SUPREME COURT

• LABOUR AND INDUSTRIAL LAWS

Vijaya Bank v. Shyamal Kumar Lodh (Decided on 06.07.2010) MANU/SC/0430/2010

Jurisdiction of Labour Court - Challenged thereto - Section 7, Industrial Disputes Act, 1947 - Whether Labour Court had jurisdiction for deciding the award computing suspension/subsistence allowance under Section 33C(2), Industrial Disputes Act?

Held, Labour Court constituted under section 10A(2) of Industrial Dispute Act 1947 and within the local limits has jurisdiction to decide any dispute regarding subsistence allowances and the Labour Court where the workman had brought the action has been constituted under Section 7 of the Industrial Disputes Act, 1947 and further the appellant bank is situated within the local limits of its jurisdiction. The workman had, though, chosen to file application under Section 33C(2) of the Industrial Disputes Act but that in Court's opinion shall not denude jurisdiction to the Labour Court, if it otherwise possesses jurisdiction. Incorrect label of the application and mentioning wrong provision neither confers jurisdiction nor denudes the Court of its jurisdiction. If Relief sought and if falls within the jurisdiction of the Court, it can not be thrown out on the ground of its erroneous label or wrong mentioning of provision.

• CONSTITUTION LAWS

Rasid Javed & Ors. etc. v. State of U.P. & nr. etc. (Decided on 05.07.2010) MANU/SC/0423/2010

Motor Vehicles -Validity of modified Notification challenged -Whether modified Notification by Authority under Section 21 of the General Clauses Act is valid and does not suffer from any legal flaw under Section 102(1) of the Motor Vehicles Act, 1988?

Held, the Notification modified in the same manner as the earlier Notification. Authority empowered to issue notification and exercise its power to rescind notification in the like manner under Section 21 of the General Clauses Act. So the modified Notification is valid .Even earlier notification published by the the State Government, in exercise of the powers under sub-section (1) of Section 102 of the 1988 Act proposed to make modification in the 1993 Scheme to the extent mentioned in column 4 of the Schedule. Contention of Counsel that the opportunity of hearing was required to be given to the appellants before issuance of modified Notification has no merit for more than one reason. For one, this contention is founded on the premise that the order of the Hearing Authority is the order of the State Government.

• SERVICE LAWS

Union of India & other v. Ajay Wahi (Decided on 06.07.2010) MANU/SC/0429/2010

Disability Pension - Claim under Regulation 50 of the Pension Regulations - Whether in case of falling health affecting performance of military service an officer is entitled for disability pension?

Held, when officer is invalided out of service on account of disability attributable to military service or aggravated thereby he is entitled for disability pension and should not be entitled for disability pension in case of voluntary retirement. unless it is found and held that the officer deserved to be invalided out of service on account of disability attributable to military service but the same was not granted to him for unjustified reasons and forced to seek voluntary retirement.

• MOTOR VEHICLES LAWS

State of West Bengal & Ors. v. S. K. Nurul Amin (Decided on 05.07.2010)

Interpretation of Statute - Sub-section (1) of section 72 of Motor Vehicles Act, 1988 - Whether Authority acted rightly by granting the permanent stage carriage permits in regard to the routes for which the applications were made, but with a modification, by curtailing the routes for which the permits were applied?

The interpretation by the High Court is without basis. What is prohibited by the proviso to sub-section (1) of section 72 is granting of a permit in respect of any route or area not specified in the application. The said proviso does not prohibit curtailment in regard to portion of the route applied for, for any valid reason. In fact sub-section (1) specifically authorizes the Authority to grant the stage carriage permit with such modifications as it deems fit. Curtailment of a route would be a modification as contemplated under sub-section (1). Curtailment, as in the instant case, was a modification, which was permitted and authorized by section 72(1) of the Act. The Division Bench of the High Court was not therefore justified in holding that the grant of a permit for a route with any curtailment would be a violation of Section 72(1) of the Act.

• CRIMINAL LAWS

Chunni Lal v. State of U.P. (Decided on 05.07.2010)

Murder - Guilty - Whether the accused who absconded after the incident and surrendering after thirteen days of the occurrence of incident is guilty of the offence alleged against him under Section 302 IPC?

