High Court of Kerala

Qaboos T vs. State Of Kerala (Neutral Citation: 2024/KER/46798)

MANU/KE/2183/2024

27.06.2024

Criminal

Order of pre-arrest bail being an extra ordinary privilege, should be granted only in exceptional cases

Present applications are filed under Section 438 of the Code of Criminal Procedure, 1973, for orders of pre-arrest bail. The Petitioners are the accused 3 and 4 in case registered against them for allegedly committing the offences punishable under Sections 406 and 420 of the Indian Penal Code, 1860 and Section 66D of the Information Technology Act. The prosecution allegation against the accused is that they induced the de facto complainant to invest money on the assurance that they would pay him a profit. However, the accused did not pay the profit or return the money.

In Jai Prakash Singh v. State of Bihar and another, Supreme Court has held that, an order of pre-arrest bail being an extra ordinary privilege, should be granted only in exceptional cases. The judicial discretion conferred upon the Courts has to be properly exercised, after proper application of mind, to decide whether it is a fit case to grant an order of pre-arrest bail. The court has to be prima facie satisfied that the applicant has been falsely enroped in the crime and his liberty is being misused.

On of the facts, the rival submissions made across the Bar, and the materials placed on record, particularly on comprehending the nature, gravity, and seriousness of the economic offences alleged against the petitioners that the prima facie material to establish the petitioners involvement in the crimes, that the petitioners' custodial interrogation is necessary and the recovery is to be effected, present Court is not satisfied that, the Petitioners have made out any valid ground to invoke the discretionary jurisdiction of this Court under Section 438 of the Code of Criminal Procedure, 1973 (CrPC). Hence, present is not a fit case to grant the petitioners orders of pre- arrest bail. Applications are dismissed.

Tags : Pre-arrest bail Grant Discretion

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Customs, Excise and Service Tax Appellate Tribunal

Saash Enterprises vs. The Commissioner of Customs

MANU/CB/0141/2024

27.06.2024

Customs

Transaction value has to be accepted unless there are compelling reasons to reject the same

The Appellantfiled a Bill of Entry No.8730452 dated 11th December, 2012 for clearance of different items such as laminators, wire binding machines, paper cutters, etc., along with Bill of Lading, commercial invoice, packing list, certificate of origin and a document with the description of the goods imported. The consignment was examined and the inventory of items which was declared was found to be correct, however, the department doubted the value and engaged a Chartered Engineer to determine the correct value.

The Chartered Engineer estimated the value to be USD 69,021 as against the declared C & F value of USD 55,142.06. Investigations also revealed that there were different invoices for identical sets of items where the buyer and the seller were the same and each of the invoices had declared different values. Thus, based on the investigations and various statements, the original authority rejected the declared value in terms of Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, and refixed the value at Rs.46,43,362 as against declared value of Rs.30,96,158. The goods were held to be liable for confiscation in terms of Section 111(d) of the Customs Act, 1962 and an option was given to redeem the goods on payment of fine of Rs.5,00,000 and a penalty of Rs.2,00,000 was imposed on the appellant under Section 112(a) of the Customs Act 1962. This order was upheld by the Commissioner (Appeals) holding that the appellant had manipulated invoice and mis-declared the actual value.

Emails recovered during investigation showed multiple invoices for the same set of goods where the buyer and supplier were one and the same. But there was nothing on record to prove that the amount paid to the buyer was more the value declared in the commercial invoice filed by the appellant along with the Bill of Entry. The statements have been retracted and the cross-examination of the Chartered Engineer has been denied, which is against the principles of natural justice.

Section 14 of the Customs Act, 1962 clearly stipulates that the transaction value has to be accepted unless there are compelling reasons to reject the same. Moreover, any transaction value to be rejected has to be done as per the Customs Valuation Rules.

There was absolutely no methodology followed but randomly the total value is being redetermined, which appears to be absolutely against the Rule of Law. Moreover, the emails and the statements do not suggest that that any extra payment was made to the buyer by the appellant in excess of what has been declared in their commercial value; therefore, the question of enhancing the value based on some random emails and statements without any corroboration has no evidentiary value.Present Tribunal do not find any reason to uphold redetermination of the value. Therefore, the impugned order is set aside. Appeal allowed.

