High Court of Jammu and Kashmir

Zakir Hussain and Ors. Vs. Krishan Lal

MANU/JK/0753/2018

24.09.2018

Property

When a legislative intent is clear from the language of provision, Court should give effect to it

The background facts of the case are that, the Respondent filed a Civil Suit for possession by enforcement of the right of prior purchase against the Appellants herein. The suit was contested by the Appellants and it ultimately came to be dismissed by the trial Court. The Respondent assailed the judgment before the Court of the learned Principal District Judge, and the learned District Judge vide an order remanded the matter to the learned Sub Judge.

Aggrieved of the order of the remand, the Appellants have challenged its vires on the grounds, that the same is contrary to the settled law of the land. The Principal District Judge has held that, the communication of the intended price at which the sale was offered to the Respondents has not been communicated to the Respondents herein and therefore, it goes to the very root of the stand of the Appellant No. 7, that, he had offered to sell the property initially to the plaintiff, who had shown his reluctance and had practically denied to purchase the same.

Section 18 of the Right of Prior Purchase Act ("the Act"), does not defeat the right of prior purchase under the doctrine of estoppel and the other relevant principles relating to estoppel, as are governed under the Evidence Act. The order of the learned Sessions Judge is lucid and clear. It is based on the law and the logic. In the case of B. Premanand and Others v. Mohan Kokal and Others, it has been held by the Apex Court that, while interpreting the provisions of the statute when a legislative intent is clear from the language, the court should give effect to it. Further, in the case of "Raghunath Rai Bareja and Another v. Punjab National Bank and Others", it has been held that where the words of the statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule.

The aforesaid enunciations of law, crystallize that when the language of the statute is clear it has to be understood and interpreted by adherence to that mode and it cannot be departed from or tinkered with. Therefore, the trial Court had to understand the import of the application of Section 18 of the Act to the facts and circumstances of the case in line and in tune with what has been provided and postulated therein and it could not have been laid to rest. A narrow or technical interpretation cannot be given to Section 18 of the Act by doing violence to the language incorporated in it. Thus, there seems to be no error in the order impugned, as a consequence of which, the appeal is dismissed and the order impugned is upheld.

Relevant

B. Premanand and Others v. Mohan Kokal and Others reported in MANU/SC/0249/2011
: 2011 SCCR 392, "Raghunath Rai Bareja and Another v. Punjab National Bank and Others" reported in MANU/SC/5456/2006
: 2007 SCCR 6

Tags : Prior purchase Right Statute Interpretation

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Supreme Court

Sharad Hiru Kolambe Vs. State of Maharashtra and Ors.

MANU/SC/1024/2018

20.09.2018

Criminal

Default sentence is not to be merged with or allowed to run concurrently with a substantive sentence

Present appeal challenges the decision passed by the High Court affirming the conviction and sentence of the Appellant (original Accused No. 6) for offences punishable under the Indian Penal Code (IPC) as well as the Maharashtra Control of Organised Crime Act, 1999 (the MCOC Act). The emphasis in the present appeal is placed on the nature of default sentences passed against the Appellant. The Appellant along with other co-accused was tried and convicted by the Special Judge

Default sentence is not to be merged with or allowed to run concurrently with a substantive sentence. Thus, the sentence of imprisonment for non-payment of fine would be in excess of or in addition to the substantive sentence to which an offender may have been sentenced or to which he may be liable under commutation of a sentence.

Regarding the nature and extent the power to impose fine, Section 63 of the IPC provides some guidelines and states that, wherever no sum is expressed to which a fine could extend, the amount should not be excessive. It follows that, if the law in question or the concerned provision stipulates the quantum or minimum amount of fine, the Courts must be guided by such specification.

If the term of imprisonment in default of payment of fine is a penalty which a person incurs on account of non-payment of fine and is not a sentence in strict sense, imposition of such default sentence is completely different and qualitatively distinct from a substantive sentence. It is not the case of the Appellant that default sentences awarded to him must run concurrently with substantive sentence imposed on him. His case is that all default sentences must inter se run concurrently.

