.
Detailed Analysis:
1. Commission of Corrupt Practices of Undue Influence (Section 123(2)):
The first issue pertains to the allegation of undue influence by the appellant. The respondent claimed that the appellant used force to prevent the respondent's supporters from canvassing and voting, and that bogus votes were polled in favor of the appellant. Specific incidents in the villages of Dumduma and Mukhraon were highlighted. Evidence was presented showing that on January 30, 1969, the appellant and his workers restrained the respondent's workers in Dumduma using lathis and brickbats. Similarly, on January 31, 1969, in Mukhraon, the appellant's workers prevented the respondent's workers from canvassing by throwing brickbats. The High Court found these charges proved and concluded that these actions constituted undue influence, leading to the setting aside of the appellant's election.
2. Making Appeal on the Ground of Caste (Section 123(3)):
The second issue involves the appellant making appeals on the ground of caste. The appellant, a Bhumihar Brahmin, allegedly leveraged his caste identity to garner votes. Swami Bimlanand Saraswati, also a Bhumihar Brahmin, campaigned for the appellant, appealing to voters of the same caste to support the appellant. The High Court found that Swamiji made caste-based appeals in several villages including Harpur, Piprarh, Kanahari, Sujatpur, Chhitandihra, and Kuchhila. The evidence included oral testimonies and a letter (Ext. I) written by Swamiji to Ram Chandra Sharma, urging him to support the appellant on caste grounds. The High Court held that these appeals constituted a corrupt practice under Section 123(3) of the Act.
Evidence and Findings:
- Village Harpur: Witnesses including Ram Chandra Sharma, Ramnath Singh Yadav, and Suraj Nath Rai testified that Swamiji made caste-based appeals. The High Court found their testimonies credible, supported by the letter Ext. I.
- Village Piprarh: Witnesses Jadunandan Rai and Sarabjeet Rai testified about the caste appeal. The High Court found their evidence reliable.
- Village Kanahari: Witnesses Bindhyachal Rai, Deonandan Singh, and Manrakhan Rai testified. Despite some being polling agents for the respondent, the High Court found their testimonies credible.
- Village Sujatpur: Witnesses Sarabjeet Singh and Kamla Rai testified about the caste appeal. The High Court accepted their evidence.
- Village Chhitandihra: Witnesses Raj Narain Rai and Nethuni Rai testified. The High Court found their testimonies credible.
- Village Kuchhila: Witnesses including Abbas Mian, Lalmani Rai, Radha Mohan Rai, Digeshwar Rai, and Lalbahadur Rai testified about the caste appeal. The High Court found their evidence credible.
The High Court's findings were based on the credibility of the witnesses and the supporting evidence, including the letter from Swamiji. The appellant's failure to examine Swamiji as a witness weakened his defense. The High Court's judgment was upheld, confirming the commission of corrupt practices under Section 123(3).
Conclusion:
The Supreme Court dismissed the appeal, upholding the High Court's findings of corrupt practices under Section 123(3) of the Representation of the People Act, 1961. The election of the appellant was rightly set aside on these grounds. The issue of undue influence under Section 123(2) was not further examined, as the finding of corrupt practices on caste grounds was sufficient to dispose of the appeal.
Result: The appeal was dismissed with costs.
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1971 (5) TMI 67
Issues: Interpretation of Section 6(xvii) of the U.P. Imposition of Ceiling on Land Holdings Act, 1960
Analysis:
1. The appeals challenged the interpretation of Section 6(xvii) of the U.P. Imposition of Ceiling on Land Holdings Act, 1960. The provision exempted certain lands from the imposition of ceiling if they were used for specialized farming purposes. The vires of this provision were questioned in a Writ Petition, which was heard alongside the civil appeals.
2. The case involved a tenure-holder, Inayat Ali Khan, who objected to the imposition of ceiling on his land used for specialized farming, specifically for horse-breeding. He relied on Section 6(xvii) of the Act, which exempted land used for purposes such as poultry farming, dairying, or other prescribed purposes. A rule was framed specifying the types of specialized farms eligible for exemption.
3. The Prescribed Authority and the Additional District Judge held that the exemption claimed by Inayat Ali Khan was not sustainable. They interpreted the provision to require exclusive dedication to growing specific crops or for specific purposes as mentioned in Clause (xvii) and the corresponding rule. The lower courts emphasized that the land should be used for specialized farming purposes as defined in the Act.