Held, the fact that the accused ran away from the place of occurrence and was not traceable thereafter in the village and the fact that he surrendered after thirteen days of the incident clearly indicate that the appellant was guilty of the offence alleged against him the accused has been rightly convicted of the offence under Section 302 IPC. Delay was reasonable.

• EXCISE LAWS

CCE, Delhi. v. M/s Pearl Drinks Ltd. (Decided on 06.07.2010)

Doctrine of Merger - Sections 4, 35(L)(b) &35(E)1 of the Central Excise Act, 1944 - Whether the Appeal filed by Revenue can be dismissed on application of Doctrine of Merger when appeal of Assessee already stands decided?

Held, Doctrine of Merger will depend largely on the nature of the jurisdiction exercised by the superior court and the content or subject matter of challenge before it . Further, Tribunal in Assessee's appeal was concerned only with justification in disallowing deductions under two heads Tribunal had no occasion to examine remaining deductions under challenge in Revenues appeal Therefore Doctrine of Merger wrongly applied by Tribunal to dismiss Revenue's appeal.

• INCOME TAX LAWS

CIT v. Walfort Share and Stock Brokers (Decided on 06.07.2010)

Loss during the course of dividend stripping transaction - Disallowance of loss on acquisition of an asset - Challenged thereto - under Section 10(33) and Section 94(7) of Income Tax Act1961- Whether the loss during dividend stripping transaction was sham or bogus or the entire loss was a fictitious or fiscal loss?

Held,the effect of Section 94(7) of Income Tax Act1961 is that only losses to extent of dividend have to be ignored by the Assessing Officer and not the entire loss. Losses over and above the dividend are still allowable even after Section 94(7) of Income Tax Act1961. This shows that Parliament has not treated the dividend stripping transaction as sham or bogus or the entire loss as a fictitious or fiscal loss. If the argument of the Department is to be accepted, it would mean that before the entire loss would be disallowed as not genuine but, after a part of it would be allowable under Section 94(7) which can never be the object of Section 94(7). For attracting Section 14A, there has to be a proximate cause for disallowance, which is its relationship with the tax exempt income, which is absent in the present case. As regards the reconciliation of Sections 14A and 94(7), the two operate in different fields. Section 14A deals with disallowance of expenditure incurred in earning tax-free income while Section 94(7) refers to disallowance of loss on acquisition of an asset

HIGH COURT

• INCOME TAX LAWS

DELHI HIGH COURT

Rajan Gupta v. CIT (Decided on 05.07.2010) MANU/DE/1589/2010

Notice issued under Section 143(2) of Income tax Act, 1961-Block assessment order under Section 158BC (c)- Whether the notice under Section 143(2) of the Income Tax Act, 1961 was issued beyond the prescribed period of limitation and as a consequence thereof the block assessment order under 158 BC(c) of the said Act was bad in law?

Held, a notice under Section 143(2), where the Assessing Officer does not agree with the block return filed by an Assessee in block proceedings, is a mandatory requirement of law and it must be served upon the Assessee within the period stipulated in the proviso to Section 143(2) of the said Act. If that is not done, the block assessment order passed pursuant thereto would be invalid and would not be a mere irregularity.

Therefore after analyzing the relevant provisions the Court observed that since the notice under Section 143(2) was issued beyond the prescribed period of limitation, the block assessment order under Section 158BC(c) of the said Act made in pursuance of such a notice was bad in law

• SERVICE LAWS

DELHI HIGH COURT

Joginder Singh v. Govt. of NCT of Delhi & Ors. (Decided on 07.07.2010) 

Departmental Promotion - Challenged Promotion on the ground of misconduct or misdemeanor - Whether act of misconduct or misdemeanor was panel for promotion?

Held, relying on the cases State of TN .v. P.Bose and S.L. Chabra V/SM (Retd) Air Vice Marshal .v. UOI, the post of Inspector of Police being a pivotal post in a uniformed service must be filled in by person of integrity and devotion to duty and internal discipline and anyone who has betrayed a tendency to ignore the same in the immediate past cannot aspire for promotion.

