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2009 (6) TMI 1034
Issues involved: Interpretation of Section 11D of the Central Excise Act regarding the applicability of money credit scheme u/s Notification No. 45/89-C.E. for the period from 20-9-1991 to 30-9-1994.
Summary:
In the present case, the demand was confirmed on the ground that the Appellants availed money credit under Notification No. 45/89-C.E. for minor oils used in the manufacture of vegetable products. The demand was based on the assertion that the credit taken under the money credit scheme was essentially paper credit, and the duty collected from customers included the portion adjusted against the paper credit. The Appellants were held liable to pay the amount collected from customers as duty u/s 11D of the Central Excise Act. However, both sides acknowledged that the situation was covered in favor of the assessee by Board Circular No. 651/42/2002-CX, dated 7-8-2002, which clarified that the demand of duty under Section 11D in such a scenario is not sustainable.
The Circular emphasized that Section 11D requires a person liable to pay duty to deposit any amount collected in excess of the duty assessed or determined on excisable goods from the buyer, as representing duty of excise. It further clarified that in cases where duty collected has been deposited with the Government, Section 11D shall not apply, even if the money credit available with the manufacturer is utilized to pay duty on finished excisable products and this duty is collected from the buyer. The Circular directed that pending cases should be finalized accordingly.
In light of the Circular's provisions, the impugned order was set aside, and the Appeal was allowed.
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2009 (6) TMI 1032
Issues:
Violation of provisions of Section 16(1)(a) read with 68 of FER Act, 1973 by appellants for failure to receive balance foreign currency, Contravention of contractual obligations by appellants, Liability of appellants for non-performance under Section 16, Directors' responsibility under Section 68 of FER Act, 1973, Imposition of penalties on the appellants.
Analysis:
The judgment pertains to appeals filed against an Adjudication Order imposing penalties for contravention of FER Act, 1973. The appellants failed to receive the balance foreign currency as per an agreement with a non-resident, leading to alleged violations. The Tribunal allowed dispensation of pre-deposit penalty and proceeded with final disposal on merits.
The agreement between the appellants and the non-resident involved the sale of shares in a hotel project. The appellants contended that due to the non-resident's failure to obtain RBI permission, further payment could not be received, thus denying any contravention of FER Act, 1973. However, the Show Cause Notice highlighted the failure to secure the agreed payment, leading to adjudication proceedings.
The Tribunal found that the appellants did not fulfill the contractual obligations outlined in the agreement, such as obtaining necessary approvals and sanctions. The failure to demand performance or seek damages for breach of contract from the non-resident was noted. The appellants' inaction in ensuring compliance with the agreement's clauses led to non-receipt of the payment, violating Section 16 of FER Act, 1973.
Additionally, the appellants, being Directors of the company, were held responsible under Section 68 of FER Act, 1973 for the company's actions. The judgment emphasized that the Board of Directors is liable for company actions, and the penalty imposed was deemed appropriate considering the circumstances. The Tribunal dismissed the appeals, affirming the impugned order and directing the appellants to deposit the penalties within a specified timeframe.
In conclusion, the judgment underscores the importance of fulfilling contractual obligations, directors' responsibilities, and adherence to regulatory provisions. The appellants' failure to ensure compliance and demand performance resulted in penalties for violations of FER Act, 1973, ultimately leading to the dismissal of the appeals.
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2009 (6) TMI 1031
Issues Involved:
1. Admissibility of recovered loose chits as evidence.
2. Validity of admissional statements recorded under alleged threat and coercion.
3. Legitimacy of the recovered Indian currency claimed to be from a cassette business.
4. Burden of proof regarding the involvement in contraventions under the FER Act.
Issue-wise Detailed Analysis:
1. Admissibility of Recovered Loose Chits as Evidence:
The appellant argued that the recovered loose chits could not be taken into evidence and that the seized Indian currency of Rs. 6,70,000/- was not involved in the contravention of the FER Act. The Tribunal noted that while the recovery of loose chits was questioned, it was not outrightly denied. The Tribunal emphasized that the writings in the chits, although not amounting to an account book under Section 34 of the Indian Evidence Act, still constituted a valid piece of evidence. The Tribunal clarified that the Indian Evidence Act's provisions are not directly applicable to FERA proceedings, thus the chits could not be disregarded without proper examination.
2. Validity of Admissional Statements Recorded Under Alleged Threat and Coercion:
The appellant contended that his admissional statements were recorded under threat and coercion, citing judgments in Vinod Solanki v. Union of India and Mohtesham Mohd. Ismail v. Special Directorate, Enforcement Directorate. However, the Tribunal found that the appellant's description of threat and coercion was delayed and coincided with his bail application. The Tribunal concluded that admissional statements, even if retracted, could still be accepted as evidence if corroborated by other facts, referencing K.I. Pavunny v. Assistant Collector (HQ), Central Excise Collectorate, Cochin. The Tribunal found corroboration in the recovered chits and the admissional statement of the co-noticee.
3. Legitimacy of the Recovered Indian Currency Claimed to be from a Cassette Business:
The appellant claimed that the recovered Indian currency was related to his cassette business and that the writings on the chits were descriptions of this business. The Tribunal rejected this argument, noting that business records are typically maintained in a more permanent form rather than on loose chits. The Tribunal found the appellant's explanation unconvincing and unsupported by the nature of typical business record-keeping practices.
