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• 2012 (6) TMI 935
  
  ISSUES PRESENTED and CONSIDERED

  The core legal questions considered in this judgment were:

  • Whether the petitioner, a Multi System Operator, was entitled to interim relief to prevent the disconnection of TV signals by the respondent, a broadcaster, pending the resolution of their dispute before the Telecom Disputes Settlement and Appellate Tribunal (TD SAT).
  • Whether the respondent's actions in disconnecting the signals were justified under the terms of the agreement and relevant telecommunications regulations.
  • Whether the petitioner was in default of payment and whether it had improperly extended its service area beyond the agreed terms.
  • Whether the court should interfere with the interim order of the TD SAT, which denied the petitioner's request for interim relief.

  ISSUE-WISE DETAILED ANALYSIS

  Relevant legal framework and precedents:

  The case involved the interpretation of the Telecom Regulatory Authority of India Act, 1997, and The Telecommunications (Broadcasting Cable and Interconnection) Regulation, 2004. The regulations require broadcasters to provide signals on non-discriminatory terms to distributors, including Multi System Operators, provided there is no default in payment. The case also referenced precedents from the Delhi High Court regarding the non-interference of High Courts in interim orders of specialized tribunals unless there is clear perversity or unreasonableness.

  Court's interpretation and reasoning:

  The Court examined whether the petitioner was entitled to interim relief based on the claim that the respondent unjustly denied signal provision. The Court noted that the TD SAT had already considered the factual matrix and determined that the petitioner was not entitled to interim relief due to default in payment and breach of the agreement's terms.

  Key evidence and findings:

  The petitioner had entered into agreements with the respondent, specifying areas of operation. The respondent alleged that the petitioner extended its service beyond the agreed areas and failed to pay outstanding dues. The TD SAT found that the petitioner had defaulted on payments and had improperly expanded its service area.

  Application of law to facts:

  The Court applied the relevant regulations, which allow broadcasters to deny service to distributors in default of payment. The Court found that the petitioner was in default and had breached the agreement by extending its service area, thus justifying the respondent's actions.

  Treatment of competing arguments:

  The petitioner argued that the regulations mandated non-discriminatory provision of signals and that the respondent's actions were monopolistic. The respondent countered that the petitioner was in breach of the agreement and in default of payment. The Court sided with the respondent, emphasizing the petitioner's default and breach of the agreement.

  Conclusions:

  The Court concluded that the petitioner was not entitled to interim relief and that the TD SAT's decision was justified. The petitioner's default in payment and breach of the agreement's terms were significant factors in this decision.

  SIGNIFICANT HOLDINGS

  The Court held that:

  • The petitioner, being in default of payment and having breached the agreement by extending its service area, was not entitled to interim relief.
  • The TD SAT's interim order was not suffering from perversity or unreasonableness, and therefore, the High Court would not interfere with it.
  • The Court reiterated the principle that High Courts should exercise restraint in interfering with interim orders of specialized tribunals unless there is clear evidence of error or injustice.

  Verbatim quote: "The Tribunal is invested with the power to adjudicate disputes, as an exclusive quasi-judicial body. It has gathered some institutional expertise; indeed its membership is also geared to facilitate the specialized dispute adjudication which it has to engage in. Judicial review, under Article 226, has to be understood within the overall structural parameters of its original dispute resolving task."

  The petition was dismissed, affirming the TD SAT's decision to deny interim relief to the petitioner. The Court emphasized the importance of adhering to contractual terms and the regulatory framework governing broadcaster-distributor relationships.

  ---

• 2012 (6) TMI 934
  
  The judgment revolves around the application of Section 313 of the Criminal Procedure Code, 1973 (Cr.PC) in a case concerning an offence under Section 138 of the Negotiable Instruments Act, 1881 (NI Act). The primary issue considered by the Karnataka High Court was whether the non-recording of the accused's statement under Section 313 of the Cr.PC vitiated the trial proceedings and the subsequent conviction.

  Issues Presented and Considered:

  The core legal question was whether the trial court's failure to examine the accused under Section 313 of the Cr.PC invalidated the conviction under Section 138 of the NI Act. The appellate court had previously allowed the appeal on this ground, leading to the present challenge.

  Issue-wise Detailed Analysis:

  Relevant Legal Framework and Precedents:

  Section 313 of the Cr.PC mandates that the accused be given an opportunity to explain any circumstances appearing in the evidence against them. The provision is intended to benefit the accused by allowing them to personally address the court regarding the prosecution's evidence. The provision also serves the court by aiding in reaching a fair conclusion. The court referenced several precedents, including the Supreme Court's decision in Basavaraj R Patil vs. State of Karnataka, which clarified that the accused's personal examination is crucial, particularly in non-summons cases.