Default sentences, inter se, cannot be directed to run concurrently. However, considering the financial condition of the Appellant, a case is certainly made out to have a sympathetic consideration about the quantum of default sentence. The quantum of fine imposed in the present case in respect of offences punishable under Sections 364A, 395, 397 and 387 of the IPC is not excessive and is quite moderate. However, the default sentence for non-payment of such fine, ought to be reduced to the level of one month on each of those four counts in respect of the Appellant.

Resultantly, while maintaining the quantum of fine, in respect of four counts of offences punishable under the IPC cumulatively at Rs. 4000, the aggregate default sentence shall be four months; and in respect of three counts of offences punishable under the MCOC Act, the fine shall be Rs. 15 lakhs cumulatively with default sentence of three years in aggregate. Even if no amount of fine is paid by the Appellant, the total default sentence for the Appellant would thus be three years and four months, out of which three years of default sentence has already been undergone by the Appellant. Present appeal thus stands allowed.

Tags : Conviction Fine Imposition

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Supreme Court

The State of Maharashtra and Ors. Vs. Sayyed Hassan Sayyed Subhan and Ors.

MANU/SC/1021/2018

20.09.2018

Criminal

No bar to a trial or conviction of an offender under two different enactments, but bar is only to punishment of offender twice for offence

In present matter, First Information Reports (FIRs) were registered for transportation and sale of Gutka/Pan Masala for offences punishable Under Sections 26 and 30 of the Food and Safety Standards Act, 2006 ('FSS Act') and Sections 188, 272, 273 and 328 of the Indian Penal Code, 1860 ('IPC'). The Respondents in the above appeals filed Criminal Writ Petitions and Criminal Applications in the High Court of Bombay for quashing the FIRs. The High Court quashed the criminal proceedings against the Respondents and declared that the Food Safety Officers can proceed against the Respondents under the provisions of Chapter X of the FSS Act. Aggrieved thereby, the State of Maharashtra has filed present appeal.

There is no dispute that, Section 55 of the FSS Act provides for penalty to be imposed for non compliance of the requirements of the Act, Rules or Regulations or orders issued thereunder by the Food Safety Officer. The High Court is clearly wrong in holding that, action can be initiated against defaulters only under Section 55 of FSS Act or proceedings under Section 68 for adjudication have to be taken. A further error was committed by the High Court in interpreting the scope of Section 188 of the IPC. Section 188 of the IPC does not only cover breach of law and order, the disobedience of which is punishable. Section 188 is attracted even in cases where the act complained of causes or tends to cause danger to human life, health or safety as well.

There is no bar to a trial or conviction of an offender under two different enactments, but the bar is only to the punishment of the offender twice for the offence. Where an act or an omission constitutes an offence under two enactments, the offender may be prosecuted and punished under either or both enactments but shall not be liable to be punished twice for the same offence. The same set of facts, in conceivable cases, can constitute offences under two different laws. An act or an omission can amount to and constitute an offence under the Indian Penal Code and at the same time, an offence under any other law.

In Hat Singh's case this Court discussed the doctrine of double jeopardy and Section 26 of the General Clauses Act, 1987 to observe that prosecution under two different Acts is permissible if the ingredients of the provisions are satisfied on the same facts. A perusal of the provisions of the FSS Act would make it clear that, there is no bar for prosecution under the IPC merely because the provisions in the FSS Act prescribe penalties. Therefore, the findings of the High Court are set aside.

The matters remanded to the High Court to consider the Criminal Writ Petitions and Criminal Applications afresh in respect of the point framed i.e. whether offences under Section 188, 272, 273 and 328 of the IPC are made out in the FIRs which are the subject matter of the cases.