4. In the revision before the High Court, it was upheld that the lower courts correctly interpreted the section. The High Court judge affirmed that the word 'and' in Clause (xvii) necessitated exclusive dedication to specialized farming activities as specified in the provision and the rule.
5. The appellant contended that the word 'and' in Section 6(xvii) should be read as 'or' to allow exemption for all specialized farms used for non-agricultural purposes. However, the Supreme Court disagreed, noting that the provision specifically mentioned poultry farming and dairying as eligible specialized farms, leaving other types to be prescribed by rules under the Act.
6. The Supreme Court dismissed Civil Appeal No. 2018 of 1968 and stated that the interpretation of the High Court was correct. The judgment applied to the other two appeals with similar facts. The Court ruled that farms used for horse-breeding, not explicitly included in the prescribed specialized farms, did not qualify for exemption under Section 6(xvii) of the Act.
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1971 (5) TMI 66
Issues Involved:
1. Method of Stock Valuation
2. Consistency of Accounting Practices
3. Determination of Profits for Tax Purposes
4. Market Value vs. Replacement Value
5. Anticipation of Profits and Losses
6. Validity of Long-Standing Practices
7. Impact on Tax Liability
Issue-Wise Detailed Analysis:
1. Method of Stock Valuation
The primary issue was whether the taxpayers' method of stock valuation, consistently followed and accepted by the revenue for 30 years, was legally acceptable for tax purposes under section 127 of the Income Tax Act, 1952. The taxpayers argued that their method, which involved valuing stock at replacement value, was acceptable. In contrast, the revenue contended that the profit figure returned was unacceptable in law, even if it was commendable as prudent accounting.
2. Consistency of Accounting Practices
The taxpayers had used the same stock valuation method for over 30 years, and the revenue had never objected until 1959. The court had to consider whether a long-standing practice should be changed without good reason. It was noted that if a practice infringes a rule of law, that would be a good reason for change, but it was admitted that this matter was not governed by any rigid rule of law.
3. Determination of Profits for Tax Purposes
The court emphasized that a trader's profit for tax purposes must be determined by framing a profit and loss account where all relevant expenditures are set against gross receipts. The ordinary principles of commercial accounting must be used unless a specific statutory provision requires otherwise. The court sought a method that was fair to both the taxpayer and the revenue.
4. Market Value vs. Replacement Value
The court discussed the principle of valuing stock at "cost or market value, whichever is the lower." It was noted that this principle is not a rule of law but a shorthand expression used in commercial accounting. The court had to decide whether the reduced prices at which the goods were to be offered for sale could be considered market prices. The taxpayers' method of using replacement value was scrutinized, and it was found that this method might be too conservative and not reflective of the actual market conditions.
5. Anticipation of Profits and Losses
The court highlighted that neither profit nor loss may be anticipated. However, an exception exists for stock-in-trade, allowing traders to value stock at market price if it is lower than the original cost. The taxpayers' method of valuing stock at replacement value was seen as potentially allowing them to anticipate losses more conservatively than necessary.
6. Validity of Long-Standing Practices
The court considered the principle that a long-standing practice should not be changed without good reason. It was noted that changing the method of valuation could result in the same stock being valued differently at the beginning and end of the year, potentially leading to double taxation or tax avoidance. The court was inclined to avoid a decision that would result in taxable profits escaping taxation.
7. Impact on Tax Liability
The court recognized that the taxpayers' method of stock valuation could lead to a lower taxable profit for the year, thus deferring tax liability. The court noted that while the taxpayers' method might be reasonable and not in conflict with any rule of law, it was also liable to abuse. The court ultimately decided that the Crown's method, though rough and ready, generally produced a reasonable result, and the taxpayers should not be compelled to change their method unless it was shown to be legally unacceptable.
Conclusion
The appeal was allowed, with the court finding that the taxpayers' long-standing method of stock valuation, though potentially conservative, was reasonable and did not conflict with any rule of law. The court emphasized the importance of consistency in accounting practices and the need to avoid decisions that could lead to double taxation or tax avoidance. The Crown's method was acknowledged as generally reasonable, but the court found that the taxpayers' method should not be abandoned without compelling reasons.
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1971 (5) TMI 65
Whether the orders dated August 5, 1966 and June 12, 1968 are legal and valid?
Whether the petitioner was absent with or without leave
Whether the right to receive pension by a Government servant is property, so as to attract Arts. 19(1)(f) and 31(1) of the Constitution?