4. Burden of Proof Regarding the Involvement in Contraventions Under the FER Act:
The Tribunal discussed the burden of proof in quasi-criminal proceedings, referencing the principle that the prosecution need not prove its case with absolute certainty but must establish a degree of probability sufficient for a prudent person to believe in the existence of the fact in issue. The Tribunal cited Collector of Customs, Madras & Ors. v. D. Bhoormull and other cases to emphasize that the burden of proof can be lightened by the presumption of fact arising from the evidence presented. The Tribunal found that the statements of various individuals corroborated the appellant's involvement in contraventions under sections 9(1)(b), 9(1)(d), and 9(1)(f)(1) of the FER Act.
Conclusion:
The Tribunal dismissed the appeal, affirming the impugned order. It concluded that the admissional statement, corroborated by the recovered chits and statements of other individuals, supported the allegations against the appellant. The Tribunal directed that the pre-deposited amount of 50% penalty be appropriated towards the penalty and allowed the appellant to deposit the remaining amount within a week, failing which the Enforcement Directorate could recover the same in accordance with the law.
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2009 (6) TMI 1030
Issues Involved:
1. Contravention of Section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973.
2. Abetment under Section 64(2) of the Foreign Exchange Regulation Act, 1973.
3. Compliance with conditions of permissions granted by the RBI as per Section 49(1)(a) of the Foreign Exchange Regulation Act, 1973.
4. Validity and enforcement of the penalty imposed by the Special Director, Enforcement Directorate.
Issue-wise Detailed Analysis:
1. Contravention of Section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973:
The Tribunal examined the provisions of Section 9, which restricts payments to and from non-residents without RBI permission. The appellants, M/s. STAR, M/s. News Television, and M/s. Credit, were found to have violated these provisions. Specifically, M/s. STAR, a non-resident, transferred Rs. 81026331 to M/s. News Television, which was used to pay advertising agents in India. The Tribunal emphasized that Section 9 applies to any person in India or resident in India, including non-residents if the violation occurs within Indian territory. Consequently, the appellants' actions were deemed to contravene Section 9(1)(b) and 9(1)(d).
2. Abetment under Section 64(2) of the Foreign Exchange Regulation Act, 1973:
The Tribunal addressed the issue of abetment, noting that M/s. Credit, as a banker, facilitated the opening of the NRO account and transferred funds to M/s. News Television. The Tribunal referred to the definition of abetment under Section 107 of the Indian Penal Code, highlighting intentional aiding or instigation. It concluded that M/s. Credit's actions amounted to intentional aiding, thus constituting abetment under Section 64(2) of the Foreign Exchange Regulation Act, 1973.
3. Compliance with conditions of permissions granted by the RBI as per Section 49(1)(a) of the Foreign Exchange Regulation Act, 1973:
The Tribunal analyzed the conditions set by the RBI in its permission letters dated 15.12.1993 and 25.2.1994. M/s. STAR and M/s. Credit were found to have violated these conditions by transferring funds without specific RBI permission. The Tribunal applied Section 49(1)(a), which deems failure to comply with conditions of permissions as a contravention of the Act. It concluded that the appellants' actions violated the conditions of the RBI's permissions, thus contravening Section 9 of the Foreign Exchange Regulation Act, 1973.
4. Validity and enforcement of the penalty imposed by the Special Director, Enforcement Directorate:
The Tribunal upheld the penalties imposed by the Special Director, Enforcement Directorate, considering them neither excessive nor harsh. It rejected the appellants' arguments based on the absence of contumacious conduct, referring to the Supreme Court's judgment in Chairman, SEBI v. Sriram Mutual Fund, which emphasized mandatory penalties for contraventions of regulatory statutes. The Tribunal adopted a purposive approach to interpretation, aiming to fulfill the true purpose of the legislation. It concluded that the penalties were justified and directed the appellants to deposit their respective penalties within 7 days, failing which the Enforcement Directorate could recover the amounts, including through encashment of the unconditional bank guarantees.
Conclusion:
The Tribunal dismissed the appeals, affirming the penalties imposed by the Special Director, Enforcement Directorate, and emphasizing the importance of strict compliance with the Foreign Exchange Regulation Act, 1973, and the conditions of permissions granted by the RBI. The judgment underscores the applicability of Section 9 to both residents and non-residents within Indian territory and the significance of intentional aiding in constituting abetment under the Act.
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2009 (6) TMI 1029
Delay in issuing the show-cause notice - Non -maintenance of old records after expiry of 8 years as per provisions of Banking Regulations Act, 1949, and Rules - Requirement of Currency Declaration Forms (CDFs) - guilty on not taking reasonable care while depositing foreign currency in an NRE account - Validity of adjudication proceedings - deposits on overlapping dates coupled with high number of deposits - word 'abetment' - HELD THAT:- The appellant-bank has allowed 9 different deposits of foreign currency totalling to US dollars 72,800 within 9 days. This act of overlap-ping deposits in continuation is nothing less than aiding and abetting the second appellant in contravention of section 8(1) of FER Act, 1973. This is more so when CDF is not called for by the appellant-bank from second appellant. As FER Act, 1973, has not defined the word 'abetment', so we are required to go to the definition contained in Indian Penal Code where section 107 has stated.