Relevant

State of Rajasthan v. Hat Singh MANU/SC/0006/2003
: (2003) 2 SCC 152

Tags : FIR Quashing Validity

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High Court of Delhi

Punjab National Bank Vs. M.L. Bansal

MANU/DE/3421/2018

20.09.2018

Service

Court can substitute penalty imposed on employees, keeping in view the long period of time which had elapsed from date of imposition of penalty

The present intra Court appeal impugns the order passed by the learned Single Judge whereby while allowing the writ petition filed by the Respondent, the penalty of removal from service imposed upon the Respondent by the Appellant/Bank has been modified to that of compulsory retirement. The main plea pressed by the Appellant is that even if the learned Single Judge was of the view that, the penalty imposed on the Respondent was in any manner disproportionate, the learned Single Judge ought to have remanded the matter back to the Appellant/Bank instead of substituting the penalty imposed by the Appellant.

The entire case against the Respondent relates to an incident, where the Respondent was alleged to have failed to exercise due care while processing a single loan transaction proposal. The case against the Respondent was only of some procedural irregularities and at no stage was the Respondent charged with any misconduct relating to financial irregularities or misappropriation.

The learned Single Judge was fully conscious of the fact that, the Court should in the ordinary course remit the matter back to the Disciplinary Authority for passing a fresh order of penalty but keeping in view the time period which had already elapsed since the Respondent's removal from service and only with an aim to shorten litigation for a senior citizen who had served the Bank for almost 29 year, had taken upon him the task of modifying the penalty of removal from service to compulsory retirement. The only effect of the modified penalty in the evening of his life, would be to at least get some retiral benefits.

In Jai Bhagwan Vs. Commr. of Police & Ors. and S.R. Tewari Vs. Union of India & Anr., the Apex Court had substituted the penalty imposed on the employees, keeping in view the long period of time which had elapsed from the date of imposition of penalty.

In the light of the settled legal position and in the facts of the present case, there is absolutely no reason to defer with the course of action adopted by the learned Single Judge. The charge against the Respondent related to procedural irregularities committed by him in the year 1994 and that too when he was only part of the hierarchy of officers, which was responsible for processing the loan proposal, the learned Single Judge was justified in modifying the penalty imposed on the Respondent by taking into consideration respondent's 29 years of almost blemishless service as also the fact that the penalty order related to the year 2015, in no case can the Court interfere with the quantum of penalty. There is no merit in the present appeal.

Relevant

Jai Bhagwan Vs. Commr. of Police & Ors. MANU/SC/0671/2013
: 2013 (8) SCALE 392 and S.R. Tewari Vs. Union of India & Anr. MANU/SC/0566/2013
: 2013 (7) SCALE 417

Tags : Penalty Removal Modification

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Customs, Excise and Service Tax Appellate Tribunal

KBN Enterprises Vs. Commissioner of Central Tax and Central Excise, Belgaum

MANU/CB/0059/2018

20.09.2018

Service Tax

If the Assessee pays tax with interest, no notice shall be served

The Appellants are engaged in providing services under the category of "mining of mineral service". The Joint Commissioner of Service Tax issued a show-cause notice alleging that during the audit of the Assessee's record on reconciling the income shown in ST-3 returns and tax paid thereof with service tax liability as per the income shown in Trial Balance for the year 2014-15, it was found that, service tax paid was lower than the service tax liability on the income reflected in the Trial Balance, resulting in short-payment of service tax. Further, it was noticed that, the Assessee had failed to file ST-3 returns for the period October 2014 to March 2015.

After following the due process, the original authority confirmed the demand of Rs. 24,71,701 under proviso to Section 73(1) of the Finance Act, 1994 and also appropriated the said amount paid by the Assessee along with interest of Rs. 98,733/- and imposed equal penalty under Section 78 (1) of the Act, 1994. Aggrieved by the said order, Appellant filed appeal before the Commissioner (A), who rejected the appeal. Hence, the present appeal.

It is a settled law that, when service tax is paid with interest before issuance of show-cause notice and the fact of payment is intimated to the Central Excise Officers, the proceedings should be deemed to have been concluded and the Revenue was not required to issue any show-cause notice and Section 73(3) of the Act, acts as a bar against issuance of show-cause notice in terms of Section 73(1) of the Act.

