12 April 2021


Supreme Court

Sudesh Kedia vs. Union Of India




Payment of extortion money does not amount to terror funding

The Appellant is accused of committing offences under Sections 120B/414/384/386/387 of the Indian Penal Code,1860 (IPC) read with Sections 17/18/21 of the Unlawful Activities (Prevention) Act, 1967 [UA (P) Act] along with Sections 25 (1B) (a)/26/35 of the Arms Act and Section 17 (1) (2) of the Criminal Law Amendment (CLA) Act. The application filed for grant of bail was dismissed by the Judicial Commissioner-cum-Special Judge. The High Court dismissed the criminal appeal filed by the Appellant and upheld the order of the Special Judge. Hence, the present appeal.

It was submitted by the Appellant that, the only accusation is payment of illegal levy to TPC for the smooth functioning of the business. The Appellant is not a member of Tritiya Prastuti Committee (TPC) and cannot be accused of terror funding. On the other hand, there was no way, he could carry on smooth transportation of coal without meeting the demand of the terrorist organization. The meeting that the Appellant had with the members of the organization could not have been avoided and it was only for the purpose of his complying with the demand made by the members of the organization. It was submitted on behalf of the Appellant that a perusal of the charge- sheet and the other material on record would not disclose any offence under Section 17 of the UA (P) Act as it cannot be said that, by any stretch of imagination that the Appellant has raised funds for the terrorist organization.

Section 43-D (5) of [UA (P) Act] mandates that, a person shall not be released on bail, if the Court is of the opinion that, there are reasonable grounds for believing that the accusations made are prima facie true. A close scrutiny of the material placed before the Court would clearly shows that, the main accusation against the Appellant is that he paid levy / extortion amount to the terrorist organization. Payment of extortion money does not amount to terror funding. It is clear from the supplementary charge-sheet and the other material on record that other accused who are members of the terrorist organization have been systematically collecting extortion amounts from businessmen in Amrapali and Magadh areas. The Appellant is carrying on transport business in the area of operation of the organization. It is alleged in the second supplementary charge- sheet that the Appellant paid money to the members of the TPC for smooth running of his business. Prima facie, it cannot be said that the Appellant conspired with the other members of the TPC and raised funds to promote the organization.

Another factor taken into account by the Special Court and the High Court relates to the allegation of the Appellant meeting the members of the terror organization. It has been held by the High Court that, the Appellant has been in constant touch with the other accused. Prima facie, present Court is not satisfied that, a case of conspiracy has been made out at this stage only on the ground that the Appellant met the members of the organization.

While considering the grant of bail under Section 43 (5) D, it is the bounden duty of the Court to apply its mind to examine the entire material on record for the purpose of satisfying itself, whether a prima facie case is made out against the accused or not. An amount of Rs. 9,95,000 was seized from the house of the Appellant which was accounted for by the Appellant who stated that the amount was withdrawn from the bank to pay salaries to his employees and other expenses. At this stage, it cannot be said that the amount seized from the Appellant is proceeds from terrorist activity. There is no allegation that, Appellant was receiving any money. On the other hand, the Appellant is accused of providing money to the members of TPC.

Present Court is not satisfied that a prima facie case has been made out against the Appellant relating to the offences alleged against him. The judgment of the High Court is set aside and the Appellant is directed to be released on bail subject to the satisfaction of the Special Court. The appeals are allowed.

Tags : Charge-sheet Bail Entitlement

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Supreme Court

Central Coalfields Limited vs. Parden Oraon




Compassionate employment cannot be granted after a lapse of reasonable period

The Respondent requested the Appellants to appoint her son in the place of his father who was missing since 2002 which was rejected. Aggrieved thereby, the Respondent filed a writ petition in the High Court. The writ petition was allowed and the appeal filed by the Appellant was dismissed by the Division Bench of the High Court. Hence, present appeal.

The whole object of granting compassionate appointment is to enable the family to tide over the sudden crisis which arises due to the death of the sole breadwinner. The mere death of an employee in harness does not entitle his family to such source of livelihood. The authority concerned has to examine the financial condition of the family of the deceased, and it is only if it is satisfied that, the family will not be able to meet the crisis, then the job is offered to the eligible member of the family. Further, compassionate employment cannot be granted after a lapse of reasonable period as the consideration of such employment is not a vested right which can be exercised at any time in the future. It was further held that, the object of compassionate appointment is to enable the family to get over the financial crisis that it faces at the time of the death of sole breadwinner, compassionate appointment cannot be claimed or offered after a significant lapse of time and after the crisis is over.

