Legislative and Regulatory Update
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In This Issue [No.166]
August 10, 2006
Supreme Court High Courts IRDA PIB RBI TRAI International Cases & News
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Kerala State Science and Technology Museum v. Rambal Company and Ors.
Respondent No. 1 entered into an agreement with the appellant, a society registered under Travancore Cochin Literary and Scientific Societies Registration Act, 1995, for construction of planetarium building and allied civil works. Dispute arose between the parties and the agreement came to be terminated vide a termination notice issued by the appellant. This was followed by a letter from respondent No.1 alleging breach of contract to which counter claim was raised by appellant. A demand notice by appellant, under Section 34 of Revenue Recovery Act 1968, followed calling upon respondent No. 1 to remit an amount with future interest. Respondent No. 1 moved High Court under Section 11 of Arbitration and Conciliation Act, 1996 for appointment of an arbitrator for resolution of all disputes and differences between parties. The matter then came up before the Division Bench of Kerala High Court which ruled in favour of the respondent holding that quantification of damages done and demanded from respondent No. 1 cannot be legally sustained and accordingly they were set aside and hence the present appeal. The respondents contended that the entire proceedings are time barred and that a time barred debt cannot be recovered by recourse to revenue recovery proceedings. The appellants contended that it is a society owned by the state and, therefore, Article 112 of Limitation Act, 1963 is applicable and so the demand raised is well within time. The appellants contended that there was no dispute about breach of contract while the respondents submitted that there was dispute regarding breach of contract. Held, the Division Bench did not record any positive finding as to whether the document relied upon by the appellant clearly established admission of a breach of contract and also it did not examine whether the matter was time barred. Therefore order of Division Bench set aside and matter back remitted for fresh consideration.
Rapti Commission Agency v. State of U.P. and Ors
The appellant is an agent of principals ('Ex-U.P. Principals') situated outside the State of Uttar Pradesh. The appellant purchased Mentha Oil for and on behalf of Ex-U.P. Principals and dispatched them to the said principals on the basis of agreements entered into between them. One consignment of Mentha Oil was detained by the Trade Tax officer and appellant was informed by a notice that the detention was made because the appellant had not deducted the tax from the sellers/agriculturists and had not deposited the same in terms of Section 8-E of the Act. A writ petition was then filed before High Court challenging constitutional validity of Section 8-E of the Act. The High Court ruled in favour of the respondent holding that the provision is valid and hence the present appeal. Appellant submitted that the High Court clearly missed to notice the basic issues involved. The transactions were inter-State transactions and so the State legislature was not empowered to provide for deduction of tax at the time of making purchase. It was submitted that when a person has ultimately no liability to pay tax, he cannot be compelled to go through the procedure provided under the statute for the purpose of assessment and determination of tax liability. Respondent-state submitted that High Court rightly upheld the constitutional validity of Section 8-E of the Act. The writ petition was dismissed on the ground that alternative remedy was available. Held, if a person is not liable for payment of tax at all, the collection of a tax from him, with a possible contingency of refund at a later stage, will not make the original levy valid, because if sales or purchases are exempt from taxation altogether, they can never be taken into account, at any stage, for the purpose of calculating or arriving at the taxable turnover and for levying tax. Appeal allowed.
Tata Cummins Ltd v. State of Jharkhand and Ors
The petitioner company, a manufacturer of diesel engines and components, with headquarters in Jamshedpur was allowed exemption from sales tax on purchase of raw materials and sale of finished goods for eight years under Bihar Industrial Policy, 1995. Later, State of Bihar was reorganized and States of Bihar and Jharkand were created. Petitioner fell within the territorial jurisdiction of Jharkhand. Under Jharkhand Industrial Policy, 2001, benefit of exemption of sales tax on purchase of raw materials and on sale of finished goods has not been provided, but benefit of 'set-off' of sales tax has been provided to "new" as well as "existing industrial units". As per Clause 28.1 of the policy, new industrial units as well as existing units which are not availing any facility of tax-deferment or tax free purchases of tax free sales under any notification announced earlier, shall be allowed to opt for set off. The petitioner applied for and requested to 'set-off' the sales tax but no decision was taken by the respondent. A writ petition was filed in the Jharkhand High Court, which was dismissed and hence this appeal. Appellant contends that if it is held that units which were availing facility of tax-deferment will not be given benefit under Clause 28.1, the consequence will be that hardly any unit will get the benefit of Clause 28.1 because almost all the units of State of Jharkhand were enjoying the benefit of Sales Tax-deferment. Hence such an interpretation should be avoided. Held, since appellant was availing the facility of tax-deferment, appellant not entitled to benefit under Clause 28.1. Appeal therefore dismissed.