Tags : Valuation Confiscation Penalty

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High Court of Kerala

A.T Varghese vs.Appukuttan (Neutral Citation: 2024/KER/45864)

MANU/KE/2177/2024

26.06.2024

Criminal

Unless the findings are patently incorrect and against the evidence, an order of acquittal cannot be reversed

Present is an appeal against acquittal. The de facto complainant/victim is the Appellant. He expired and his legal heirs are the additional appellants. The Respondent was charged with an offence under Sections 328 and 392 of the Indian Penal Code, 1860 (IPC). After trial, he was acquitted by the Additional Sessions Judge. MO1 is a gold ingot. The trial court ordered to confiscate the same. Aggrieved by the orders of acquittal and confiscation, present appeal has been filed under Section 372 of the Code of Criminal Procedure, 1973 (CrPC).

The findings of the court below leading to the acquittal of the 1st Respondent cannot be said to be incorrect. Unless the findings are patently incorrect and against the evidence, an order of acquittal cannot be reversed.

The Apex Court held in Central Bureau of Investigation v. Shyam Bihari and others that, in an appeal against acquittal, the power of the appellate court to re-appreciate evidence and come to its own conclusion is not circumscribed by any limitation. But it is equally settled that the appellate court must not interfere with an order of acquittal merely because a contrary view is permissible, particularly, where the view taken by the trial court is a plausible view based on proper appreciation of evidence and is not vitiated by ignorance/misreading of relevant evidence on record. Hence, the order acquitting the 1st respondent is confirmed.

Sale of the gold ornaments by the 1st respondent in Apsara Jewellery stands established by the evidence of PWs.4 and 5 and also the recovery based on statement. Although the evidence of PWs.4 and 5 is not sufficient to establish the identity of the gold ornaments, their evidence before the court and their statement before the police certainly establish that the ornaments purchased from the 1st respondent belonged to PW2.

Although the gold could be recovered only as ingot, the evidence and materials proved that the same is the converted form of the ornaments stolen from the possession of PW2. Therefore, the order of the trial court to confiscate MO1 is incorrect. It is liable to be returned to PW2, who is the appellant. Since he is no more, additional appellant Nos.2 to 4, who are his legal heirs, are entitled to receive it back.

The acquittal of the 1st respondent is confirmed and MO1 is ordered to be returned additional Appellant Nos. 2 to 4 on production of a legal heirship certificate. Appeal disposed off.

Tags : Acquittal Evidence Legality

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Income Tax Appellate Tribunal

P P Pandurang Gramin Bigarsheti vs. Assessment Unit, Income Tax Department

MANU/IP/0141/2024

26.06.2024

Direct Taxation

Interest earned by the assessee is eligible for deduction under Section 80P(2)(a) of IT Act

Assessee is a Co-operative Credit Society engaged in the business of providing credit facilities to the members by accepting deposits from members. Assessee e- filed Return of Income claiming deduction under Section 80P(2)(a)(i) of Income Tax Act, 1961 (IT Act). The assessee's case was selected for scrutiny. Assessing Officer(AO) passed assessment order under Section 143(3) of IT Act . In the assessment order, assessee's claim for deduction under Section 80P(2)(a) was rejected.

The AO added the amount of Rs.41,65,336 treating as Income from Other Sources which is not eligible for deduction under Section 80P(2)(a)(i) of the Act. Therefore, the AO held that assessee is not eligible for deduction under Section 80P(2)(a)(i) of the Act. Aggrieved by the assessment order, assessee filed appeal before the learned CIT(A). Learned CIT(A) upheld the assessment order.

The assessee is a Credit Co-operative Societyregistered under Maharashtra Co-operative Societies Act. The prime function of the society is accepting deposits and advancing loans to the members. During the A.Y.2020-21, the assessee has earned an interest income of Rs.41,65,336 from investments with various co-operative banks/banks

The assessee had claimed deduction under Section 80P(2) for the interest earned from various Co-operative Banks / Nationalized / Scheduled Banks. In this case, the AO has ignored most important submission of the assessee that the Assessee is a Co-Operative Society registered under Maharashtra State Co-Operative Society Act and it is under the control of Registrar of Co-Operative Society Maharashtra State. The Assessee also submitted that there were no member who wanted to avail loan from society and surplus funds were invested to earn interest and such interest income is linked to business of the assessee and hence it is part of the Profit which is eligible for deduction under Section 80P(2)(a)(i) of the Act.

