8 July 2019


Judgments

Supreme Court

Craft Interiors (P) Ltd. Vs. The Joint Commissioner of Commercial Taxes (Intelligence) and Ors.

MANU/SC/0865/2019

02.07.2019

Sales Tax/VAT

If new commercial commodities emerge out of goods already taxed earlier, new commercial commodity is liable to sales tax

Present civil appeal arises out of the judgment of the High Court dismissing the writ petition and upholding the validity of Rule 6(4)(m)(i) of the Karnataka Sales Tax Rules, 1957(KST Rules) read with Explanation III to Rule 6(4) of the said rules. The question which has been raised in the instant appeal is whether the condition of 'use in the same form in which such goods are purchased' under Rule 6(4)(m)(i) of the KST Rules expands the scope of charging Section i.e. Section 5B under KST Act, 1957.

The main thrust of submission of the learned Counsel for the Appellant, is that the condition under Rule 6(4)(m)(i) of goods purchased be used "in the same form" is beyond the charging Section (Section 5B) of the KST Act, 1957. The charging Section does not restrict the form in which the goods are to be transferred in a works contract. However, the Rule restricts the deduction available on the form in which the goods are used in the execution of works contract.

Section 5B of the KST Act and Rule 6(4)(m)(i) of the KST Rules operate in different spheres. Section 5B is a charging provision for levy of sales tax whereas Rule 6(4)(m)(i) is a provision for deduction from tax. Under Section 5B, tax can be levied on transfer of property in the goods whether as goods or in some other form whereas Rule 6(4)(m)(i) provides for a deduction in respect of the goods which have already suffered tax and which are used in the same form. Thus, it appears to be in clear consonance with the charging provision and does not militate against Section 5B of KST Act, 1957.

This Court in State of Tamil Nadu Vs. Pyare Lal Malhotra and Others has held that if the separate commercial commodities emerge out of the goods already taxed earlier, the new commercial commodity is liable to sales tax provided there is a law to this effect.

The exposition of legal principles laid down in Pyare Lal Malhotra and Others, brings out two basic principles governing sales tax law: i. Sales tax can be levied on the same goods only once so long as they retain their identity of goods of a particular type, and ii. If separate commercial commodities emerge out of the (goods already taxed earlier), then said new commercial commodity is liable to sales tax.

Rule 6(4)(m)(i) purports to grant benefit to the Assessee by allowing deductions for the value of goods which have already suffered taxation and which goods substantially retain their original identity while being used in the execution of a works contract. Explanation III to Rule 6(4) clarifies it further by categorically providing that, in case the goods are transformed into a different commodity which then is used in the execution of works contract, then the benefit of deduction cannot be availed.

It is trite law that, tax provisions granting exemptions/concessions are required to be strictly construed as recently held by this Court in M/s. Achal Industries Vs. State of Karnataka. There is no variance between Rules 6(4)(m)(i) read with Explanation III and Section 5B of the KST Act, 1957 and contention of the Appellant in assailing the validity of Rule impugned is misconceived and without substance. It will be open for the assessing authority to proceed with the impugned assessment proceedings initiated pursuant to notices dated 8th November, 2002 independently.

Relevant

State of Tamil Nadu Vs. Pyare Lal Malhotra and Others MANU/SC/0419/1976

Tags : Rule Validity Scope

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High Court of Delhi

Bindu and Ors. Vs. State of NCT of Delhi

MANU/DE/2039/2019

01.07.2019

Criminal

Charge would be framed not on mere suspicion but on facts giving rise to grave suspicion of accused having committed offence

Petitioners impugn order whereby the Revisional Court has reversed the order on charge passed by the Trial Court in case FIR under Sections 323, 341, 354, 509, 506 and 34 of Indian Penal Code, 1860 (IPC). By order, the Trial Court had discharged the Petitioners of all offences. By the impugned order, the Revisional Court set aside the order of the Trial Court discharging the Petitioners and directed framing of a charge under Section 323/34 against the Petitioners and under Sections 509 and 354 against the Petitioner No. 2.

The Revisional Court was of the view that the Trial Court could not go into the probity of the evidence or the testimonies. The Revisional Court relied on the statement given under Section 164 of Code of Criminal Procedure, 1973 (CrPC), and was of the view that, there was prima facie sufficient evidence to frame charge against the Petitioners under Section 323 read with Section 34 of IPC and under Section 509 and Section 354 of IPC against Petitioner No. 1.