It is well-settled that in order to constitute the offence of abetment the abettor must be shown to have done acts or omissions of (1) intentional aiding or (2) instigating someone to do prohibited acts or (3) engaging in a conspiracy in the commission of the crime. Mere association or general advice or mere advancing of loans is not insufficient.
The second appellant has taken a plea that SCN or notice of hearing is served on him by affixation under rule 10(c), Adjudication Proceedings and Appeal Rules, 1974, and he has brought the deposited foreign currency in a lawful manner from USA where he is residing. Firstly, the SCN is required to be served and there is no illegality if the same is served by affixation when appellant is not ready to face the adjudication. His address given of C-108, South Extension, Part II, New Delhi, is served by affixation which is permitted under the Adjudication Proceedings and Appeal Rules, 1974. Moreover, he has not brought out any CDF through which he has brought the deposited foreign currency in India. The burden under section 71, FER Act, 1973, lies on him. Moreover, the factum of bringing foreign currency into India through CDF is within his special knowledge. This fact also casts a burden on second appellant to prove by logical evidence, i.e., production of CDF, that he has brought foreign currency in India in a lawful manner. As the burden under section 106, Indian Evidence Act, 1882, has not been discharged so he has been correctly held guilty and the impugned order cannot be termed as bad in law. Nor the impugned order contains any other error so is required to be affirmed. This Appeal No. 1109/2004 contains no merit so is required to be dismissed.
Therefore, these appeals do not contain any merit and are required to be dismissed. The appellant-bank has not performed the expected duty of due care and attention while making 9 different deposits in NRE account of same person on overlapping dates within a short period of 9 days. There is no other error pointed out in the impugned order which is required to be affirmed.
Thus, these appeals are dismissed having no merits. The impugned order is sustained and maintained. An order is passed accordingly.
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2009 (6) TMI 1028
Issues Involved:
1. Calculation of entertainment tax for setting off eligible capital investment.
2. Legality and interpretation of the impugned Circulars dated 23.11.2000 and 05.12.2000.
3. Application of the doctrine of promissory estoppel.
4. Extension of time for completion of multiplex projects under the incentive scheme.
5. Determination of eligible capital investment for tax exemption purposes.
6. Discrimination in extending the operative period of the scheme.
Issue-wise Detailed Analysis:
1. Calculation of Entertainment Tax for Setting Off Eligible Capital Investment:
The court held that the respondent-State is not justified in considering the entire amount of the value of the ticket as the capital value for the purpose of setting off the eligible capital investment. The amount collected by the multiplex owners includes an element of tax, and only the applicable rate of tax should be set off against the eligible investment. The entire ticket value cannot be considered for this purpose.
2. Legality and Interpretation of the Impugned Circulars:
The court found that the method of calculating tax liability prescribed by the impugned Circulars is inconsistent with Section 3 of the Gujarat Entertainment Tax Act. The Circulars cannot mandate the inclusion of notional tax to determine the gross amount for setting off against the incentive limit. This would be contrary to the charging section and the basis of the incentive scheme. The Circulars, therefore, were deemed illegal and contrary to the provisions of the Act and the exemption notification.
3. Application of the Doctrine of Promissory Estoppel:
The court held that the doctrine of promissory estoppel applies in this case. The government is estopped from changing the basis of calculation of tax liability for calculating set-off against the incentive limit, as the multiplex owners made investments based on the terms of the notification. Changing the calculation method would breach public faith and the principles of promissory estoppel.
4. Extension of Time for Completion of Multiplex Projects:
The court addressed the issue of extending the time for completing multiplex projects under the incentive scheme. The petitioners argued that the delay was due to unforeseen circumstances like the earthquake and communal riots. The court noted that the State Level Committee had recommended extensions considering these factors. However, the Commissioner of Tourism rejected the extension applications based on extraneous grounds. The court found that the rejection was not justified and was based on irrelevant considerations.
5. Determination of Eligible Capital Investment for Tax Exemption Purposes:
The court remanded the cases of certain petitioners to the State authorities to decide afresh the issue of eligible capital investment made by them up to 30.11.2002. The authorities were directed to issue the final eligibility certificate and raise the demand or grant a refund, as the case may be, within six weeks.
6. Discrimination in Extending the Operative Period of the Scheme:
The court found that the State Government's decision not to extend the operative period of the scheme beyond 30.11.2000 only for multiplexes was discriminatory. The extension was granted to other tourism projects, but not to multiplexes, which was deemed unfair. The court directed the State to reconsider this aspect and ensure that multiplex owners are not unfairly denied the benefits of the scheme.
Conclusion:
The court concluded that the State's actions in calculating the entertainment tax and rejecting the extension applications were not justified. The impugned Circulars were found to be illegal, and the doctrine of promissory estoppel was applied to protect the investments made by the multiplex owners. The court directed the State authorities to reconsider the eligible capital investment and the extension of the operative period of the scheme.
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2009 (6) TMI 1027
Issues involved:
The judgment deals with the following substantial questions of law:
(i) Whether there has been a violation of Section 2B of the Central Excise Act, 1944 read with Rule 3 of the Central Excise Rules, 2002 as contended by the assessee?
(ii) Whether the power delegated to the Chief Commissioner under Section 37A of the Central Excise Act, 1944 to exercise the power of the Board under Rule 3(2) of the Central Excise Rules, 2002 was correctly rejected by the Tribunal?
