Recently Supreme Court set aside the judgement of the Allahabad high court which had granted exemption from trade tax to a firm which was engaged in the manufacture and sale of various scientific and biological equipment used by scientists for research purposes. In the case, Commissioner of Trade Tax vs Kartos International, the revenue authorities demanded 10 per cent tax, but the company challenged it invoking a 2000 notification arguing that it was entitled to the benefit under the Central Sales Tax and also because it was engaged in inter-state sales made to various government institutions. The Supreme Court ruled that the company was not entitled to the benefit as the notification covered maps, educational charts, mechanical drawings and biology equipment used in schools and colleges. Goods used by research institutions are not eligible for the tax benefits, the court ruled.
The Karnataka Industrial Areas Development Board was wrong in raising the price of industrial plots arbitrarily, the Supreme Court stated while dismissing its appeal against the high court ruling. The board had allotted plots after receiving payment. But 13 years later, it asked the allottees to pay more. This was challenged by the allottees. The board claimed that it has power under the rules to raise the demand.
If the owner of a motor vehicle has shown due diligence while appointing a driver and examined his licence, the insurance company cannot deny the insured amount on the ground that the licence was fake. The ruling of the National Consumer Commission to the contrary in the case, Mrs Rubi Dutta vs United India Insurance Co, was set aside by the Supreme Court and the company was asked to pay Rs 2.70 lakh as compensation for the damage to a bus in an accident. The insurer argued that the driver’s licence was fake. But it was a duplicate issued after following the legal procedure. The court stated that at the time of giving employment to the driver, “the owner of the bus must have examined the licence issued to him and after satisfaction thereof, he must have been given employment. Nothing more was required to have been done by the owner. After all, at the time of giving employment to a driver, owner is required to be satisfied with regard to correctness and genuineness of the licence he was holding. After taking the test, if the owner is satisfied with the driving skills of the driver then, obviously, he may be given an appointment.”
Glodyne Technoserve Ltd. Vs. State of M.P. & Ors. (Supreme Court) – The Supreme Court has dismissed the appeal of Glodyne Technoserve Ltd, which had bid for a project for issuing identity cards for the public distribution system in Madhya Pradesh. The government rejected it offer as it did not produce the latest ‘quality certificate’ with the bid document. The firm argued that it did have the latest certificate and therefore it was eligible to be considered. It also contended that the requirement for producing the latest certificate was added later by the government in a corrigendum to the bidder check list. Rejecting these arguments, the Supreme Court stated that in such circumstances, the authority inviting bids has the discretionary power to accept the bid or not. The decision can be quashed only if it was proved to be arbitrary or perverse. In this case, it was neither, the court declared.
The Supreme Court last week directed Glaxo India Ltd to deposit Rs 71.21 crore in the Drug Prices Equilisation Account, asking it to comply with the demand of the government. The central government had issued drug price control orders under the Essential Commodities Act fixing the maximum selling price of bulk drugs. Those notifications were challenged by the pharma company as arbitrary and illegal. The Supreme Court allowed the appeal of the government and stated that several drug companies were overcharging the consumers and the notifications were meant to control prices to benefit consumers.
The Supreme Court has stated that the debt recovery appellate tribunal has no power to exempt a defaulter from making a pre-deposit before entertaining his appeal under the Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest Act. In this case, Narayan Chandra vs UCO Bank, the tribunal granted exemption. The Calcutta high court set aside the order. He appealed to the Supreme Court which upheld the high court ruling.
Commissioner of Commercial Taxes & Ors. Vs. Chitrahar Traders- The buyer of Neyveli Lignite Corporation, a central government undertaking which was sold as scrap, was entitled to pay a lower sales tax, the Supreme Court ruled. It dismissed the appeal of the Commissioner of Commercial Taxes against the ruling of the Madras high court which stated that the levy should take into account that the machinery was total scrap. Since the plant and machinery had outlived its utility, the government appointed Metal Scrap and Trading Corporation Ltd, a government enterprise, to sell them as scrap. It arranged an e-auction in which Chitrahar Traders bid the highest amount. The revenue department then demanded 12 per cent and surcharge as sales tax stating that what was sold was plant and machinery; not scrap. The buyer contended that only 4 per cent could be levied at the rate stipulated for scrap. In fact, it had to use explosives to remove machinery embedded in earth since 1961 and which became utterly useless by 2001. The high court and the Supreme Court accepted the contention of the scrap buyer.
The Supreme Court has dismissed the appeal of New India Assurance Company which had rejected the claim of a ship-breaking firm for compensation. The firm bought a Belgian vessel and was bringing it from Singapore on its ‘funeral voyage’ to Alang port in Gujarat for demolition. It wrecked on way in high seas due to bad weather. The ship was covered by marine insurance and the ship-breaker invoked the policy. The insurer rejected the claim leading to litigation in the consumer forum. The National Consumer Commission asked the insurance company to pay Rs 14 crore with 9 per cent interest to Priya Blue Industries, the scrap dealer in ships. However, the insurer appealed to the Supreme Court. It ruled that the loss suffered due to the ship wreck was properly assessed by the surveyors and the commission order was correct.
Siddachalam Exports Private Limited vs Commissioner of Central Excise, Delhi-III [SUPREME COURT OF INDIA- Duty drawback – goods had been over-valued with the intention of claiming undue draw-back amounts – instead of first determining the value of the goods on the basis of contemporaneous exports of identical goods, the Revenue erroneously resorted to a market enquiry – contemporaneous exports of identical goods was not available, the procedure laid down in Rules 5 to 8 of the 1988 Rules was required to be followed and market enquiry could be conducted only as a last resort – in the absence of any other independent evidence relating to market enquiry, there was no other corroborating evidence to support the allegation of inflation in FOB value – the matter is remitted back to the adjudicating authority for fresh consideration in accordance with law.
K.K. Velusamy Vs. N. Palanisamy (Supreme Court) – A compact disc containing recording of telephone conversation could be valid evidence according to Section 3 of the Evidence Act and Section 2(t) of the Information Technology Act, the Supreme Court has stated in the case, K K Velusamy vs N Palanisamy. One of the parties in a suit over sale of property produced a CD in the court as evidence. The opposite party objected to its validity as evidence, arguing that the recordings were created with the help of mimicry specialists. In this context, the Supreme Court stated that electronically recorded conversation is admissible in evidence, if the conversation is relevant to the matter in issue and the voice is identified and the accuracy of the recorded conversation is proved by eliminating the possibility of erasure, addition or manipulation. A CD recording of a relevant conversation is comparable to a photograph of a relevant incident.