The Hon'ble ITAT Pune Bench in the case of Yashwant Nagari Sahakari Patsanstha Maryadit Vs. ITO in held that the assessee was eligible for deduction under Section 80P(2)(a ) of the Act on the Interest earned by assessee.In view of the decision of the High Court and ITAT, Pune, it is held that the Interest earned by the assessee is eligible for deduction u/sec.80P(2)(a) of the Act. Appeal of the assessee is allowed.

Tags : Assessment Deduction Eligibility

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Customs, Excise and Service Tax Appellate Tribunal

Faxtel Systems (India)Pvt Ltd vs. The Principal Commissioner Customs

MANU/CB/0139/2024

25.06.2024

Customs

In absence of any allegation of fraud or collusion, CA certificate is sufficient to grant the refund claim

Issue in the present appeal is regarding refund of Special Additional Duty paid on import of goods. The Appellant had re-imported goods and it was cleared on payment of customs duty and 4% SAD as per Notification No. 102/207 dated 14.09.2007. Thereafter goods were sold and on payment of VAT, appellant submitted refund claim for refund of 4% SAD.

However, the refund application was rejected on the ground that the CA certificate has not stated as how the unjust enrichment was not applicable. Aggrieved by said order, an appeal was filed before Commissioner (Appeals) and considering the issue, the Commissioner (Appeals) remanded the matter to adjudication authority with a direction to the appellant to submit explanation from their CA as to how they arrive at the conclusion that the duty amount was not passed on to the customers. Thereafter adjudication authority considered the issue and even after submitting detailed explanation by the statutory auditor, the adjudication authority allowed refund partially.

The limited issue in the present appeal is regarding the defect related to refund claim submitted by the Appellant. It is the admitted fact, that appellant had paid 4% SAD at the time of import and the Appellant had also paid VAT as Customs Appeal No. 20817 of 2014 applicable while selling the goods. The Appellant also complied with the condition No. 2(b) in the Notification No. 102/2007 where it is stated that "the importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of Section 3 of the Customs Tariff Act, 1975 shall be admissible.

It is an admitted fact that the amount paid by the appellant as 4% SAD is not passed on to the buyers and the said aspect was confirmed by the statutory auditor of the appellant while issuing certificate. As regarding the objections made by lower authority, issue is squarely covered by the decisions of the Tribunal relied by the appellant, it is settled that once CA certificate is produced and in the absence of any allegation of fraud or collusion, such certificate is sufficient to grant the refund claim. Refund should not be denied merely on technical violations.

Impugned order rejecting the refund claim is not sustainable. Therefore, impugned order is set aside. Appeal allowed.

Tags : Refund Denial Legality

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High Court of Bombay

Jaya and Ors. Vs. Sopan and Ors. (Neutral Citation: 2024:BHC-NAG:6437)

MANU/MH/3742/2024

24.06.2024

Motor Vehicles

If there is a fundamental breach of policy, Insurance Company has to pay compensation amount to claimants and thereafter, can recover the same from the owner of the vehicle

The claim petition was preferred under Section 166 of the Motor Vehicles Act, 1988 by the Appellants being dependants of the deceased and have claimed compensation for accidental death. The Tribunal by the impugned judgment and award partly allowed the petition directing respondent No. 1, the owner of vehicle, to pay Rs. 10,29,000 to the Appellants including the 'no fault liability' as compensation along with interest at the rate of 8% per annum from the date of the claim petition till its full realization.

The Tribunal absolved Respondent No. 2-Insurer and dismissed the petition against it. Feeling aggrieved with the dismissal of claim petition against the Insurer as well as on the premise of awarding lesser compensation, the Appellants have filed the present appeal.

Perusal of the impugned order goes to show that the driving licence produced by respondent No. 1 is issued to him on 9th November, 2015, whereas the date of accident is 18th June, 2015. Therefore, the Tribunal was right in holding that, Respondent No. 1 was not holding a valid driving licence at the time of accident.

If there is a fundamental breach of the policy, the Insurance Company has to pay the compensation amount awarded to the claimants and thereafter recover the same from the owner of the vehicle in question. Therefore, in the wake of this legal position, dismissal of the claim of the appellants against the Insurer by the Tribunal is not correct. Therefore, at the first instance, Respondent No. 2 has to pay the compensation amount to the Appellants and thereafter Respondent No. 2 may recover the same from respondent No. 1.