Issue 1: Violation of Section 2B of the Central Excise Act, 1944:
The Tribunal below accepted the contentions of the assessee regarding the violation of Section 2B of the Central Excise Act, 1944 read with Rule 3 of the Central Excise Rules, 2002. This formed a substantial question of law in the appeal.
Issue 2: Delegation of Power to Chief Commissioner:
The Tribunal below rejected the revenue's contentions that the Central Government, under Section 37A of the Central Excise Act, 1944, had delegated the power to the Chief Commissioner to exercise the power of the Board under Rule 3(2) of the Central Excise Rules, 2002. This rejection raised another substantial question of law in the appeal.
The Court called for records and issued the usual notice. Dr. Chakraborty, a learned senior advocate, appeared for the respondent and accepted the notice through his junior Mr. A. Biswas. The appellant was directed to prepare and file the required number of informal paper books within two months. The parties were granted liberty to mention the appeal when ready for hearing.
After hearing the advocates for both parties and considering the facts of the case, the Court disposed of the application for stay by directing that any action taken in the meantime shall abide by the result of the appeal. The application for stay was thus disposed of, and no costs were awarded. All parties were instructed to act on a signed xerox copy of the order.
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2009 (6) TMI 1026
Issues Involved:
1. Release of amount payable to petitioners as per the Award dated 30th May, 1995.
2. Validity of withdrawal from acquisition under Section 48 of the Land Acquisition Act, 1894.
3. Applicability of Section 16 of the Land Acquisition Act, 1894 regarding possession.
4. Discrimination in treatment between plot holders of Plot Nos. 50, 51 and 53A.
Detailed Analysis:
1. Release of Amount Payable to Petitioners as per the Award Dated 30th May, 1995:
The petitioners sought the release of the amount payable to them under the Award dated 30th May, 1995, passed by the Special Land Acquisition Officer. The Award was a joint award for Plot Nos. 50, 51, and 53A. The petitioners argued that they were not given any benefit under the Award, while the owner of Plot No. 53A received compensation. The respondents continued to retain possession of the plots without making any payment to the petitioners. The Court directed the respondents to release the amount payable to the petitioners as per the Award, along with interest.
2. Validity of Withdrawal from Acquisition under Section 48 of the Land Acquisition Act, 1894:
The respondents issued an order under Section 48(2) of the Act in September 1998, stating that the land in question was in possession of the department as a tenant and not under the Act. The petitioners argued that since the possession was already with the Defence Department, Section 48 could not be invoked. The Court referred to an earlier Division Bench judgment which held that once possession is taken, the land vests with the Government, and withdrawal under Section 48 is not permissible. The Court quashed the order under Section 48 and directed the respondents to make the payment as per the Award.
3. Applicability of Section 16 of the Land Acquisition Act, 1894 Regarding Possession:
The respondents argued that the possession was not taken as per Section 16 of the Act, which requires actual possession for the land to vest with the Government. The Court noted that the Defence Department was in possession of the land as a tenant before the acquisition and continued to retain possession after the Award. The Court held that the possession was sufficient to vest the land with the Government, and the respondents could not withdraw from the acquisition under Section 48.
4. Discrimination in Treatment Between Plot Holders of Plot Nos. 50, 51 and 53A:
The petitioners argued that they were discriminated against as the owner of Plot No. 53A received compensation while they did not, despite the Award being common for all plots. The Court agreed with the petitioners, stating that the respondents could not give different treatments to citizens whose cases are identical. The Court emphasized that the respondents should have acted reasonably and without discrimination, giving similar treatment to the petitioners as was given to the owner of Plot No. 53A.
Conclusion:
The Court allowed the petition, quashed the order under Section 48(1) of the Act, and directed the respondents to make the necessary payment to the petitioners as per the Award dated 30th May, 1995, within three months, along with interest as contemplated under the Act. The Court also stayed the order for two months upon the request of the respondents' counsel.
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2009 (6) TMI 1025
Issues Involved:
1. Quashing of complaint u/s 482 of the Code of Criminal Procedure, 1973.
2. Allegations of defamation u/s 499 and 500 of the Indian Penal Code.
3. Validity of the process issued by the Magistrate.
4. Verification statement requirements.
5. Mens rea requirement for defamation.
6. Applicability of section 397(3) of the Code of Criminal Procedure, 1973.
Summary:
1. Quashing of Complaint u/s 482 of the Code of Criminal Procedure, 1973:
The applicants sought to quash a complaint filed by the 1st respondent alleging defamation u/s 499 and 500 of the Indian Penal Code. The learned Magistrate initially dismissed the complaint against accused no.1 but issued process against accused nos.2 to 8. The Sessions Judge later directed the issuance of process against accused no.1 as well.
2. Allegations of Defamation u/s 499 and 500 of the Indian Penal Code:
The 1st respondent, a Public Charitable Trust, alleged that defamatory statements made by accused no.1 were published by the applicants in their newspaper, causing harm to the Trust's reputation. The applicants contended that the statements were true reproductions of what was said by accused no.1 at a press conference.
3. Validity of the Process Issued by the Magistrate:
The applicants argued that the verification statement did not mention any specific allegations against them, nor did it reference the publication of the news item. The court found that the verification statement lacked details about the applicants' role, making the issuance of process against them illegal.