  Court's Interpretation and Reasoning:

  The court emphasized that Section 313 aims to ensure fairness in the trial by allowing the accused to explain the evidence against them. However, it noted that in summons cases, the court has the discretion to dispense with the accused's personal examination if their attendance has been waived. The court also highlighted that the provision is not to be used to unjustly benefit the accused, especially when they have deliberately avoided legal proceedings.

  Key Evidence and Findings:

  The accused had been convicted by the trial court for an offence under Section 138 of the NI Act, but the appellate court set aside the conviction due to non-compliance with Section 313 of the Cr.PC. The accused had repeatedly avoided court proceedings and failed to appear for examination, demonstrating a pattern of evading the judicial process.

  Application of Law to Facts:

  The court applied the principles established in precedents to the facts of the case, determining that the accused's conduct in avoiding the proceedings negated any claim of prejudice due to the non-recording of his statement under Section 313. The court found that the accused had ample opportunity to present his case but chose not to do so.

  Treatment of Competing Arguments:

  The court acknowledged the appellate court's concern regarding the non-compliance with Section 313 but concluded that the accused's deliberate avoidance of proceedings undermined any argument of prejudice. The court noted that the appellate court's decision overlooked the accused's conduct and mechanically applied the law without considering the broader context.

  Significant Holdings:

  The court held that the non-recording of the accused's statement under Section 313 did not result in a miscarriage of justice, given the accused's conduct. The court affirmed the trial court's judgment, emphasizing that the accused's failure to engage with the judicial process did not warrant setting aside the conviction.

  Core Principles Established:

  The judgment reinforced the principle that Section 313 of the Cr.PC is primarily intended to benefit the accused and ensure a fair trial. However, it also clarified that the provision should not be exploited by an accused who deliberately avoids court proceedings. The court underscored the importance of examining the accused personally, but also recognized exceptions in summons cases where the accused's attendance has been waived.

  Final Determinations on Each Issue:

  The court determined that the appellate court erred in setting aside the conviction based solely on the non-recording of the accused's statement under Section 313. It concluded that no injustice had occurred, as the accused had been given multiple opportunities to participate in the proceedings but chose not to avail himself of them. Consequently, the court allowed the petition and affirmed the trial court's judgment.

  ---

• 2012 (6) TMI 933
  

  1. ISSUES PRESENTED and CONSIDERED

  The core legal issue in this judgment is whether a Hindu Undivided Family (HUF) can be considered a "company" under Section 141 of the Negotiable Instruments Act, thereby making its members vicariously liable for offenses committed by the "Kartha" (head) of the HUF under Section 138 of the Act.

  2. ISSUE-WISE DETAILED ANALYSIS

  Relevant legal framework and precedents:

  The primary legal provisions involved are Section 138 and Section 141 of the Negotiable Instruments Act. Section 138 deals with the dishonor of cheques due to insufficient funds, while Section 141 extends liability to companies and their responsible officers. The term "company" is defined to include any "body corporate" or "association of individuals." The General Clauses Act defines "person" to include any company or association or body of individuals, whether incorporated or not.

  Precedents considered include the Supreme Court judgments in Standard Chartered Bank v. Directorate of Enforcement, ITO v. Ram Prasad, and Ramanlal Bhailal Patel v. State of Gujarat, which discuss the definition of "person" and "association of individuals" in different contexts.

  Court's interpretation and reasoning:

  The court analyzed whether a HUF could be classified as an "association of individuals" under Section 141 of the Act. It emphasized that the term "association of individuals" implies a group of persons who have come together by their own volition with a common purpose, which is not the case for a HUF. The court noted that members of a HUF do not become co-owners by their own volition, nor do they have a common purpose.

  Key evidence and findings:

  The court relied on the inclusive definition of "person" in the General Clauses Act and the specific exclusion of HUFs from the definition of "company" in the Negotiable Instruments Act. It also considered the absence of explicit legislative intent to include HUFs as companies under the Act, unlike other statutes like the Income Tax Act.

  Application of law to facts:

  The court applied the legal principles to the facts, concluding that a HUF does not fit the definition of a "company" or "association of individuals" under Section 141. Consequently, the petitioner, as a member of the HUF, could not be held vicariously liable for the offense committed by the Kartha of the HUF.

  Treatment of competing arguments:

  The court considered and rejected the arguments presented by the respondent, which relied on judgments from the Andhra Pradesh and Bombay High Courts that supported the inclusion of HUFs as companies under the Act. The court found these judgments unpersuasive and inconsistent with the Supreme Court's interpretation.

  Conclusions:

  The court concluded that a HUF is not an "association of individuals" under Section 141 of the Negotiable Instruments Act, and thus, its members cannot be held vicariously liable for offenses under Section 138 committed by the Kartha.

  3. SIGNIFICANT HOLDINGS

  Preserve verbatim quotes of crucial legal reasoning:

  "A HUF will not constitute an 'Association of Individuals' as per the term 'company' explained in Section 141 of the Act."