Karnataka High Court in the case of CCE vs. Adecco Flexione Workforce Solutions Ltd. held that, if the assessee pays the tax with interest, no notice shall be served. Further, in the case of CST, Bangalore vs. Master Kleen, it has been held by the Hon'ble High Court of Karnataka that, when the service tax and interest are paid, show-cause notice shall not be issued in terms of Section 73(3) of the Act, 1994.

The service tax liability was shown in the books of accounts but it was not paid on account of the fact that they could not get the service tax collected from their clients. Further, there is no suppression of facts because all the transactions are reflected in the books of accounts and the audit party detected these transactions from their records only. Further, in view of the decision rendered in the case of Garodia Special Steels Ltd. and Midnapore Tyre Retreading Factory, there is no suppression on the part of the Appellant to evade payment of service tax. Further, when the service tax is paid along with interest before issuance of show-cause notice, then the Revenue should not have issued the show-cause notice as per Section 73(3) of the Act. The Appellant's case is squarely covered by the decision of the Hon'ble Karnataka High Court in the case of Adecco Flexicone Workforce Solutions Ltd. and Master Kleen. Impugned order is set aside.

Relevant

CCE vs. Adecco Flexione Workforce Solutions Ltd. reported in MANU/KA/2372/2011
: 2012 (26) STR 3 (Kar.), CST, Bangalore vs. Master Kleen: MANU/KA/2620/2011
: 2012 (25) STR 439 (Kar.)

Tags : SCN Penalty Imposition

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Customs, Excise and Service Tax Appellate Tribunal

CST, Delhi – III Vs. Shyam Indus Power Solutions Pvt. Ltd.

MANU/CE/0427/2018

18.09.2018

Service Tax

Value of both supply and service is to be added for payment of service tax under composition scheme

The facts of the matter are that, the Respondent/Assessee is registered with the department for various services such as erection, commissioning and installation services; construction services in respect of commercial and industrial buildings and civil structure and work contract service. They are also registered for business support services as well as under GTA services. A show cause notice dated 18th October 2013 came to be issued to the Respondent/Assessee.

The matter was adjudicated by the Commissioner who vide his order has set aside the show cause notice. Feeling aggrieved by the above impugned order of the Commissioner, the Department is in appeal alleging that the order-in-original is not legal and proper and therefore same has been reviewed by Competent Authority under Section 86(2) of the Finance Act, 1994. It has been the contention of the Department that, the Respondent/Assessee by splitting the single work contract into separate contracts had evaded payment of service tax and Adjudicating Authority has failed to appreciate the respondent were engaged in business of execution of EPC contracts pertaining to setting up of that electric service station on turkey basis to various state electricity companies.

From the perusal of the Rule 3(i) of Work Contract (Composition Scheme for Payment of Service Tax) Rules, 2007, it is clear that for determination of the value under the composition scheme, the value of all goods used in or in relation to execution of the work contract need to be included in the serviceable value even when the goods might have been supplied under any other contract for execution of the composite work contract. It is a matter of record in this case that, all the contracts are composite contracts for both supply of goods and services as both the elements are absolute pre-requisite for completion of any turnkey project. It is also of the matter of fact that the Respondent/Assessee has opted for the benefit of composite work contract service and has availed the benefit of Rule 3(i) of Composition Scheme. The value of both supply and service need to be added for payment of service tax under composition scheme.

The scope of composite works contract is clear and should be read together for the purpose of service tax. On overall examination the facts and circumstances of the case, present Tribunal is in agreement with the findings recorded by the Original Authority regarding the composite nature of contract executed by the Appellant and the valuation method that should be followed for discharging service tax liability.

The Appellant is fully aware of the legal implications of service tax liability on composite works contract. Their act of first paying composition rate on what is claimed to be a service contract and later switching over to full rate of payment without composition clearly reveals the knowledge and deliberate intend of the Appellant.

Impugned order is without any merit and is set aside. The matter remanded to the original Adjudicating Authority for purpose to verify the claim of the Respondent/Assessee in his arguments submitted before present Tribunal that, on certain contracts, they have paid full rate of service tax rather than concessional rate of service tax under composition scheme. Appeal is accordingly allowed by way of remand.

Tags : Valuation Tax Evasion

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