4. Verification Statement Requirements:
The court emphasized that the verification statement must set out how the offence was committed and how the accused are responsible. In this case, the verification statement only reproduced the utterances of accused no.1 without mentioning the applicants or their publication.
5. Mens rea Requirement for Defamation:
The court noted that mens rea is an essential ingredient for defamation u/s 499 of the Indian Penal Code. The applicants argued that as a company and a printing press, they could not possess mens rea. The court acknowledged this but did not delve deeper as the process was set aside on other grounds.
6. Applicability of Section 397(3) of the Code of Criminal Procedure, 1973:
The 1st respondent argued that the application was a second revision, barred by section 397(3). The court, however, held that inherent jurisdiction u/s 482 could still be exercised despite such a bar, as established by the Supreme Court.
Conclusion:
The court quashed the process issued against the applicants, stating that the verification statement did not justify the issuance of process. The benefit of this order was limited to the applicants, and the case against the other accused would proceed as per law.
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2009 (6) TMI 1024
Issues:
The judgment involves the quashing of criminal proceedings against the second accused in a case under Section 138 of the Negotiable Instruments Act, 1881, based on the grounds of the complaint being filed after the statutory period and the interpretation of the liability of an authorized signatory.
Details:
Issue 1: Complaint filed after statutory period:
The petitioner sought to quash the criminal proceedings on the grounds that the complaint was lodged after the statutory period prescribed in Section 138 of the Negotiable Instruments Act, 1881 was over. However, the court noted that the proviso to Section 142 allows for the court to consider a complaint even after the prescribed period if sufficient cause is shown. The petitioner's counsel focused on the second contention regarding liability as an authorized signatory.
Issue 2: Liability of an authorized signatory:
The petitioner, as the authorized signatory of his wife's proprietary concern, issued a cheque that was dishonored. The petitioner contended that he cannot be prosecuted solely for signing and issuing the cheque on behalf of another person. The court analyzed Section 141 of the Negotiable Instruments Act, which deals with offenses committed by companies, and noted that a proprietary concern does not fall under the definition of a company. Referring to previous judgments, the court held that only the drawer of the cheque can be prosecuted under Section 138 of the Act. Since the cheque was not drawn on an account maintained by the petitioner, the prosecution against him was deemed unsustainable.
Conclusion:
The court concluded that the petitioner cannot be prosecuted for the offense under Section 138 of the Negotiable Instruments Act, and therefore, the criminal proceedings against him in C.C. No. 493/2008 were quashed. It was clarified that the quashing of proceedings applied only to the petitioner, not the other accused.
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2009 (6) TMI 1023
Issues involved: Challenge to detention order u/s T.N. Act 14/82 branding detenu as "Goonda" u/s 2(f) of the Act. Main contentions raised: (i) Unexplained delay in passing detention order, (ii) Ground of detention referring to only one incident u/s 397 IPC.
Unexplained Delay in Passing Detention Order:
The detenu was involved in a criminal incident on 01.06.2007 but the detention order was passed on 19.08.2008, after a significant delay. The detaining authority justified the delay by stating that the detenu was habitually committing crimes prejudicial to public order. However, the court emphasized that a long and unexplained delay between the criminal act and the detention order can break the chain of reasoning for detention. The court referred to a Supreme Court case where it was held that the time lapse should be sufficiently explained to maintain the nexus between the incident and the detention order. In this case, the court found no valid explanation for the delay, leading to the quashing of the detention order.
Nexus Between Prejudicial Activity and Detention Order:
The court highlighted that the live link between the alleged prejudicial activity and the apprehension for future actions is crucial for a detention order to be valid. In this case, the detaining authority failed to establish a clear connection between the incident on 01.06.2007 and the necessity for the detention order passed on 19.08.2008. The court noted the absence of any material showing the detenu's continued prejudicial activities during the period of delay. This lack of evidence, coupled with the unexplained delay, rendered the detention order invalid.
Conclusion:
The High Court allowed the habeas corpus petition, quashing the detention order dated 19.08.2008. The detenu, Kumar @ Minnal Kumar, was directed to be released unless required in connection with any other case. The court's decision was based on the absence of a valid explanation for the delay in passing the detention order and the failure to establish a clear nexus between the alleged prejudicial activity and the need for detention.
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2009 (6) TMI 1022
Maintainability - Applications seeking cancellation of bail granted by the Ld. Magistrate - accused charged for the offence Under Sections 420, 465, 467, 468, 471, r/w. 34 of I.P.C - Original Complainant is u/s 439(2) - HELD THAT:- I am therefore of the firm view that since Sections 437(5) and 439(2) Code of Criminal Procedure cannot be invoked by the Applicants for reasons set out hereinabove, and since there is no other efficacious remedy available to the applicants under the Code, this Court can decide the applications by invoking its inherent jurisdiction Under Section 482 Code of Criminal Procedure, and/or under Article 227 of the Constitution of India.