  Core principles established:

  The judgment establishes that a HUF, being a distinct legal entity, cannot be equated to an "association of individuals" under Section 141 of the Negotiable Instruments Act. Members of a HUF cannot be held vicariously liable for offenses committed by the Kartha under Section 138.

  Final determinations on each issue:

  The court quashed the prosecutions against the petitioner, a member of the HUF, as they could not be deemed vicariously liable under Section 141 for the dishonor of cheques issued by the Kartha. The trial was allowed to proceed against the first accused, the Kartha of the HUF.

  ---

• 2012 (6) TMI 932
  

  1. ISSUES PRESENTED and CONSIDERED

  The judgment of the Bombay High Court primarily revolves around two core legal questions:

  (a) Whether the Metropolitan Magistrate's Court in Mumbai had jurisdiction to entertain the criminal proceedings initiated by the respondent against the petitioners.

  (b) Whether the complaint filed against the petitioners lacked specific averments necessary to establish their involvement in the alleged offences of cheating and conspiracy.

  2. ISSUE-WISE DETAILED ANALYSIS

  Issue (a): Jurisdiction of the Metropolitan Magistrate's Court

  • Relevant Legal Framework and Precedents: The question of jurisdiction is addressed by examining the geographical location where the alleged criminal activities took place. The court considered the factual matrix to determine if the Mumbai court was the appropriate forum for the proceedings.
  • Court's Interpretation and Reasoning: The court observed that the major transaction between the complainant and the accused occurred in Mumbai. Despite the complainant residing in Rajkot and some accused residing in Kolkata, the court emphasized the significance of the location where the alleged conspiracy and fraudulent activities transpired.
  • Key Evidence and Findings: The court noted that the complainant initially approached the Rajkot police but was directed to file the complaint in Mumbai, where crucial parts of the alleged criminal conduct occurred, including activities under the jurisdiction of SEBI in Mumbai.
  • Application of Law to Facts: The court applied the principle that jurisdiction is determined by the location where the substantial part of the alleged illegal activity took place. Given the involvement of SEBI and the documentation in Mumbai, the court found that the Mumbai court had jurisdiction.
  • Treatment of Competing Arguments: The petitioners argued that the Mumbai court lacked jurisdiction, but the court rejected this argument based on the factual circumstances and the location of the alleged offences.
  • Conclusions: The court concluded that the objection regarding jurisdiction was without merit and rejected the petitioners' claim on this ground.

  Issue (b): Specific Averments Against Petitioners

  • Relevant Legal Framework and Precedents: The court referred to precedents regarding the sufficiency of allegations in a complaint, particularly when invoking powers under Section 482 of the Cr.P.C. and Article 226 of the Constitution.
  • Court's Interpretation and Reasoning: The court emphasized that at the stage of filing a complaint, it is not necessary to detail every aspect of the accused's involvement in the alleged crime. The court cited precedents that caution against quashing complaints based on perceived insufficiency of detail at the preliminary stage.
  • Key Evidence and Findings: The court examined specific paragraphs of the complaint that mentioned the petitioners as co-conspirators. The court found that these allegations, though not detailed, were sufficient to warrant proceedings at the initial stage.
  • Application of Law to Facts: The court applied the principle that a complaint need not be dismissed merely because it lacks exhaustive details, especially when the allegations point to a prima facie case of conspiracy and cheating.
  • Treatment of Competing Arguments: The petitioners argued that the complaint was vague and lacked specific allegations against them. The court countered this by highlighting the allegations in the complaint and the legal standards for quashing proceedings.
  • Conclusions: The court concluded that the complaint contained sufficient allegations to proceed and dismissed the petitioners' argument for quashing the complaint on this basis.

  3. SIGNIFICANT HOLDINGS

  • Preserve Verbatim Quotes of Crucial Legal Reasoning: The court noted, "Roving inquiry as to pros and cons of the merits of the case is not necessary while exercising the jurisdiction under Article 226 of the Constitution of India and under Section 482 of the Code."
  • Core Principles Established: The judgment reinforced the principle that jurisdiction is determined by the location of substantial illegal activity and that detailed allegations are not necessary at the complaint filing stage if a prima facie case is presented.
  • Final Determinations on Each Issue: The court dismissed the writ petition, upholding the jurisdiction of the Mumbai Metropolitan Magistrate's Court and finding the complaint sufficiently detailed to proceed against the petitioners.