The Supreme Court in Union of India v. Prafulla Kumar Samal, has held that, at the stage of framing of charge, the Trial Court has the power to shift and weigh evidence though for a limited purpose and finding out whether or not a prima facie case against the accused has been made out.

Charge would be framed not on mere suspicion but on the facts giving rise to grave suspicion of the accused having committed the offence. In the present case the independent eye witness does give his version of the incident, which, contradicts the version of the complainant. Not supporting the version of the complainant is distinct and different from contradicting the version of the complainant. If an independent eye witness claims not to have witnessed the incident and does not state anything about the incident and does not support the version of the complainant, his statement can be disregarded. However, where an independent eye witness admits to being a witness and makes a statement about the incident but contradicts the version of the complainant, credence would have to be given to his version, more so, when the complainant herself has stated that the said eye witness was present throughout the incident.

The Trial Court had rightly held that, there are clear contradictions in the statement of the complainant. The facts do not give rise to grave suspicion against the accused for framing of a charge against them under Sections 354, 509, 506, 323, 341 and 34 of IPC. There is no medical or other evidence to substantiate the allegations leveled by the complainant.

The Revisional Court has clearly committed an error in interfering with the well reasoned order of the Trial Court holding that, no prima facie case giving rise to grave suspicion was made out against the petitioners. The impugned order of the Revisional Court reversing the order on charge is not sustainable. The same is accordingly set aside. Revision petition is allowed.

Relevant

Union of India v. Prafulla. Kumar Samal, MANU/SC/0414/1978

Tags : Charge Framing of Validity

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High Court of Delhi

Sachin and Ors. Vs. State of NCT of Delhi

MANU/DE/2044/2019

01.07.2019

Criminal

No Court could take cognizance of offence under Section 186 of IPC except on a complaint of a proper officer made under Section 195 of CrPC

Petitioner impugns order, whereby, charges have been framed against the Petitioners under Sections 186, 353 and 307 of Indian Penal Code, 1860 (IPC) read with Section 34 of IPC. FIR was registered under Sections 186, 353, 332 and34 of IPC registered on the complaint of Inspector. It is submitted on behalf of the Petitioners that, without appreciating facts, Trial Court has erroneously framed charges against the Petitioners.

For a charge under Section 307 IPC to be framed, the nature of weapon used, the manner in which it is used, motive for the crime, severity of the blow, part of the body where injury is inflicted, is all to be taken into consideration to determine the intention.

In the present case, there is no allegation that any weapon was used. The CT Scan clearly shows no abnormality or injury to the head. Manner in which the Investigating Officer as well as the complainant have conducted themselves clearly shows that, an attempt was made to obtain an opinion that the nature of injury sustained was serious in nature. An effort was made to inflate the charges. The facts clearly show that a charge under Section 307 of IPC could not have been framed against the Petitioners.

With regard to the charges framed under Sections 186 and 353 of IPC is concerned, said charges could not have been framed in the absence of compliance with Section 195 of Code of Criminal Procedure, 1973 (CrPC). No court can take cognizance of an offence under Section 186 IPC unless a complaint is made by the proper officer in the proper format as prescribed under Section 195 of CrPC. Breach of Section 195 of CrPC renders the action void ab initio.

Non-compliance of Section 195 of CrPC is a non-curable defect and renders the proceeding void ab initio. Further, it may be seen that, Section 353 of IPC has also been invoked in the subject case which is, in fact, an extension of Section 186 of IPC. The allegations with regard to Section 353 of IPC, as contained in the subject FIR, really fall in the nature of an offence under Section 186 of IPC. No Court could have taken cognizance of the offence under Section 186 of IPC except on a complaint of a proper officer made under Section 195 of CrPC.

Further, it may be seen that, the entire proceedings smack of arbitrariness and vindictiveness on the part of the complainant and falls squarely within the parameters of the decision of the Supreme Court in Manoj Sharma vs. State and Prabhu Chawla vs. State of Rajasthan, wherein, the Supreme Court has held that substantive justice requires that proceedings of such a mala fide nature should be quashed in exercise of powers under Section 482 of CrPC.

Further, the impugned order cannot be sustained and is rendered void ab initio as subject proceedings suffer from infraction of Section 195 of CrPC, being against the dicta of the Supreme Court in Daulat Ram vs. State of Punjab. Impugned order framing charges against the Petitioners is set aside. Petition allowed.

