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Citation – REVANASIDDAPPA & ANOTHER VERSUS MALLIKARJUN & OTHERS (SC) – Section 16(3) of the Hindu Marriage Act as amended, does not impose any restriction on the property right of Illegitimate Child except limiting it to the property of their parents. Therefore, such children will have a right to whatever becomes the property of their parents whether self acquired or ancestral.
Glass bottles used by a soft drink company are “fixed capital investment” and are exempted from trade tax, the Supreme Court ruled in the case, Commissioner of Trade Tax, Uttar Pradesh vs Varun Beverages Ltd. However, crates used to carry the bottles are not fixed capital investment, the court added. The argument of the soft drink company was that it was entitled to exemption for all fixed capital investment including land, building, apparatus, components and equipment which are necessary for the establishment and running of the factory. The Allahabad high court agreed with the contention, stating that for the manufacture of soft drinks, bottles and crates are essential equipment, especially in a captive industry where the liquid is prepared and collected by way of a continuous process in bottles and thereafter kept in crates. But the revenue authorities appealed to the Supreme Court. It held that bottles were exempted, but not the crates.
The Supreme Court last week ruled that Industrial Finance Corporation of India is a ‘public financial institution’ under Section 4A of the Companies Act and it was entitled to invoke the Securitisation Act to enforce a “security interest”. Upholding the view of the Delhi high court in the appeal case, Bharat Steel Tubles Ltd vs IFCI, the apex court stated that the conversion of the IFCI into a company did not alter its position and status as a financial institution in view of Section 5 of the Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act. All matters, including all benefits, relating to the corporation, stood wholly transferred in favour of the new company.
Sales Tax – Indirect Tax – U.P. Trade Tax Act, 1948 – Central Sales Tax Act, 1956 – Exemption – Notification No. 1166 dt. 10.4.2000 – Assessee, engaged in the manufacture and sales of various ‘scientific and biological equipments/instruments’, claimed goods sold by it were exempted from tax in view of the notification no. 1166 – Assessing Authority (AO) held that the assessee was not entitled to get exemption under the aforesaid notification and the impugned goods of the assessee were liable to be taxed at the rate of 10% as unclassified goods
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.