  ---

• 2012 (6) TMI 931
  
  Issues:
  Challenge of SEBI circular power
  
  Analysis:
  The petitioners sought various reliefs, including the quashing of a circular issued by the Securities and Exchange Board of India (SEBI) on the grounds that SEBI lacked the authority to issue such a notification. The respondents countered the petition, citing a decision by the Delhi High Court in a similar matter. The Delhi High Court, in its judgment, emphasized the importance of transparency for investors and the role of SEBI as an expert body regulating the market. The court highlighted that SEBI's circular aimed to ensure openness by requiring distributors to disclose commissions from mutual funds to investors, thus enabling informed decision-making and avoiding conflicts of interest. The judgment referenced the Supreme Court's ruling in R.K. Garg Vs. Union of India and Ors. (1981) 4 SCC 675, which stressed the need for judicial deference to legislative judgment in economic matters. The court acknowledged the complexity of economic regulation and the challenges faced by legislators in addressing such issues. It emphasized that economic legislation is often experimental and may contain imperfections, but such factors alone cannot render it invalid. The court concluded that unless there is a clear violation of constitutional principles, judicial interference in economic regulations should be minimal. Consequently, the writ petition challenging the SEBI circular was dismissed, aligning with the principles outlined in the Delhi High Court's decision.
  
  This judgment underscores the judiciary's approach to economic legislation, emphasizing the need for courts to exercise restraint and deference to legislative decisions in matters concerning economic regulation. It highlights the pragmatic nature of economic laws, acknowledging the complexities and uncertainties inherent in such regulations. The judgment reaffirms that legislative bodies have the primary responsibility in economic matters, and the courts should not readily invalidate economic legislation unless there is a clear constitutional violation. The reference to judicial deference and the importance of allowing room for experimentation and adjustment in economic laws reflects a broader judicial philosophy aimed at promoting stability and effectiveness in economic governance.

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• 2012 (6) TMI 930
  
  Issues:
  Challenge to order passed by the Appellate Authority under the Payment of Gratuity Act, 1972 regarding eligibility for gratuity based on continuous service.
  
  Analysis:
  The petitioner, an employer, challenged the order passed by the Appellate Authority under the Payment of Gratuity Act, 1972, contending that the workman was not entitled to gratuity for the entire service period due to unauthorized absence. The employer argued that gratuity is for service rendered, and unauthorized absence should not be considered. However, the Appellate Authority, relying on Section 2A of the Act, concluded that unless there is a specific order declaring a break in service for unauthorized absence, the said period cannot be excluded from continuous service for gratuity calculation.
  
  The respondent workman, on the other hand, argued that Section 2A of the Act does not allow exclusion of periods of absence, even if unauthorized, when the fact of employment is not in question. The respondent contended that the plain reading of Section 2A supports the Appellate Authority's decision in favor of the workman.
  
  Upon examining Section 2A of the Act, the Court found that it addresses situations where employment is not considered terminated, even during periods of unauthorized absence. The provision states that unless there is an order declaring absence as a break in service, the employment relationship is deemed continuous. Therefore, the Court held that the Appellate Authority's decision was not perverse and did not warrant interference under Article 226 or 227 of the Constitution. The Court emphasized that the fact of employment from 19.02.1974 to 28.01.2002 was undisputed, and even if the workman had unauthorized absences, the continuous employment relationship persisted unless expressly declared otherwise. Consequently, the petition challenging the Appellate Authority's order was dismissed, ruling in favor of the workman.

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• 2012 (6) TMI 929
  
  Issues Involved:
  1. Quashing of the FIR under Sections 4 and 5 of the Bombay Prevention of Gambling Act, 1887.
  2. Allegation of false implication by Respondent Nos. 5 to 8.
  3. Compensation for illegal detention and harassment.
  4. Departmental inquiry against Respondent Nos. 5 to 8 for misconduct.
  
  Issue-wise Detailed Analysis:
  
  1. Quashing of the FIR under Sections 4 and 5 of the Bombay Prevention of Gambling Act, 1887:
  
  The Petitioners sought to quash the FIR registered against them, arguing that they were playing games of skill, namely Bridge and Rummy, which are excluded from the purview of the Gambling Act. The Court examined the definitions of "gaming," "instruments of gaming," and "common gaming-house" under the Act. The Court noted that the FIR did not provide evidence that the Andheri Gymkhana was a common gaming house or that the Petitioners were engaged in gambling. The Court cited precedents, including the Supreme Court's ruling in State of Andhra Pradesh vs. K. Satyanarayana, which held that Rummy is a game of skill and not gambling. The Court found no material indicating that the club was making a profit from the games, and therefore, the FIR did not disclose an offense under Sections 4 and 5 of the Gambling Act. Consequently, the complaint was quashed.
  
  2. Allegation of false implication by Respondent Nos. 5 to 8:
  
  The Petitioners alleged that they were falsely implicated by Respondent Nos. 5 to 8, who conducted the raid without proper evidence and detained them illegally. The Court observed that the police acted on the presumption that a gambling license was required, which is incorrect as there is no provision for such a license under the Gambling Act. The Court also noted that the police did not follow proper procedures, such as obtaining permission from a Magistrate for detaining women after sunset. However, the Court did not find sufficient evidence of malafide intention or misconduct by the Respondents and did not direct any departmental inquiry against them.
  