• EXCISE LAWS

DELHI HIGH COURT

Qualimax Electronics Pvt. Ltd. v. Union of India (UOI) and Ors. (Decided on 02.07.2010) MANU/DE/1324/2010

Adjudication - Settlement Commission - Whether the "case" of the Petitioners had been "adjudicated" prior to the filing of their settlement applications under Section 32E of the Act?

Held, the date of receipt of the order-in-original is not of any significance for the purposes of Section 32E of the Act - What is of prime importance is the date on which the order-in-original was despatched from the office of the adjudicating authority - Once, the order leaves the hands of the adjudicating authority, the 'case' can no longer be said to be pending before him - Hence, the "case" of the petitioners had been "adjudicated" prior to the filing of their settlement applications under Section 32E of the Act .

ALLAHABAD HIGH COURT

Parmarth Iron Pvt. Ltd. thru Director Lalit Agrawal v. Commissioner of Central Excise-I and Anr. (Decided on 15.06.2010) MANU/UP/0380/2010

Show Cause Notice - Principles of Natural Justice - Petitioners were not supplied with the hard copy of the documents relied upon in the Show Cause Notice but were given a C.D - Whether non furnishing of hard copy of relied upon documents would affect the right of Petitioner to defend itself ?

Held, that the relied documents or copies thereof must be furnished to enable the petitioner to plead its case effectively and defend itself . Ratio in Tribhuvandas Bhimji Javeri v. Collector of Central Excise 1997 (92) E.L.T. 467 (SC), affirmed Non return of the documents by the authorities may severely prejudice the right of the party to offer the proper explanation and to that extent the Principles of Natural Justice may stand violated. Further, directed that petitioner be allowed opportunity of cross-examining relied upon witnesses .

TRIBUNAL

• INCOME-TAX LAWS

Pirojsha Godrej Foundation v. Assistant Director of Income Tax (Exemptions) -Circle II (1) Mumbai (ITAT, Mumbai) (Decided on 31.05.2010)

Income Tax return-Exemption available under Section 10(23C) of Income - Tax Act, 1961- Notice served under Section 148 of Income - Tax Act, 1961 - Whether reasons for reopening the assessment have been recorded without application of mind and without considering the applicable legal position?

Held, It was held that there was no cause and effect relationship with what the Assessing Officer has noticed in the attachments to the income tax return, and the conclusion that he has arrived at. The learned CIT(A) erred in confirming and the Assessing Officer erred in holding that the provisions of Section 11(5) read with Section 13(1)(d) of the Act were violated in respect of investment made. Also when the reopening was with in four years and the income tax return was processed under Section 143(1) as well, the touchstone to be applied was that it was not necessary to establish that there has been an escapement of income, but essentially there have to be valid reasons to believe that income has escaped assessment and these reasons, on standalone basis, must be considered appropriate for arriving at the conclusion arrived at by the Officer recording the reasons. It was held that reassessment proceeding, on the facts of this case and on the basis of reasons recorded by the Assessing Officer, was bad in law and hence it was quashed.

Dy. Commissioner of Income-tax Circle 1(3) Mumbai. v. M/s.Times Guaranty Limited (ITAT, Mumbai) (Decided on 30.06.2010.)

Income Tax return- Unabsorbed depreciation-Whether the unabsorbed depreciation could be set off against income under the head "Income from other sources" for the relevant assessment year?

Held, Unabsorbed depreciation allowance arose in the second period, i.e.assessment years 1997-98 to 1999-2000 which could not be adjusted against the income under the head ''Profits and gains of business or profession'' up to assessment year 2002-2003. Unabsorbed depreciation allowance as generated during the second period cannot have a set off against income under the head ''Income from other sources'' in the third period. Assessee now cannot claim set off of such unabsorbed depreciation allowance against income under any head other than "Profits and gains of business or profession" in the years under consideration. As the Assessee is seeking to claim the set off of such brought forward unabsorbed depreciation allowance against income under the head ''Income from other sources'', that was not acceptable. In view of the foregoing reasons it was observed that opinion that the learned CIT(A) held erred in not correctly interpreting the law in this regard. The impugned order was thereby vacated and the action of the Assessing Officer was restored in both the years under consideration.