Relevant

Manoj Sharma vs. State: MANU/SC/8122/2008
, Prabhu Chawla vs. State of Rajasthan: MANU/SC/0979/2016
, Daulat Ram vs. State of Punjab: MANU/SC/0139/1962

Tags : Cognizance Proceedings Validity

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Competition Commission of India

Consumer Educational and Research Society and Ors. Vs. Union of India and Ors.

MANU/CO/0024/2019

28.06.2019

MRTP/ Competition Laws

When statutory rules to deal with grievance of IPs exists, no anti-competitive conduct can be said to have arisen warranting an investigation into matter

The present information has been filed, by Consumer Educational and Research Society ('IP-1') and Parul Choudhary ('IP-2'), under Section 19(1)(a) of the Competition Act, 2002, against Union of India, Ministry of Railways ('OP-1') and Indian Railway Catering and Tourism Corporation Ltd. ('OP-2') alleging contravention of the provisions of Section 4 of the Act.

The IPs have, prayed that an inquiry into the matter be conducted by the DG and subsequently relief may be granted under Section 27 of the Act. Further, the Informants have prayed that the OPs be directed (i) to pay an amount of Rs. 10,000, being the total forfeited fare, to IP-2 along with interest at the rate of 18% per annum from various dates of payment, (ii) to alter its refund rules by discarding the said unfair condition, (iii) to pay an amount of Rs. 25,000 as cost to IP-2 and (iv) pass any other order or direction which the Hon'ble Commission deems fit and proper.

The Commission notes that, due to the statutory and regulatory framework, dominance of Indian Railways in the market of transportation of passengers through railways across India is not disputed. The Commission notes that OP-2 vide its letter addressed to OP-1 (with a copy to IPs) had informed that "No Refund of fare shall be admissible on the tickets having confirmed reservation in case the ticket is not cancelled or TDR not filed online upto four hours before the scheduled departure of the train".

The Commission further notes that, the Railway Passengers (Cancellation of Tickets and Refund of Fare) Rules-2015, has been notified in the Gazette by the Central Government. As per provisions of Rule No. 8(7) of the said rule, "No Refund of fare shall be admissible on the tickets having confirmed reservation in case the ticket is not cancelled or TDR not filed online upto four hours before the scheduled departure of the train". In the face of existence of statutory rules to deal with the grievance of IPs, no anti-competitive conduct can be said to have arisen in the present case, warranting an investigation into the matter. If there is deficiency in service on the part of OPs', it is for the IPs to initiate proceedings before an appropriate forum.

The Commission is of the opinion that there exists no prima facie case, and the information filed is closed forthwith under Section 26(2) of the Act. At the same time, the Commission feels that, Indian Railways may consider review of the existing rules of refund of fare and make the same more consumer friendly so that the passengers are not inconvenienced due to deficiency in services on its part, including delays on account of running the trains.

Tags : Dominance Provision Contravention

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High Court of Bombay

Girdhar Brijmohan Maru Vs. Vimal Lalchand Mutha and Ors.

MANU/MH/1607/2019

26.06.2019

Motor Vehicles

Tribunal cannot accept disability certificate without examining Doctor concerned

Present appeal has been filed by the original claimant for enhancement of compensation. He had filed Petition before Motor Accident Claimed Tribunal, for getting compensation of Rs. 3,50,000 for the injuries suffered by him in vehicular accident.

The learned Tribunal has held that, the claimant sustained injuries due to the sole negligence on the part of truck driver and therefore, Respondent Nos. 1 and 2 are the only persons liable to pay compensation joint and severally to the claimant amount of Rs. 75,000 with interest @ 7.5 % per annum from the date of the petition till actual realisation of the entire amount has been awarded. Hence, the present appeal has been filed by the original claimant.

The injuries were sustained by the claimant due to rashness and negligence on the part of truck driver. Therefore, while awarding the compensation the liability has been rightly fixed on Respondent Nos. 1 and 2, who are the owner and insurance company of the offending vehicle. No evidence was led by the insurance company to prove any statutory defence. Under such circumstance, it was the duty of the Member, Motor Accident Claims Tribunal to award just compensation as per the said principles.