  3. Compensation for illegal detention and harassment:
  
  The Petitioners claimed that they were detained illegally, not allowed to contact their families, and denied basic amenities such as medication and toilet facilities. The Court found that the police acted in a high-handed manner and violated the Petitioners' fundamental rights under Article 21 of the Constitution. The Court noted that the police did not follow the procedure laid down under Section 46(4) of the Criminal Procedure Code, which prohibits the arrest of women after sunset without prior permission from a Magistrate. The Court directed the State Government to pay compensation of Rs 1,000/- to each Petitioner and Rs 25,000/- each to the two women Petitioners for the illegal detention and harassment.
  
  4. Departmental inquiry against Respondent Nos. 5 to 8 for misconduct:
  
  While the Petitioners sought a departmental inquiry against Respondent Nos. 5 to 8 for their alleged misconduct during the raid, the Court did not find sufficient evidence to establish malafide intentions on the part of the Respondents. The Court observed that the actions of the police appeared to be bonafide, albeit misguided, and therefore did not direct any disciplinary action against them. However, the Court emphasized the need for the police to exercise caution and follow proper procedures in future raids to avoid harassment of innocent citizens.
  
  Conclusion:
  
  The Court quashed the FIR against the Petitioners, directed the State Government to pay compensation for illegal detention, and highlighted the need for police to follow proper procedures in future raids. The Court did not find sufficient evidence to direct a departmental inquiry against the Respondents.

  ---

• 2012 (6) TMI 928
  
  Issues Involved:
  1. Whether the impugned order is liable to be set aside.
  2. Whether the learned Special Judge granted bail on totally irrelevant considerations.
  3. Whether the respondent threatened any witnesses and hampered the investigation.
  4. Whether considering the gravity and nature of the offence and prima facie case against the respondent, bail can be cancelled by this Court or whether CBI has to approach the learned Special Judge for cancellation of bail.
  
  Summary:
  
  Issue 1: Whether the impugned order is liable to be set aside.
  The CBI challenged the order of the Special Judge granting bail to the respondent, alleging that the order was based on irrelevant considerations and that the investigation was still ongoing. The High Court noted that while the Special Judge's observations might not be entirely accurate, they were not wholly irrelevant. Therefore, the bail granted to the respondent could not be cancelled on this ground alone.
  
  Issue 2: Whether the learned Special Judge granted bail on totally irrelevant considerations.
  The High Court observed that the Special Judge considered the fact that other accused were not arrested and the investigation had reached a conclusion. The Court noted that the Special Judge should not have relied on the non-arrest of other accused as a ground for granting bail, as previously observed by the High Court. However, the Court concluded that these considerations were not entirely irrelevant.
  
  Issue 3: Whether the respondent threatened any witnesses and hampered the investigation.
  The High Court found no material evidence to substantiate the CBI's claim that the respondent tampered with evidence or influenced witnesses. The Court emphasized that mere allegations without evidence are insufficient to cancel bail. The Court also noted that the respondent had cooperated with the CBI and there was no allegation that he tried to flee from justice.
  
  Issue 4: Whether considering the gravity and nature of the offence and prima facie case against the respondent, bail can be cancelled by this Court or whether CBI has to approach the learned Special Judge for cancellation of bail.
  The High Court refrained from making any observations regarding the gravity and nature of the offences or the prima facie case against the respondent, as it is for the Special Court to consider these aspects if the CBI seeks cancellation of bail. The Court provided directions for the CBI to summon the respondent for investigation purposes and allowed the CBI to approach the Special Court for cancellation of bail if the respondent influences witnesses or tampers with evidence.
  
  Conclusion:
  The High Court dismissed the Criminal Petition, upholding the bail granted to the respondent with specific conditions and directions for the CBI to follow during the ongoing investigation. The Court emphasized the importance of evidence and material to substantiate claims of tampering and influencing witnesses.

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• 2012 (6) TMI 927
  
  Issues involved:
  The legal issue raised is the absence of notice u/s 143(2) of the Income Tax Act during the reassessment proceedings u/s 147 r.w.s. 148.
  
  Comprehensive details:
  The appeal arose from the order of CIT(A)-XIV, Kolkata for A.Y 2005-06, framed by the Income Tax Officer u/s 144 r.w.s. 147 of the IT Act 1961. The issue stemmed from the failure to issue notice u/s 143(2) of the Act within 12 months from the date of filing the return of income in response to the notice u/s 148. The AO contended that no notice u/s 143(2) was required as no return was filed in response to the notice u/s 148. However, the assessee requested the AO to treat the original return as filed in compliance with the notice u/s 148. The AO proceeded with the assessment based on the revised computation filed by the assessee, condoning the delay in filing the return. The AO's actions were challenged, citing precedents emphasizing the mandatory nature of issuing notice u/s 143(2) for framing assessments. The Hon'ble Courts' decisions highlighted the importance of adhering to the statutory provisions regarding notice u/s 143(2) and the consequences of non-compliance.
  