In the present case as set out earlier even the basic inquiry as to the nature of sickness is not made prior to grant of bail, more so when the Bail Application was also silent on this aspect. In the absence of any such material before the Ld. Magistrate, he ought not to have granted bail to the accused u/s 437(1) proviso only on the ground that admittedly the accused is under medical treatment. If such orders are allowed to be passed it would open flood gates for such applications to be made in serious non-bailable cases, only on the pretext of the accused being on medical treatment. In my view the Ld. Magistrate by granting bail to the accused only on the ground of him being under medical treatment at the hospital exhibits a totally casual approach in granting bail to an accused u/s 437(1) proviso which is a discretionary power required to be exercised in a judicial manner and on well settled judicial principles. Also in my view the Ld. Magistrate by not taking into account the relevant circumstances like the nature of sickness, the medical facilities/treatment available at the existing hospital, etc. and by granting bail only on the ground of the Respondent Accused taking medical treatment in hospital amounts to granting of bail u/s 437(1) proviso under irrelevant circumstances.
The Ld. Magistrate has not only failed to call for a medical report from the Hospital but has not even prima facie satisfied himself as regard the nature of the sickness, which ought to have been done by him at the threshold. The submissions now made as regard the contents of the discharge report of Lilavati Hospital is admittedly subsequent to the passing of the impugned order and, therefore, is of no assistance to the Respondent Accused as the said discharge report was not even in existence when the impugned order was passed.
Before I part with the Order I must record that several submissions were advanced before me by the parties to the Applications touching the merit of the matter. However, since the limited question before me pertains to the correctness or otherwise of the impugned Order, I have thought it fit to keep such submissions out of the purview of the foregoing discussion. The observations made in this Order are for the limited purpose of deciding the Applications for cancellation of bail. It is clarified that notwithstanding this Order the Respondent Accused may apply for regular bail before the appropriate Court. If such Application is made the same shall be decided on its own merits.
Thus, the order passed by the Ld. J.M.F.C., granting Bail to the Respondent Accused is perverse, arbitrary, without application of mind and displays incorrect exercise of discretion. Hence I pass the following order - The order of the Ld. J.M.F.C., granting bail to the Respondent Accused is hereby quashed and set aside.
Application allowed.
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2009 (6) TMI 1021
Issues Involved:
1. Taxability of income in India u/s 5(2) and business connection u/s 9(1)(i).
2. Existence of Permanent Establishment (PE) in India under DTAA.
3. Attribution of income to PE in India.
4. Deduction of expenditure.
5. Levy of interest u/s 234A and 234B.
Summary:
Issue 1: Taxability of Income in India u/s 5(2) and Business Connection u/s 9(1)(i)
The Tribunal held that the income was chargeable to tax under section 5(2) of the Act as the assessee had a business connection in India as per section 9(1)(i) of the Act. It was determined that 15% of the revenue accrued to the assessee in respect of the bookings made in India should be treated as income accrued or assessed in India.
Issue 2: Existence of Permanent Establishment (PE) in India under DTAA
The Tribunal concluded that the assessee had a permanent establishment in India based on Circular No 23 of 1969 and the Supreme Court judgment in DIT (International Taxation) v. Morgan Stanley & Co. [2007] 292 ITR 416. The High Court upheld this finding.
Issue 3: Attribution of Income to PE in India
The Tribunal attributed 15% of the revenue accruing to the assessee in respect of bookings made in India as income accruing or arising in India. This was based on the principle that the major part of the work was processed at the host computer in the USA, and the activities in India were only a minuscule portion. The High Court upheld this approach, emphasizing that the proportion fixed by the Tribunal was based on relevant material and should not be disturbed.
Issue 4: Deduction of Expenditure
The CIT (Appeals) upheld the Assessing Officer's decision regarding the deduction of expenditure. However, the Tribunal noted that the assessee paid 60% of the receipts to Sitar, which was far in excess of the proportion of income attributable to India, and therefore, no income would be chargeable to tax in India.
Issue 5: Levy of Interest u/s 234A and 234B
The Tribunal did not specifically address the levy of interest u/s 234A and 234B in the summarized judgment.
Conclusion:
The assessee's appeals were allowed by respectfully following the decision of the High Court in the case of DIT v. Galileo International Inc. [2011] 336 ITR 264. Consequently, the penalty under section 271(1)(c) was also deleted, and all six appeals were allowed.
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2009 (6) TMI 1020
Issues involved: Coercive steps under Revenue Recovery Act pursued during pendency of statutory appeal.
Summary:
The petitioner approached the High Court due to coercive steps taken by the respondents under the Revenue Recovery Act, despite a pending statutory appeal. The petitioner had filed a memorandum of appeal challenging the order imposing a penalty. The petitioner received a notice for the appeal hearing scheduled on a specific date. The Court, after hearing both parties, decided not to delve into the merits of the case considering the appeal was already set for hearing. The Court directed the second respondent to consider the appeal in accordance with the law and provide a hearing, while keeping all coercive proceedings against the petitioner on hold until a final decision is made on the appeal. The Writ Petition was disposed of accordingly.
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2009 (6) TMI 1019
Issues Involved:
1. Market rate determination for acquired land.
2. Severance compensation for unacquired land.
3. Deduction of land area for public use.
4. Validity of Government Resolutions in determining compensation.
5. Burden of proof for enhancement of compensation.
Detailed Analysis:
1. Market Rate Determination for Acquired Land:
The appeals arose from the award dated 29/4/1995 by the Civil Judge, S.D. at Solapur, fixing the market rate at Rs. 600/- per sq. mtr. for 7620 sq. mtrs. of land. The Reference Court relied on the valuation report by PW 2 and the ready reckoner (Exhs. 78 and 79), which indicated a market rate of Rs. 650/- per sq. mtr. However, the Court fixed the rate at Rs. 600/- per sq. mtr. without clear reasoning. The High Court noted that the ready reckoner for 1989 (Exh. 78) set the rate at Rs. 500/- per sq. mtr., which should have been considered. The High Court thus modified the market rate to Rs. 500/- per sq. mtr., finding the Reference Court's rate unsustainable.