The deceased was below the age of 40 years and was self-employed, and, therefore, addition of 40% of the established income should be added in view of the decision of the Supreme Court in the case of National Insurance Co. Ltd. vs. Pranay Sethi and others.

With regard toloss of consortium, the Tribunal has granted amount of Rs. 1,25,000 towards damages for severance, suffering and trauma, love and affection as a consequence of the death. In the decision of the Pranay Sethi, the Supreme Court has held that, spouse shall be entitled at the rate of Rs. 40,000 towards loss of consortium. The Supreme Court has also fixed the figure towards the funeral expenses and loss of estate at Rs. 15,000 each. The amount fixed under the above heads are subject to enhancement at the rate of 10% after every three years from the year 2017 onwards.In view of the law enunciated by the Supreme Court, Appellant No. 1, appellant Nos. 2 to 4 and appellant No. 5 would be entitled to Spousal Consortium, Filial consortium and Parental Consortium, respectively at the rate of Rs. 40,000 each.

The award passed by the impugned order is modified. Respondent Nos. 1 and 2 are jointly and severally liable to pay Rs. 14,39,600 to the claimants including 'no fault liability' as a compensation under Section 166 of the Act with interest at the rate of 9% per annum from the date of claim petition till its realization.After the compensation is paid to the appellants, respondent No. 2 is entitled to recover the compensation from respondent No. 1.Appeal is partly allowed

Tags : Accidental death Compensation Enhancement

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High Court of Delhi

The National Sewing Thread Company Limited vs. Deputy Commissioner Of Income Tax &Ors. (Neutral Citation: 2023:DHC:4471-DB)

MANU/DE/4232/2024

24.06.2024

Direct Taxation

Once a Resolution Plan is approved by the COC, it shall be binding on all the stakeholders

The Petitioner is seeking quashing of the Assessment Order issued by the Respondent no. 1/Deputy Commissioner of Income Tax under Section 143(3) of Income Tax Act, 1961 for the Assessment Year 2022-23 and Financial Year, 2021-The present petition also assails the Demand Notice under Section 156 of the Income Tax Act, 1961 and Notices dated 23rd May, 2024 under Section 274 of the Income Tax Act, 1961 issued by the Respondent no. 1.

The Petitioner company submits that, the Notices have been issued after the approval of the Resolution Plan for the revival and restructuring of the petitioner-company by learned National Company Law Tribunal ("NCLT"), vide order. The Petitioner submits that, the impugned order and notice is legally untenable and in teeth of the provisions of Insolvency and Bankruptcy Code ("IBC"), 2016, which envisages revival/ resolution of the Company on a ‘Clean Slate Basis’.

Present Court notes that the learned NCLT, Chennai, vide its order has allowed the application seeking initiation of the Corporate Insolvency Resolution Process ("CIRP") of the Petitioner- company and moratorium under Section 14 of the IBC, 2016 into force. Subsequently, the CIRP of the Petitioner culminated in successful manner, wherein, Resolution Plan for the revival and rehabilitation of the Petitioner- company was submitted and the same was accordingly approved by the Committee of Creditors ("COC") with requisite majority of votes on 13th September, 2021. Subsequently, on 06th December, 2021, final approval to Resolution Plan along with the necessary reliefs and concessions, including the extinguishment of all the past dues and claims not forming part of the Resolution Plan on the date of approval, was accorded.

Upon approval of the Resolution Plan, a new management took over the Petitioner-company, in order to implement the Resolution Plan as per the scheme of IBC, on a ‘Clean Slate Basis’.It is settled proposition of law that once a Resolution Plan is duly approved by the adjudicating authority under Section 31 (1) of IBC, 2016, the claims as provided in the Resolution Plan shall stand frozen and it will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stake holders. On the date of approval of Resolution Plan by the adjudicating authority, all such claims, which are not part of the Resolution Plan, shall stand extinguished, and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the Resolution Plan.

The law is well settled that once a Resolution Plan is approved by the COC, it shall be binding on all the stakeholders. Thus, the successful Resolution Applicant starts running the business of the Corporate Debtor on a fresh slate. The impugned Assessment Order as well as the Notice cannot stand in the eyes of the law.

The impugned order passed under Section 143(3) of the Income Tax Act, 1961; Notice of Demand under Section 156 of the said Act, and Notice passed under Section 274 of the said Act are set aside. Petition allowed.

Tags : Assessment Demand Legality

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