  Judgment:
  The Tribunal held that the reassessment conducted without issuing notice u/s 143(2) was without jurisdiction and hence quashed. The decision was based on the legal requirement of issuing notice u/s 143(2) during reassessment proceedings, as established by legal precedents. As the jurisdictional issue was resolved, further consideration of other jurisdictional matters and the case's merits was deemed unnecessary. Consequently, the appeal of the assessee was allowed, and the assessment was set aside.

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• 2012 (6) TMI 926
  
  Issues involved: Violation of principles of natural justice in passing the impugned order.
  
  The appellant filed an appeal against the impugned order passed by the Commissioner (Appeals) upholding the rejection of the refund claim. The impugned order was passed following a remand order by the Tribunal. The appellant contended that the order violated the principles of natural justice as only one opportunity of hearing was granted, and their request for adjournment was not considered by the Commissioner (Appeals). Despite the appellant's written request for adjournment, the Commissioner (Appeals) proceeded with the order, stating that sufficient opportunity was given. The Tribunal found merit in the appellant's argument, setting aside the impugned order and remanding the matter for a fresh decision by the Commissioner (Appeals) in accordance with the earlier remand order. The appeal was disposed of by way of remand.

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• 2012 (6) TMI 925
  
  The Delhi High Court dismissed the appeal with permission for the appellant to approach the Tribunal and take further steps according to the law. (Citation: 2012 (6) TMI 925 - DELHI HIGH COURT)

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• 2012 (6) TMI 924
  
  Issues involved: Extension of stay of demand u/s 234B, 234C, and 234D for assessment year 2006-2007.
  
  Summary:
  The Appellate Tribunal ITAT Mumbai considered the stay application seeking extension of demand already stayed by the tribunal for a significant amount inclusive of interest u/s 234B, 234C, and 234D for the assessment year 2006-2007 until the final disposal of the appeal. The original order granted stay subject to a deposit, which was complied with. Due to a member's transfer, the case was to be fixed afresh, with no fault attributed to the assessee for any adjournments. The Tribunal referred to a Special bench decision and a High Court judgment, stating that if delay in appeal disposal is not the assessee's fault, the tribunal can extend the stay beyond 365 days post an amendment. Considering the factual position and the assessee's compliance, the extension of stay was granted until appeal disposal or for a further 180 days, with a condition against seeking adjournments without just cause. The stay application was allowed, with the order pronounced in open court on June 8, 2012.

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• 2012 (6) TMI 923
  
  The Gujarat High Court heard a case regarding central excise and sales tax receipts granted as incentives by the State Government. The court admitted the case and framed a question of law on whether these receipts are capital receipts not chargeable to tax. Notice was issued to the respondents, and a Paper Book was to be submitted within three months.

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• 2012 (6) TMI 922
  
  Issues Involved:
  1. Validity of the coercive action by the respondent Bank.
  2. Knowledge and implications of existing encumbrances on the property.
  3. Applicability of Section 100 of the Transfer of Property Act, 1882.
  4. Liability for outstanding commercial tax dues.
  
  Summary:
  
  1. Validity of the coercive action by the respondent Bank:
  The petitioner, a registered Private Limited Company, purchased plots and machinery for Rs.1.30 crores and deposited Rs.60 lakhs. The petitioner raised a grievance against the respondent Bank's coercive action, which threatened forfeiture of the deposited amount if the remaining amount was not paid by the deadline set in the letter dated 9.8.2007.
  
  2. Knowledge and implications of existing encumbrances on the property:
  The property in question belonged to Bhopal Transmission Control, which defaulted on a loan, leading the Bank to declare the account as N.P.A and take possession u/s 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The property was charged with outstanding commercial tax dues amounting to Rs.1,43,15,655/-. The petitioner was aware of these liabilities during private negotiations with the Bank.
  
  3. Applicability of Section 100 of the Transfer of Property Act, 1882:
  The petitioner argued that the charge of the Commercial Tax Department was not binding on them u/s 100 of the Transfer of Property Act, 1882. However, the court found that the petitioner had constructive knowledge of the encumbrances before entering into the private treaty. The auction notice did not culminate in an accepted bid, and the transaction was through private negotiation, making Section 100 inapplicable.
  
  4. Liability for outstanding commercial tax dues:
  Section 530 of the Vanijyik Kar Adhiniyam, 1994, and Section 33 of the VAT Act, 2002, stipulate that tax dues are a first charge on the property. The petitioner, having agreed to take over the assets and liabilities, was liable for the outstanding commercial tax dues. The court noted that the petitioner had expressed willingness to take over the company and its liabilities, including statutory taxes, in various correspondences.
  
  Conclusion:
  The petition was dismissed, and the petitioner was not granted any relief. The petitioner and the respondent Bank were given the liberty to avail remedies u/s 33 (2) of the VAT Act, 2002. The Commercial Tax Department was allowed to proceed with the auction to realize their dues.

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• 2012 (6) TMI 921
  
  Issues involved: Appeal by revenue against order of Commissioner of Income-tax (Appeals) regarding undisclosed loan for house construction and estimated addition for cost of construction.
  