2. Severance Compensation for Unacquired Land:
The claimants argued that the remaining 344 sq. mtrs. of land, not acquired, was not useful and sought severance compensation. The Reference Court granted compensation at the same rate of Rs. 600/- per sq. mtr. for this unacquired land. The High Court upheld this decision, noting no evidence was provided by the State or Municipal Corporation to show that the plot had independent access or could be used by the owners.
3. Deduction of Land Area for Public Use:
The Land Acquisition Officer deducted 1789 sq. mtrs. from the 9409 sq. mtrs. for road and open space development. The Reference Court and the High Court confirmed this deduction, noting it was less than 20%, which is permissible as per legal precedents. The deduction was not contested by the State or Municipal Corporation in their appeals.
4. Validity of Government Resolutions in Determining Compensation:
The Reference Court relied on the Government Resolution dated 31/10/1994, which stated that compensation should be based on the higher value between sale transactions and the ready reckoner. The High Court upheld this reliance, stating that the policy aimed to offer better compensation to landowners and was binding on the State. The High Court dismissed arguments against the GR, emphasizing that it was within the Government's authority to set such policies.
5. Burden of Proof for Enhancement of Compensation:
The State and Municipal Corporation argued that the claimants did not provide comparable sale instances to justify the enhancement. The High Court noted that the Reference Court had considered various pieces of evidence, including valuation reports and sale instances from neighboring plots. The High Court found that the Reference Court's reliance on these pieces of evidence was appropriate, though it corrected the final market rate based on the ready reckoner for 1989.
Conclusion:
The High Court dismissed the appeal for further enhancement by one of the claimants and partly allowed the appeals by the State and Municipal Corporation. The market rate was reduced from Rs. 600/- to Rs. 500/- per sq. mtr. for the acquired land, while the severance compensation for 344 sq. mtrs. was upheld. The decision emphasized the validity of Government Resolutions in determining compensation and confirmed the deduction of land for public use.
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2009 (6) TMI 1018
Issues Involved:
1. Allegations of oppression and mismanagement under Sections 397, 398, 402, 403, and 406 of the Companies Act, 1956.
2. Validity of board meetings and resolutions.
3. Legality of the removal of the petitioner from directorship.
4. Increase in authorized share capital and allotment of shares.
5. Appointment of additional directors.
6. Shifting of the registered office.
7. Allegations of siphoning off funds by the petitioner.
8. Maintainability of the company petition.
Detailed Analysis:
1. Allegations of Oppression and Mismanagement:
The petitioner alleged oppression and mismanagement by respondents Nos. 2 and 3, claiming that they had taken control of the company without valid authority and had acted with mala fide intentions to usurp the management of the company.
2. Validity of Board Meetings and Resolutions:
The petitioner contended that no valid board meetings were held, and no notices were served regarding these meetings. The respondents failed to provide conclusive proof of service of notices, relying solely on certificates of posting, which the court found insufficient. The court emphasized that the onus to prove service rests on the sender, and meetings held without notice to all directors are invalid.
3. Legality of the Removal of the Petitioner from Directorship:
The petitioner argued that his removal from directorship was illegal and without notice, purportedly under Section 283(1)(g) for not attending three consecutive board meetings, which were never held. The court found the removal arbitrary and capricious, lacking proper notice and evidence of the meetings.
4. Increase in Authorized Share Capital and Allotment of Shares:
The petitioner claimed that the increase in authorized share capital from Rs. 5 lakhs to Rs. 10 lakhs and the subsequent allotment of shares to respondents Nos. 2 and 3 were done without his knowledge and were aimed at diluting his shareholding. The court found these actions to be acts of oppression, as they were conducted without proper purpose and without following due procedure. The increase in share capital and the allotment of shares were set aside, restoring the status quo ante.
5. Appointment of Additional Directors:
The petitioner challenged the appointment of respondents Nos. 5 to 9 as additional directors, arguing that these appointments were made without proper notice and with the intention to reduce his representation on the board. The court found these appointments to be illegal and acts of oppression, setting them aside and restoring the status quo ante.
6. Shifting of the Registered Office:
The petitioner contended that the shifting of the registered office was done unilaterally and illegally, with the intention to prevent him from attending board meetings. The court found the resolution for shifting the registered office and the filing of Form No. 18 with the Registrar of Companies to be null and void.
7. Allegations of Siphoning Off Funds by the Petitioner:
The respondents alleged that the petitioner had siphoned off funds from the company, amounting to over Rs. 4 crores, and had not rendered any accounts for the same. The court noted that the petitioner had failed to provide satisfactory explanations for the alleged siphoning off of funds and had not come with clean hands, losing his moral and legal rights.
8. Maintainability of the Company Petition:
The respondents challenged the maintainability of the company petition, pointing out defects in the supporting affidavit. The court, however, focused on substantial justice and did not dismiss the petition on technical grounds.