Held that:- A reference to r. 5 of the Pension Rules shows that the officers mentioned therein are entitled to pension. The order dated August 5, 1966 declaring under r. 76 of the Service Code that the petitioner has ceased to be in government employ is set aside and quashed. The order dated June 12, 1968 stating that under r. 46 of the Pension Rules, the Department is unable to grant the petitioner pension is also set aside and quashed. When the order dated August 5, 1966 can no longer survive, the order dated June 12, 1968 quite naturally falls to the ground.
For the purposes of quantifying the amount having regard to the period of service and other allied matters, it may be necessary for the authorities to pass an order to that effect, but the right to receive pension flows to an officer not because of the said order but by virtue of the Rules. The Rules, we have already pointed out, clearly recognise the fight of persons like the petitioner to receive pension under the circumstances mentioned therein.
The right of the petitioner to receive pension is property under Art. 3 1 (1) and by a mere executive order the State had no power to withhold the same. Similarly, the said claim is also property under Art. 19(1)(f) and it is not saved by sub-article (5) of Art. 19. Therefore, it follows that the order dated June 12, 1968 denying the petitioner fight to receive pension affects the fundamental right of the petitioner under Arts. 19(1)(f) and 31(1) of the Constitution, and as such the writ petition under Art. 32 is maintainable. It may be that under the Pension Act (Act 23 of 1871) there is a bar against a civil court entertaining any suit relating to the matters mentioned therein. That does not stand in the way of a Writ of Mandamus being issued to the State to properly consider the claim of the petitioner for payment of pension according to law. Appeal allowed.
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1971 (5) TMI 64
Issues:
1. Whether the writ petitions involving a dispute between the Government of India and the State of Haryana are maintainable in the High Court or exclusively determinable by the Supreme Court under Article 131 of the Constitution.
Comprehensive Analysis:
The judgment delivered by the Punjab and Haryana High Court pertained to five writ petitions filed by a Government Medical Store Depot against the State of Haryana and the Excise and Taxation Officer, Karnal. The petitioner-depot, being a department of the Government of India, contended that it should not be registered as a "dealer" under the Punjab General Sales Tax Act, 1948, and thus not liable for sales tax assessment. On the other hand, the State of Haryana argued that the petitioner was indeed a dealer and should be assessed for sales tax on medical goods sold. The key issue revolved around the maintainability of these petitions in the High Court in light of Article 131 of the Constitution, which grants exclusive jurisdiction to the Supreme Court in disputes between the Government of India and states or between states themselves.
The first condition for the exclusion of jurisdiction of courts other than the Supreme Court under Article 131 is that the dispute must be between the Government of India and one or more states. The court found that this condition was met as the petitioner-depot, being a part of the Government of India, was in dispute with the State of Haryana. The second condition requires the dispute to involve a question on which the existence or extent of a legal right depends. In this case, the disagreement over the petitioner's liability for sales tax fulfilled this condition, thus invoking the jurisdiction under Article 131.
The court emphasized that Article 131 restricts the jurisdiction of all courts other than the Supreme Court in such disputes, mandating that only the Supreme Court has the authority to determine the issues raised between the parties. Consequently, the High Court held that the writ petitions were not maintainable in their court and dismissed them, suggesting that the petitioner could seek remedy in the Supreme Court for resolution of the disputed questions against the State of Haryana.
In conclusion, the judgment underscored the exclusive jurisdiction of the Supreme Court in disputes falling under Article 131 of the Constitution, thereby rendering the writ petitions between the Government of India and the State of Haryana not maintainable in the Punjab and Haryana High Court.
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1971 (5) TMI 63
Issues:
- Legality of search and seizure of documents by Assistant Sales Tax Officer
- Legality of administrative instructions issued by Commissioner of Sales Tax
- Admissibility of information gathered from seized documents in assessment proceedings
Analysis:
The judgment delivered by the High Court of Allahabad pertained to two petitions challenging the search and seizure of documents by an Assistant Sales Tax Officer under section 13(3) of the Sales Tax Act. The first issue addressed was the legality of the search conducted by the Assistant Sales Tax Officer. Citing the case of Agrawal Engineering Stores v. State of Uttar Pradesh, it was established that an Assistant Sales Tax Officer lacked the authority to conduct such searches, rendering the search and seizure of documents in these cases illegal.