The claimant had examined himself and then further examined in all four medical officers to prove his injuries and the treatment that, he had taken. The disability certificate is issued by Civil Surgeon. However, perusal of certificate does not make it clear, as to whether that permanent disability is restricted to particular limb or not and the handwritten part of the same is giving three different injuries. Further, though that disability certificate is given by Civil Surgeon, who can be said to be the Government servant, yet said Civil Surgeon was not examined.

In view of the decision in Rajesh Kumar vs. Raghuveer Singh, Tribunal cannot accept disability certificate without examining the Doctor concerned. Under such circumstance, the further evidence ought to have been led by the claimant that the said disability had affected his earning capacity. Mere statement by the claimant that, he cannot perform work as before is not sufficient under such circumstance. However, that does not estop or preclude him from claiming compensation under other heads. Each of the Doctor has given the details of the treatment that was given to the claimant. He has undergone operations twice which required hospitalization. Under such circumstance, definitely case is made out to grant compensation under those conventional heads. The medical bills have been proved through the doctors.

Further, taking into consideration the fact that he has undergone two operations, he is entitle to get compensation of Rs. 40,000 towards pains and sufferings. In all he was required to be hospitalized for about 15 days and therefore, he would have been looked after by somebody. Under such circumstance, under the head of attendance, it would be just and proper to award amount of Rs. 10,000 to him.

The claimant has produced on record his income tax returns. His occupation was owner of weaving machines. Average of those income tax returns is required to be considered and it would be just and proper to hold that he might have been earning around Rs. 63,000 per annum. In view of fact that, Claimant had undergone two operations for about 6 months and therefore under the head of loss of income, he would get amount Rs. 31,500. Further, as per Exhibit 120, the certificate is given by Doctor that for removal of implant he may require amount of Rs. 25,000. Under such circumstance, this amount is also required to be added in the total amount of compensation. Thus, the total amount of compensation, to which the claimant is entitled to, is Rs. 1,51,500.

The learned Member, MACT was not justified in giving a lump sum amount without any base as compensation. The bifurcations ought to have been given in clear words. The learned Advocate appearing for the appellant has submitted that the interest has been awarded @ 7.5 % per annum, which is on the lower side. The fact that, the petition was filed in the year 1999 and it was decided in 2007. The learned Member, MACT ought to have granted interest @ 9% per annum.

The Judgment and Award passed by Tribunal is hereby set aside to the extent of quantum. The Respondent Nos. 1 and 2 shall pay amount of Rs. 1,51,500 (inclusive of amount of No Fault Liability) to the claimant with interest @ 9% per annum. Appeal is hereby partly allowed.

Relevant

Rajesh Kumar vs. Raghuveer Singh, MANU/SC/7686/2008

Tags : Compensation Enhancement Entitlement

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Customs, Excise and Service Tax Appellate Tribunal

Nova Petrochemicals Ltd. Vs. C.C.E.- Ahmedabad-II

MANU/CS/0117/2019

26.06.2019

Excise

Exemption of excise duty would be applicable to NCCD also, as same is surcharge

The issue involved in the present appeal is that, the Appellant has not paid National Calamity Contingent Duty on Polyster Filament Yarn during the period 1st June, 2003 to 30th April, 2004 cleared to 100% EOU and that cleared for captive consumption. They were issued show cause notice for recovery of same. The demand was confirmed against them vide impugned order. Hence the present appeal.

It is submitted that, the supplies made to 100% EOU are in the nature of export under Bond as allowed under Rule 19 of the Central Excise Rules, 2002. Appellant further submits that, the clearances to EOU are exempted by virtue of Notification No. 22/2003 - CE dated 1st March, 2003. In respect of clearance for captive consumption, he submits that, Notification No. 67/95 - CE dated 16th March, 1995 has been issued under Section 5A of Central Excise Act, is applicable to NCCD also since it is surcharge and hence in the nature of excise duty only.

The issue is no more res-integra in the light of judgments cited by the Appellant. The Hon'ble Apex Court in case of M/s. Bajaj Auto Ltd. has held that, exemption of excise duty would be applicable to NCCD also as the same is surcharge. Further in the light of judgments cited by the Appellant, the demand of NCCD on goods cleared for captive consumption and to 100% EOU is not sustainable. The impugned order is set aside. The appeal is allowed with consequential reliefs to the Appellant.

Relevant

Bajaj Auto Limited vs. Union of India (UOI) and Ors. MANU/SC/0417/2019

Tags : Demand NCCD Legality

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