  Regarding undisclosed loan for house construction: The revenue contended that the loan taken by the assessee was not disclosed in the balance sheet, supporting the Assessing Officer's decision. However, the assessee presented the balance sheet showing the loan under 'Term Loan'. The Tribunal found that the loan amount was indeed reflected in the balance sheet, hence upheld the decision of the Commissioner of Income-tax (Appeals) to delete the addition.
  
  Regarding estimated addition for cost of construction: The Assessing Officer made an estimated addition based on the variance between the departmental valuation officer's cost of construction and the assessee's disclosure. The assessee argued that since their books of account were not rejected, no addition on an estimated basis should be made. Citing the case of Sargam Talkies, the Tribunal agreed that without rejection of the books of account, no such addition should be made. As the books of account regarding the cost of construction were not rejected, the Tribunal deleted the sustained addition of Rs. 1 lakh. Additionally, the Tribunal noted that the difference in cost of construction was within a 10% margin, which could be attributed to self-supervision, further supporting the deletion of the addition.
  
  Result: The appeal by the revenue was dismissed, and the cross objection of the assessee was allowed.

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• 2012 (6) TMI 920
  
  Issues involved: Justification of directing the assessee to make predeposit for entertaining the appeal against the order-in-original dated 30th September 2009.
  
  Summary:
  1. The High Court considered whether the CESTAT was justified in directing the assessee to make a predeposit of Rs.1.5 crores for entertaining the appeal against the order-in-original dated 30th September 2009.
  
  2. The duty amounting to Rs.33.64 crores was confirmed based on the audit report, where the assessee had imported consumables valued at Rs.1,21,73,788 in addition to imports valued at Rs.5.69 crores. The CESTAT directed the assessee to make a predeposit of Rs.1.5 crores, leading to the present appeal being filed.
  
  3. The appellant argued that the Commissioner of Central Excise, Thane - I had stated in a letter that the objections raised by the audit party were erroneous. Even though this letter was presented to the CESTAT, it was not considered due to the demand being confirmed after the letter was issued.
  
  4. The High Court opined that if the Commissioner's representation to the CBEC regarding the audit party's objections being erroneous was not proven to be false, the demands confirmed based on the audit report could not be upheld. Therefore, it was deemed appropriate to hear the appeal before CESTAT without requiring any predeposit.
  
  5. Consequently, the High Court quashed the impugned order passed by the CESTAT and directed the CESTAT to hear the appeal on merits without insisting on any predeposit. The CESTAT was instructed to make its decision without being influenced by the High Court's observations. The appeal was disposed of with no order as to costs.

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• 2012 (6) TMI 919
  
  Issues Involved:
  1. Whether composition of the case can be allowed after disposal of the revision petition.
  2. Proper procedure for recording payment of compensation and fine.
  3. Correctness of the decision in Beena v. Balakrishnan Nair (2010 (2) KLT 1017).
  
  Summary:
  
  Issue 1: Composition of the Case Post-Revision
  The court examined whether the composition of the case could be allowed after the disposal of the revision petition. It was held that composition cannot be allowed post-revision as per the decision in Beena v. Balakrishnan Nair (2010 (2) KLT 1017). The court reiterated that after the final decision in revision, composition is not permissible even u/s 482 of the Code of Criminal Procedure.
  
  Issue 2: Procedure for Recording Payment of Compensation and Fine
  The court discussed the proper procedure for recording the payment of compensation and fine. It was noted that R. 191 of Criminal Rules of Practice mandates maintaining a fine register in Form No. 20. The court emphasized that every fine imposed must be recorded in the register and initialed by the Judge or Magistrate. The court found that if the procedure in Beena's case is followed in every case, it may lead to further judicial inquiries and potential disputes, resulting in waste of judicial time. Therefore, the court clarified that if the complainant admits receipt of compensation or the accused establishes that compensation was paid directly to the complainant, there is no impediment in recording that fact.
  
  Issue 3: Correctness of the Decision in Beena v. Balakrishnan Nair
  The court addressed the correctness of the decision in Beena's case. It was found that the decision in Beena's case was based on the peculiar facts and circumstances of that case. The court held that there was no general direction in Beena's case, and the direction to the Magistrate was specific to the facts of that case. The court concluded that there was no error or defect in the directions given in Beena's case and upheld the decision.
  
  Conclusion:
  The court answered the references by clarifying the procedures for recording payment of compensation and fine, and upheld the decision in Beena v. Balakrishnan Nair, finding no need to reconsider or clarify it further.

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• 2012 (6) TMI 918
  
  Issues Involved:
  1. Whether the respondents have a right to retain government accommodation after retirement.
  2. The applicability of the Public Premises (Eviction of Unauthorized Occupants) Act.
  3. The constitutional right to shelter and its enforcement.
  4. The duty of the State to provide shelter to internally displaced persons (IDPs).
  