Moving on to the second issue, the court examined the administrative instructions issued by the Commissioner of Sales Tax on April 1, 1967. These instructions aimed to influence the assessing authority's judgment based on reports from the Sales Tax Officer (Special Investigation Branch). The court deemed these instructions as infringing upon the independence of the assessing authority, thereby declaring them illegal. It was emphasized that the assessing authority should exercise its judgment independently without being swayed by external directives.
The final issue revolved around the admissibility of information obtained from seized documents in assessment proceedings. The petitioner argued that such information should not be admissible based on American legal principles. However, the court differentiated the American legal framework from the Indian context, emphasizing that the exclusionary rule in America was rooted in constitutional provisions absent in the Indian Constitution. The court referenced various legal precedents, including the Privy Council's decision in Kuruma v. The Queen, to assert that the admissibility of evidence should be based on relevance rather than the method of acquisition.
In conclusion, the court partially allowed the petitions by declaring the search and seizure of documents as illegal and restraining the Sales Tax Officer from following the Commissioner's administrative instructions. The court emphasized that evidence obtained through illegal means could be admissible in assessment proceedings in the absence of constitutional barriers, provided it is relevant to the issue being tried. The judgment highlighted the importance of upholding the independence of assessing authorities and ensuring the relevance of evidence in legal proceedings.
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1971 (5) TMI 62
Issues Involved:
1. Whether the acquisition of paddy through commission agents amounts to purchase attracting liability for purchase tax.
2. Applicability of section 10(7) of the Punjab General Sales Tax Act for imposing a penalty without an actual assessment.
3. Whether the petitioner acted bona fide regarding the treatment of paddy and rice as separate commodities.
4. Whether the petitioner was afforded a reasonable opportunity to be heard against the charge of submitting a false return.
Issue-wise Detailed Analysis:
1. Acquisition of Paddy Through Commission Agents:
The petitioner argued that acquiring paddy through commission agents does not amount to a purchase liable for purchase tax. However, the court found that the petitioner had withheld relevant information about the purchases made during the quarter in question. The return filed by the petitioner showed purchases as nil, which was false. The court emphasized that the petitioner had the opportunity to establish that the transactions did not amount to purchases but failed to produce the necessary records or other evidence.
2. Applicability of Section 10(7) Without Actual Assessment:
The petitioner contended that section 10(7) was not applicable as no penalty could be imposed without an actual assessment. The court held that sections 10 and 11 of the Act are independent of each other. The Assessing Authority is not prevented from taking action under section 10(7) if the circumstances warrant it, even before the assessment is finalized. The court noted that the incorrectness or falsity of the information in the return was evident, and the Assessing Authority was justified in imposing the penalty.
3. Bona Fide Act Regarding Paddy and Rice:
The petitioner claimed to have acted bona fide due to a controversy over whether paddy and rice should be treated as separate commodities. The court found this argument unconvincing, noting that Schedule C of the Act clearly lists rice and paddy as distinct commodities. The court concluded that the petitioner could not have bona fide believed that paddy and rice were one commodity, especially given their separate listing in the schedule.
4. Reasonable Opportunity to be Heard:
The petitioner argued that they were not given a reasonable opportunity to defend against the charge of submitting a false return. The court examined the facts and circumstances, noting that the petitioner had been asked to produce the books of account on the following day but failed to do so. The court found that the petitioner's conduct suggested an attempt to avoid producing the records. The Assessing Authority waited until 4:30 PM on the specified date before passing the ex parte order. The court concluded that the petitioner was afforded a reasonable opportunity and that there was no fault in the Assessing Authority's reliance on the information in its possession.
Conclusion:
The court upheld the orders of the Tribunal and the appellate and Assessing Authorities, imposing a penalty on the petitioner for submitting a false return under section 10(7) of the Act. The court dismissed the writ petition, stating that it is not within its purview to reconsider the quantum of the penalty, even if it appears excessive given the petitioner's previous unblemished record. The petition was dismissed, with each party bearing its own costs.
Petition Dismissed.
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1971 (5) TMI 61
Issues Involved:
1. Infringement of Article 14 of the Constitution.
2. Excessive delegation of essential legislative function and power.
Issue-Wise Detailed Analysis:
1. Infringement of Article 14 of the Constitution:
The petitioners challenged the validity of sub-sections (1) and (2) of section 3-A of the U.P. Sales Tax Act, 1948, arguing that they infringe Article 14 of the Constitution. The petitioners contended that the discretionary power conferred on the State Government to select any goods or class of goods and to subject the turnover to taxation at an enhanced or reduced rate results in a lack of uniformity and equality in the incidence of taxation. The court noted that taxing laws are not immune from attack based on Article 14 and that the validity of a tax law can be challenged on grounds of discrimination. The court referred to several Supreme Court judgments that established the principle that a taxing statute must not infringe the equality clause in Article 14. The court concluded that the impugned sub-sections of section 3-A provide the State Government with an arbitrary and unguided power to impose higher taxes on certain turnovers without any rational basis, thereby violating Article 14.