The Respondent’s husband is missing since 2002. Two sons of the Respondent, who are the dependents of her husband as per the records, are also shown as dependents of the Respondent. It cannot be said that, there was any financial crisis created immediately after Respondent’s husband went missing in view of the employment of the Respondent. Though the reasons given by the employer to deny the relief sought by the Respondent are not sustainable, present Court is convinced that the Respondent’s son cannot be given compassionate appointment at this point of time. The application for compassionate appointment of the son was filed by the Respondent in the year 2013 which is more than 10 years after the Respondent’s husband had gone missing. As the object of compassionate appointment is for providing immediate succour to the family of a deceased employee, the Respondent’s son is not entitled for compassionate appointment after the passage of a long period of time since his father has gone missing. The judgment of the High Court is set aside. Appeal allowed.

Tags : Compassionate appointment Entitlement time period

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Income Tax Appellate Tribunal

M/s Singh Consultancy Pvt. Ltd. Vs. Income Tax Officer



Direct Taxation

When the notice issued by AO is ambiguous, penalty proceedings are not sustainable

The assessee is private limited company, engaged in the business of share, commodity trading and investment activities. It filed its return of income declaring loss of Rs.2,20,67431. The Assessing Officer completed the assessment under Section 143(3) of the Income Tax Act, 1961 (IT Act) determining total income of the assessee at Rs.26,39,389, wherein, he made addition of Rs.2,47,06,820 treating unsecured loan of Rs.2,47,06,820 as bogus and ingenuine.

The addition so made was confirmed by the learned Commissioner of Income Tax [CIT(A)]. Thereafter, the Assessing Officer initiated penalty proceedings under Section 271(1)(c) of the Act. Rejecting the various explanations given by the assessee and observing that, the assessee has concealed its income to the extent of Rs.2,47,06,820 willfully and knowingly by furnishing inaccurate particulars of income, he levied penalty of Rs.74,12,046 being 100% of the tax sought to be evaded. In appeal, the learned CIT(A) sustained the addition. Aggrieved with such order of the learned CIT(A), the assessee is in appeal before the Tribunal.

The Assessing Officer in the instant case levied penalty of Rs.74,12,046 being 100% of tax sought to be evaded on the ground that, the assessee has concealed its income to the tune of Rs. 2,47,06,820 willingly and knowingly by furnishing inaccurate particulars of income. The learned CIT(A) upheld the penalty so levied by the Assessing Officer, reasons of which have already been reproduced in the preceding paragraphs.

A perusal of the assessment order shows that, penalty has been initiated in general terms and the assessment order is not clear as to under which limb of the penalty i.e. for concealment of income or for furnishing inaccurate particulars of income has been mentioned. Similarly, in the case of penalty order, where it is mentioned that assessee has concealed its income to the tune of Rs.2,47,06,820 willingly and knowingly by furnishing inaccurate particulars of income. In order to initiate penalty proceedings, the Assessing Officer has to specify in the show-cause notice under Section 271(1(c) read with Section 274 of the Act, if the assessee has concealed the particulars of income or has furnished inaccurate particulars of income which is in instant case, the Assessing Officer has failed to do.

In the cases of CIT vs. Manjunatha Cotton and Ginning Factory, CIT vs. SSA's Emerald Meadows and Pr. CIT vs. Sahara India Life Insurance Company Ltd., the Co-ordinate Benches of the Tribunal are taking the consistent view that, when the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of Section 271(1)(c) of the IT Act, the penalty notice has been issued, the penalty proceedings initiated under Section 271(1)(c) of Act are not sustainable.

In view of decisions cited, present Tribunal held that since, the particular limb under which the penalty has been levied is not coming out from the notice as well as the assessment order and penalty order, therefore, such levy of penalty under these facts and circumstances is not justified. Accordingly, the order of the CIT(A) is set aside and the Assessing Officer is directed to delete the penalty so levied. Appeal filed by the assessee is allowed.

Tags : Penalty Levy Validity

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High Court of Delhi

Shyam S. Bageshra Vs. State NCT of Delhi and Ors.




When disputed questions of facts are involved which need to be adjudicated after parties adduce evidence, complaint under Section 138 of NI Act ought not to be quashed

The complainant filed a complaint under Sections 138/141/142 of Negotiable Instruments Act, 1881 (NI Act) before the learned trial Court for remedies as per law. In the complaint so filed, the learned trial Court, after going through the dates and events, evidence and documents on record as well as upon inquiry under Section 202 of Code of Criminal Procedure, 1973 (CrPC), vide order held that prima facie offence under the NI Act was made out against the accused and directed summoning of accused-company and its two Directors.