  Summary:
  
  Issue 1: Right to Retain Government Accommodation Post-Retirement
  The respondents, Kashmiri Pandits and former Central Government employees, were transferred to Delhi due to security threats in Kashmir. They were provided government accommodation in Delhi. Post-retirement, they sought to continue occupying these accommodations, arguing that the unsafe conditions in Kashmir prevented their return. The learned Single Judge allowed their writ petitions, quashing the eviction orders and directing the government to provide alternative accommodation.
  
  Issue 2: Applicability of the Public Premises (Eviction of Unauthorized Occupants) Act (PP Act)
  The Union of India argued that the respondents became unauthorized occupants post-retirement and were subject to eviction under the PP Act. The Estate Officer had followed due procedure in passing eviction orders, which were upheld by the appellate authority. However, the respondents challenged these orders, invoking their constitutional rights.
  
  Issue 3: Constitutional Right to Shelter
  The court recognized the respondents' right to shelter as part of their fundamental rights under Article 21 of the Constitution. The respondents' displacement due to violence in Kashmir and the government's failure to ensure their safe return necessitated the provision of alternative accommodation. The court emphasized the humanitarian aspect and the need for a justice-oriented approach.
  
  Issue 4: Duty of the State to Provide Shelter to IDPs
  The court referred to international conventions and guidelines on the rights of IDPs, highlighting the state's duty to provide adequate shelter. The respondents, as IDPs, were entitled to protection and assistance from the government. The court noted the lack of specific laws for IDPs in India but underscored the state's responsibility to ensure their basic human rights.
  
  Conclusion:
  The court dismissed the appeals, affirming the respondents' right to retain government accommodation until the government provides suitable alternative housing. The judgment stressed the exceptional circumstances and the need for a compassionate approach, directing the government to frame a rehabilitation scheme for such retired employees. The directions were specific to the case and not intended as general precedent.

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• 2012 (6) TMI 917
  
  Issues involved: Appeal by Revenue against CIT(A) order u/s 143(3) for 2007-08, involving disallowance of expenses and provident fund contribution.
  
  Disallowance of Employees' Provident Fund Contribution: The Assessing Officer disallowed deduction u/s 36(1)(va) for delay in payment of employees' provident fund contribution, which was paid before the return filing deadline. CIT(A) deleted the disallowance citing a Supreme Court decision, stating the amendment to Section 43B is retrospective from April 1, 1988, ensuring uniformity in payments. ITAT upheld CIT(A)'s decision based on the Supreme Court ruling.
  
  Disallowance of Travelling & Conveyance Expenses: The Assessing Officer disallowed Rs. 1.50 lakhs of claimed expenses without proper justification. CIT(A) found the disallowance arbitrary and lacking proper reasoning, hence deleted it. ITAT agreed with CIT(A)'s decision, noting the absence of cogent justification by the Assessing Officer.
  
  Disallowance of Building & Machinery Repair Expenses: A disallowance of Rs. 40,000 was made by the Assessing Officer without a valid reason. CIT(A) observed the disallowance was similar to the one on travelling expenses and lacked proper support, thus deleted it. ITAT concurred with CIT(A)'s decision, finding the disallowance unjustified and supporting the legitimate business expenditure.
  
  Conclusion: The ITAT dismissed the Revenue's appeal, upholding CIT(A)'s deletion of disallowances on provident fund contribution, travelling expenses, and repair expenses due to lack of proper justifications by the Assessing Officer. The decision was pronounced on June 8, 2012.

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• 2012 (6) TMI 916
  
  Issues involved: Addition u/s. 69 of the Income Tax Act, 1961 and denial of opportunity for cross-examination.
  
  Summary:
  
  Issue 1: Addition u/s. 69 of the Income Tax Act, 1961
  The appeal was against the CIT(A)-I, Nashik's order confirming the addition u/s. 69 amounting to Rs. 41,15,000. The assessee purchased agricultural land for Rs. 13,85,000 and it was revealed that additional cash of Rs. 41,15,000 was paid to the sellers. The AO made the addition as unexplained investment based on the seller's statement. The CIT(A) directed the AO to provide a copy of the statement for examination. The AO reiterated the addition, stating that Rs. 55,00,000 was received, with Rs. 13,85,000 by cheque and Rs. 41,15,000 in cash. The CIT(A) upheld the addition, leading to the appeal.
  
  Issue 2: Denial of opportunity for cross-examination
  The assessee contended that no opportunity for cross-examination of the seller was given by the AO. The matter was restored to the AO with a direction to verify the extra money received by the sellers and to allow the assessee to cross-examine the seller. The appeal was allowed for statistical purposes.
  
  The Tribunal found that the addition was based on the seller's statement without affording the assessee an opportunity for cross-examination. In the interest of justice, the matter was remanded to the AO for proper verification and cross-examination, allowing the assessee a fair chance to present their case. The appeal was allowed for statistical purposes.

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