2. Excessive Delegation of Essential Legislative Function and Power:
The petitioners argued that section 3-A of the Act amounts to excessive delegation of legislative power to the executive, which is unwarranted and negates the basic injunction enjoined by Article 14. The court examined the legal position on delegation of legislative power, noting that while the Legislature can delegate subsidiary or ancillary powers, it cannot delegate its essential legislative function. The court referred to various Supreme Court judgments that emphasized the necessity for the Legislature to lay down guiding principles and provide adequate safeguards against arbitrary exercise of delegated power. The court found that section 3-A(1) and (2) of the Act do not provide any adequate guidance or safeguards, thereby resulting in excessive delegation of legislative power. The court held that the clause added to section 3-A(1) by U.P. Act 2 of 1970, which allows the State Government to impose higher taxes on goods not ordinarily sold at more than one point, is invalid due to excessive delegation and arbitrary discrimination.
Conclusion:
The court allowed the petitions filed by the brick manufacturers, holding that the clause added to section 3-A(1) by U.P. Act 2 of 1970 is invalid and ineffective. The impugned notifications dated April 5, 1961, and December 1, 1962, were also held to be invalid. The turnovers of the petitioners shall be taxed in accordance with the provisions of section 3 of the Act. The court did not find it necessary to decide on the validity of sub-section (2) of section 3-A for the retail vendors of country liquor, as the impugned notification dated April 2, 1969, was unenforceable against them on other grounds.
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1971 (5) TMI 60
Issues:
1. Entitlement to refund of sales tax paid on inter-State sale of gingerly seeds under Mysore Sales Tax Act, 1957.
2. Interpretation of rule 39-A of the Mysore Sales Tax Rules regarding conditions for claiming refund.
3. Application of Article 286(3) of the Constitution and Section 15(b) of the Central Sales Tax Act, 1956 in the context of refund of tax on declared goods sold in inter-State trade.
Detailed Analysis:
The judgment by the High Court of Mysore involved three revision petitions concerning the entitlement to a refund of sales tax paid on inter-State sale of gingerly seeds under the Mysore Sales Tax Act, 1957 for the assessment years 1963-64, 1964-65, and 1965-66. The petitioner, a second purchaser of the seeds, claimed a refund based on the proviso to section 5(4) of the Act read with rule 39-A of the Mysore Sales Tax Rules. The Sales Tax Appellate Tribunal had denied the refund, stating that the petitioner had not paid the tax, which was a prerequisite condition according to their interpretation of rule 39-A.
The High Court analyzed the legal framework, specifically referring to Article 286(3) of the Constitution and Section 15(b) of the Central Sales Tax Act, 1956. Section 15(b) provides for the refund of tax on declared goods sold in inter-State trade, leaving the determination of the refund recipient to the State sales tax law. The Court emphasized that the State law must provide for the refund of tax on declared goods sold in inter-State trade, with the recipient specified by the State. The Court highlighted the importance of giving effect to the provisions of Section 15(b) of the Central Sales Tax Act in the context of refunding taxes on inter-State sales of declared goods.
Regarding the interpretation of rule 39-A of the Mysore Sales Tax Rules, the Court noted that the rule clearly stated that the refund should be made to the dealer who made the inter-State sale, without imposing a condition that the dealer must have paid the tax under the Act. The Court held that the petitioner, having met the conditions of tax collection on declared goods and sale in inter-State trade, was entitled to the refund, despite the tax being collected from the first purchasers. The Court concluded that the sales tax authorities were incorrect in rejecting the refund claim and allowed the revision petitions, directing the assessing authority to refund the tax to the assessee, who was also entitled to costs.
In summary, the judgment clarified the entitlement to a refund of sales tax on inter-State sales of declared goods under the Mysore Sales Tax Act, emphasizing the importance of State laws providing for such refunds in line with the Central Sales Tax Act. The Court's interpretation of rule 39-A highlighted that the refund should be made to the dealer involved in the inter-State sale, without requiring the dealer to have paid the tax directly.
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