Against the aforesaid summoning order, the Directors of the accused Company filed application seeking discharge as well as dismissal of complaint before the trial Court, which was dismissed vide order. Aggrieved against the impugned summoning order and dismissal order, Petitioner, who is allegedly one of the Director of accused-Company, is before this Court seeking quashing of these orders as well as the complaint in question.

The stand of complainant is that, against supply of material to accused-company, two invoices bearing Nos. 2080000493 and 2080000494 for a sum of Rs. 1,14,62,732.27 were raised, however, an amount of Rs. 80,00,000 along with interest @24% was shown due towards accused-Company as on 8th May, 2017 and against the said debt/liability, the cheque in question was issued by the Petitioner, which dishonoured and led to filing of the complaint in question.

A bare perusal of chain of events, as stipulated in the complaint in question shows that, against an outstanding debt/liability, Respondent No. 3-company, had issued a cheque dated 27th December, 2016, which on presentation with the bank was returned with the remark "Account Blocked" and thereafter, Legal Demand Notice was served upon the Petitioner.

The Hon'ble Supreme Court in a decision of Rajeshbhai Muljibhai Patel & Ors. Vs. State Of Gujarat & Anr. has held that "When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under Section 138 of the NI Act ought not to have been quashed by the High Court by taking recourse to Section 482 of CrPC.".

Whether Petitioner's employment with the accused-Company was confined to maintenance of accounts or he was the Director or Authorized Signatory of accused-company and whether or not the cheque in question was signed by him or whether complainant is able to bring sufficient material before the court to rope in Petitioner for the offence in question, are the aspects which can be established during trial, therefore, it would be against principles of law to arrive at a conclusion without going into the merits of the case. Present Court is not inclined to interfere in the orders passed by the learned trial court. Petition dismissed.


Rajeshbhai Muljibhai Patel & Ors. Vs. State Of Gujarat & Anr. MANU/SC/0155/2020

Tags : Complaint Quashing of Entitlement

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Customs, Excise and Service Tax Appellate Tribunal

Bharti Airtel Ltd. Vs. C.C.E., Bangalore-I



Service Tax

Mere suppression of facts is not sufficient to invoke extended period; there should be some positive Act on part of noticee to evade payment of duty

The Appellants, M/s. Bharti Airtel Ltd., are providers of taxable service under the category of Telephone/Telecommunications Services; an audit conducted by the Department for the period 10th September, 2004 to 30th September, 2006, it appeared that the Appellants have availed CENVAT credit on (i) Angles, Channels, Beams, MS Tower parts (SS Mats) etc. used in erection and installation of towers and on (ii) Pre-fabricated buildings/shelters/PUF panels used for housing/storage of generating sets and other components/equipments/spares etc. and the same was not available in terms of CENVAT Credit Rules.

CBEC vide Circular F. No. 137/315/2007-CX4 dated 7th December, 2007 held that, the activity of erection of towers does amount to manufacture and hence, credit is not available. SCN was issued seeking to deny the erroneous credit amounting to Rs. 7,89,56,288 and to impose penalty under Section 78 of the Finance Act and Rule 15(1) of the CCR, 2004. The same was confirmed by Order-in-Original which is subject of discussion in the appeal. The appellants submit that, the towers and prefabricated buildings on which CENVAT credit has been availed are capital goods and therefore, CENVAT credit is correctly availed.

In the instant case, demand pertains to period 10th September, 2004 to 30th September, 2006. Show cause Notice has been issued on 6th July, 2009, which is clearly beyond the period of limitation. Apex Court in the case of Pushpam Pharmaceuticals Vs. CCE has held that ,mere suppression of facts is not sufficient to invoke extended period; there should be some positive Act on the part of the noticee to evade payment of duty. Other than just mentioning that the assessee continued to avail and utilise credit, no evidence of any positive act by the Appellant has been brought out.

Hon'ble High Courts/Tribunals have consistently held that, extended period cannot be invoked under such circumstances and demands are barred by limitation. The demands are barred by limitation. Appeals allowed.


Pushpam Pharmaceuticals Vs. CCE MANU/SC/1239/1995

Tags : Extended period Invocation Legality

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Customs, Excise and Service Tax Appellate Tribunal

Doosan Infracore Construction Equipment India Pvt. Ltd. Vs. The Commissioner of Customs (Preventive)




Refund cannot be denied, when all conditions of the notification are fulfilled

In present matter, Appellant has filed refund applications seeking refund of 4% Additional Customs duty as per Notification No. 102/2007-Cus. dated 14th September, 2007. The refund claims were processed and refund was sanctioned to the Appellant. Later, on verification, it was noticed by the Department that, with regard to 5 Bills of Entry, there is difference in the name of importer in the Bill of Entry and the corresponding sale invoices.