Conclusion:
The court found that the actions of the respondents constituted acts of oppression and mismanagement. The increase in authorized share capital, allotment of shares, and appointment of additional directors were set aside, restoring the status quo ante. The court also directed an investigation into the siphoning off of funds by the petitioner and ordered the petitioner to bring back the siphoned-off amounts. The petition was disposed of in these terms, and all interim orders were vacated.
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2009 (6) TMI 1017
Issues involved:
The issue involves the petitioner seeking exemption from personal appearance in a criminal case being tried as a warrant case, under Section 205 of the Code of Criminal Procedure.
Summary:
The petitioner, the first accused in a criminal case, filed an application under Section 205 of the Code of Criminal Procedure seeking exemption from personal appearance due to employment in Pune. The Magistrate dismissed the petition, stating that exemption cannot be granted in a warrant case. The petitioner filed a petition under Section 482 of the Code of Criminal Procedure to quash the order and seek permission for exemption.
The court noted that Section 205 allows the Magistrate to exempt the accused from personal appearance at trial, considering both prosecution convenience and accused difficulties. The court highlighted the importance of the accused's presence during plea recording and questioning under Sections 246(2) and 313 of the Code of Criminal Procedure. It was emphasized that exemption can be granted in appropriate cases, despite the requirement under Section 273 for the accused's presence during trial.
Referring to legal precedents, the court mentioned that in certain circumstances, the accused's statement under Section 313 can be dispensed with if the accused undertakes not to raise any prejudice. The court also cited a Supreme Court ruling explaining the need for the accused's presence during trial proceedings.
The court clarified that while the Magistrate can grant exemption under Section 205(1) for temporary absence, permanent exemption requires compliance with specific conditions outlined by the Supreme Court. The petitioner was granted liberty to reapply for exemption with proper documentation meeting the necessary conditions.
In conclusion, the petition was disposed of, allowing the petitioner to move the Magistrate for exemption with a proper application meeting the required conditions.
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2009 (6) TMI 1015
The High Court of Bombay dismissed the appeal as the questions raised were already covered by previous judgments. The appeal was dismissed for want of substantial question of law with no order as to costs.
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2009 (6) TMI 1014
Issues involved:
The issue involves the deletion of an addition made by the assessing officer on account of the difference between the market price of sugar and the concessional price at which sugar was sold to the cane growers. The question is whether the assessee was liable to be assessed on this difference.
Judgment Details:
Issue 1: Addition of Difference in Sugar Prices
The High Court considered the appeal challenging the deletion of the addition of Rs. 98,12,359 by the assessing officer. The Court noted that the Revenue cited a judgment in a similar case where the Central Board of Direct Taxes Circular No.117 was relied upon. The Circular allowed for the deduction of rebates passed on by consumer cooperative stores to their members. The Court found that the Circular was applicable to the present case, and the appellant's attempt to draw a distinction on facts was not successful. Consequently, the appeal was dismissed for lack of a substantial question of law.
Conclusion:
The High Court upheld the deletion of the addition made by the assessing officer based on the Circular allowing deductions for rebates passed on by consumer cooperative stores, leading to the dismissal of the appeal.
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2009 (6) TMI 1013
Issues involved:
The issues involved in this case are the validity of the order of the CIT (Appeals), the legality of proceedings u/s 148 of the Income Tax Act, and the addition of Rs. 9,00,000 as proposed by the Assessing Officer.
Validity of CIT (Appeals) Order:
The appeal was filed against the order of the CIT (Appeals)-XIX, New Delhi dated 07.07.2009 for the assessment year 2001-02. The original grounds challenged the order on the basis of being bad both on law and facts. The appellant also contended that the order was perverse and failed to address the issue of the alleged information forming the basis for initiating action u/s 148. The appellant sought various reliefs, including challenging the validity of the CIT (Appeals) order.
Legality of Proceedings u/s 148:
The notice u/s 148 was issued to the assessee on 22.3.2008 after recording reasons and obtaining approval of the CIT concerned. The appellant argued that the notice was served beyond the six-year period, but it was dispatched on time. The Tribunal held that the notice was issued and dispatched within the statutory time limit of six years from the end of the relevant assessment year. The notice was based on specific information regarding accommodation entries received by the Assessing Officer, justifying the reasonable belief for issuing the notice u/s 148. The Tribunal found no fault in the CIT (A) order dismissing the appeal on the issue of initiating proceedings u/s 148.
Addition of Rs. 9,00,000:
The appellant raised an additional ground challenging the addition of Rs. 9,00,000 confirmed by the CIT (A). The Tribunal admitted this ground for proper adjudication, emphasizing that denial of admission would amount to denial of justice. The CIT (A) had dismissed the appeal due to the lack of a confirmation letter from M/s. Chanakya Finvest Pvt. Ltd., for which the credit appeared in the assessee's books. The Tribunal directed the issue of the addition of Rs. 9,00,000 to be sent back to the Assessing Officer for fresh consideration after providing the assessee with adequate opportunity.
Conclusion:
After considering all arguments, the Tribunal partly allowed the appeal for statistical purposes, setting aside the issue of the addition of Rs. 9,00,000 for reassessment by the Assessing Officer. The order was pronounced on the 8th day of June 2009 after the conclusion of the hearing.
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