Delhi
Balbinder Singh Vs. Union of India (UOI) and Ors
The present writ petition was directed against the notice issued by the respondent No. 4 in exercise of the power conferred upon him under the CISF Rules, 2001 and the CISF (Amendment) Rules, 2003, seeking to terminate the services of the petitioner by giving him one month's notice. The petitioner’s services were terminated on the ground that the attestation form of the petitioner, which had been duly filled in by him at the time of his recruitment, has deliberately suppressed the factum of pending criminal proceedings against him in order to gain the appointment.
The petitioner was involved in a criminal case instituted under Section 420/461/468/471 of IPC at the time of filling the attestation form. The High Court observed that it was established from the records that the petitioner had entered the service by furnishing false information, which was false to his knowledge, and obtained appointment to the post by playing a fraud. Relying on the catena of judgments delivered by the Supreme Court and the High Court it was further observed that where the services of a person are terminated as a consequence of suppression of material facts,furnishing of false information, such a person is not entitled to invoke the jurisdiction of a court of law for the purpose of grant of relief to him. The common thread which runs through these decisions is that a person who seeks equity from the court must come to the court with clean hands, and he who comes to court with unclean hands or hards tainted with fraud would not be entitled to receive equity with the same hands. Since the petitioners failed to disclose material information to the Appointing Authority and as a matter of fact deliberately furnished false information to gain appointment, his termination could not be challenged on this ground. The writ petition was dismissed.
Lunarmech Machinenfabric Ltd. and Anr. Vs. USF Filtration Ltd. and Anr.
The respondent-plaintiff herein had filed a suit for perpetual injunction for restraining the petitioners from manufacturing, selling, advertising directly or indirectly CPF machines which are allegedly based on the engineering drawings of the plaintiffs. During the pendency of proceedings, the plaintiff has assigned its copy right in the subject matter of the present suit to Pall Corporation and executed a confirmatory agreement. Thereafter, the respondent - plaintiff sought amendment of the plaint for impleading the assignee of the copyright as a party in the suit, which was allowed by the Additional District Court. The present petition was sought for the dismissal of the suit and for dismissing the application for amendment of the plaint.
The main objection that was being raised by the defendants was that mere right to sue could not be transferred and the documents regarding transfer of the said rights etc. executed in a foreign country can not be taken note of courts in India without due authentication of the said documents. But the High Court opined that the only consideration for granting amendment is as to whether the amendment is necessary for deciding the real questions in controversy and as to whether any valuable right accrued to the defendants will be taken away by the amendment. Since the cause of action remains the same and since the matters, which have to be raised and decided after the amendment of the plaint, cannot be gone into at this preliminary stage of the amendment there lies no infirmity in allowing the application for amendment of suit. The established legal position is that the sale of shares or even giving the copyright to a particular party does not mean that the original owner of the copyright can no more continue the business. Since the suit was for alleged infringement of copyright and rendition of accounts and damages, the dismissal of suit also could not be ordered.
Jharkhand
Mukesh Kumar Verma v. The State of Jharkhand
The petitioner in this present petition has prayed for issuance of writ of mandamus directing the respondents, to appoint him in the post of constable and also allow him to join his duty as constable in Bokaro Police Force. The petitioner was denied appointment on the ground that one of the requirements in allowing appointment was not fulfilled as the examination passed by the petitioner was not equivalent to the matric examination. It was also pointed out by the respondents that the certificate of Prathma granted by the Hindi Sahitya Sammelan, Allahabad is not recognized by the Government of Jharkhand and hence, this certificate cannot be considered to be equivalent to matric.
The High Court however held that the notification of Government of India, Ministry of Human Resources Development recognized the certificate of Prathma examination from Hindi Sahitya Sammelan, Allahabad equivalent to matric for the purpose of service and so the circular of Government of Jharkhand not recognizing Prathma examination could not be upheld. The Court also directed respondents to appoint petitioner as constable striking down the action of respondents to be illegal.
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