The Department was of the view that the Appellant is not eligible for refund as the conditions stipulated in Notification No. 102/2007-Cus. is not fulfilled; that only importer is eligible to claim refund of 4% SAD paid on imported goods and since claimant is not the importer of the goods, the refund ought not to have been sanctioned. Show cause notice was issued proposing to recover the erroneously sanctioned refund of Rs. 9,88,526 along with interest. After due process of law, the original authority confirmed the demand of 4% SAD amounting to Rs. 9,88,526 along with interest.

It is for the importer to file refund claim. The definition of "importer" as it stood prior to 2017 is an inclusive definition wherein the importer includes any owner or person holding himself out to be the importer. The appellant has entered into slump sale agreement with Doosan Infracore India Pvt. Ltd. on 1.4.2015 for sale of Excavator Division.

The definition of 'Acquired Assets' as per Section 1 of the said agreement is that, all assets and properties of the seller owned or used by the seller in connection with business would fall within "acquired assets" by the Appellant. It is also stated that, all tax benefits/receivables relating to inventory being transferred including but not limited to refund of SAD would be acquired assets from seller to buyer. After the slump sale agreement of the excavator division, the Appellant has become the owner of the imported goods or can be said to be in the shoes of a person holding himself out to be the importer. Though IEC of Doosan Infracore India Pvt. Ltd. was used for clearance of the goods, it cannot be said that, Appellant is a total stranger to Doosan Infracore India Pvt. Ltd. So also, it cannot be said that, the Appellant does not have any ownership over the goods.

The agreement is sufficient evidence to satisfy that the ownership of the goods was transferred from Doosan Infracore India Pvt. Ltd. to the Appellant. This being the circumstances, the refund claim filed by the Appellant would satisfy the condition prescribed in clause 2(c) of the Notification No. 102/2007. Sanction of refund to the appellant is legal and proper. The impugned order cannot sustain.

In the present case, there is no misuse or abuse of IEC code and the appellant being the owner of the goods has used IEC code of Doosan Infracore India Pvt. Ltd. for clearing the goods. If at all, it may be a procedural infraction. The refund cannot be denied, when all conditions of the notification are fulfilled. There is no violation of condition of Notification No. 102/2007 :so as to deny the refund of SAD as the appellant would fit into the definition of "importer". The impugned order is set aside. Appeal is allowed.

Tags : Refund Recovery Validity

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Thomas George vs. Union Bank Of India & Anr




Provisions of Limitation Act would apply mutatis mutandis to proceedings under IBC in NCLT/NCLAT

Present Appeal has been filed by the Appellant-Mr. Thomas George who is director of the suspended Board of the Corporate Debtor Mathstraman Manufacturers and Traders Pvt. Ltd. against the Impugned Order passed by the Adjudicating Authority, National Company Law Tribunal. The Application under Section 7 of Insolvency and Bankruptcy Code, 2016 (IBC) was filed by the Union Bank of India, (Erstwhile Corporation Bank which merged with it) against the Corporate Debtor.

In present Appeal, the Appellant claims that, the debt due and claimed before the Adjudicating Authority by the Bank was time-barred and thus, the Application should not have been admitted.

In Judgment in the matter of "Sesh Nath Singh & Anr. Vs. Baidyabati Sheoraphuli Co-Operative Bank Ltd And Anr.", the Supreme Court has observed that, under Section 18 of the Limitation Act, 1963,an acknowledgement of present subsisting liability, made in Company Appeal in writing in respect of any right claimed by the opposite party and signed by the party against whom the right is claimed, has the effect of commencing of a fresh period of limitation, from the date on which the acknowledgment is signed. However, the acknowledgment must be made before the period of limitation expires.

Further, as per the observation in said judgment, Section 238A of the IBC makes the provisions of the Limitation Act, as far as may be, applicable to proceedings before the NCLT and the NCLAT. The IBC does not exclude the application of Section 6 or 14 or 18 or any other provision of the Limitation Act to proceedings under the IBC in the NCLT/NCLAT. All the provisions of the Limitation Act are applicable to proceedings in the NCLT/NCLAT, to the extent feasible. The provisions of the Limitation Act would apply mutatis mutandis to proceedings under the IBC in the NCLT/NCLAT.

The documents on record referred by Learned Counsel for Bank show series of Acknowledgments of debts by Corporate Debtor since date of NPA which extend period of limitation if Section 18 of Limitation Act is considered. In view of Judgment of the Hon'ble Supreme Court, OTS Proposals and Settlement requests and balance sheet referred, present Tribunal do not find that the Application under Section 7 of IBC could be said to be barred by Limitation. There is no substance in the Appeal. The Appeal is dismissed.

Tags : Limitation Act Provisions Applicability

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