IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH

S/SHRI Adarsh Kumar Goel and Ajay Kumar Mittal, JJ.

SHUBH TIMB STEELS LIMITED Versus UNION OF INDIA

C.W.P. No. 11597 of 2010 (O & M), decided on 22-11-2010

Renting of Immovable Property service- Retrospective amendment, validity of- Renting of immovable property itself made a taxable service as per amendment made by Finance Act, 2010 with retrospective effect from from 1-6-2007- well settled that competent legislature empowered to clarify or validate a law retrospectively and the same cannot be held to be harsh or arbitrary- object of validating law is to rectify defect in phraseology or lacuna and to effectuate and to carry out the object for which earlier law was enacted- Retro- spective amendment from 1-6-2007 in respect of amendment to taxable service of renting of immovable property, valid- Section 65 (105) (zzzz) of Finance Act, 1994. [Paras 5,8,9,23,26]
As per scheme under the Constitution discussed above subject of tax falling in power of a particular legislature in one aspect may fall within legis-lative power of another in other aspect. Such overlapping is unavoidable. Same transaction may involve two or more events in different aspects. There is distins-tion between general subject of legislation and taxation. The entries have to re-ceive liberal construction. If there is any overlapping doctrine of pith and sub-stance is to be applied and the Court has to look at the substance of the matter. List-I has priority over List-II though predominance of List-I does not prevent State Legislature from dealing matters under List-II
In view of above discussion, we are unable to hold that service tax on service of renting of property is exclusively covered by Entry 49 List-II. As already observed, Entry 49 of List-II relates to tax on land and building and not any activity relating thereto. Income tax on income from property, wealth tax on capital value of assets including land and building and gift tax on gift of land and building have been upheld. It cannot be held that renting of property did not involve any service as service could only be in relation to property and not by renting of property. Renting of property for commercial purposes is certainly a service and has value for the service receiver. Moreover the aspect of service element in renting transaction is certainly an independent aspect aspect covered under Entry 92C read with Entry 97 of List-I. In any case, subject matter of impugned levy being outside the scope of entry 49 of List-II power of Union Legislature is undoubted. Question whether levy will be harsh being in addition to income tax and property tax is not a matter for this Court once there is legislative compe-tence for the levy. Even if it is held that transaction of transfer of right in immov-able property did not involve value addition, the provision, the provision cannot be held to be void in absence of encroachment on List-II.
We now come to the aspect of retrospectivity. It is well settled that competent legislature can always clarify or validate a law retrospectively. It can-not be held to be harsh or arbitrary. Object of validating law is to rectify the de-fect in phraselogy or lacuna and to effectuate and to carry out the object for which earlier law was enacted.
In view of above, we do not find any ground to set aside giving of retrospective effect to the amendment from 1-6-2007 on which date levy was initially provided.

For full text of the judgement, pl. visit http://www.taxesinindia.com and click on  taxind_2010_hc_ph_cwp_11597

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS, SUPREME COURT JUDGEMENTS CONSTITUTIONAL VALIDITY, IMMOVABLE PROPERTY, SERVICE TAX

IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH, while dismssing the appeal filed by the CCEX LUDHIANA vs SANGRUR AGRO LTD. in C.E.A. No.40 of 2007, on 9.2.2010, it was held as follows: -

QUOTE: The short question is whether the respndent is liable to pay penalty and interest on the excess amount claimed by it ? The Commissioner [Appeals] as well as the Tribunalhave held that provisions of Section 11AC of the Central Excise Act are inapplicable as they relate only t short payment of duty, whereas the present case relates to reversal of the excess amount claimed by the respondent in terms of Rule 6(3)(b)  of the Cenvat credit rules. Apart from the above, a perusal of the language of Section 11AC  of the Central Excise Act shows that the same would be applicable only if in  cases where there is an attempt to evade duty. The present case relates to reversal of  amount under Rule 6(3)(b)  of the Cenvat Credit Rules. We are of the considered opinion that Section 11AC of the Central Excise Act is not applicable in the present case. The findings of the Appellate Tribunal are upheld. UNQUOTE

[for full text of the judgement, please visit http://www.taesinindia.com  and click on the citation taxind_2010_hc_ph_cea_40]

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS CENVAT CREDIT rULE 6(3)(B), SEC 11 AC

DELHI H.C. while deciding the writ petition no. 11435 of 2009 on 4.9.2009 in re: BRAHMAPUTRA INFRASTRUCTURE LTD. vs DELHI DEV. AUTHORITY observed as follows: -

QUOTE: This cannot be disputed that as to when a discretionary juridiction is to be exercised or refused to be exercised by the High Court, it is to be determined having regard to the facts and circumstances of the case. The Hig Court can entertain a writ petition if its is shown that there is something more which goes to the root of the jurrisdicionor something which would show that it would be a case of palpable injustice to the writ petitioner to forcehim to adopt the remedies provided unde the civil law. Admittedly in the present case the petitioner has not contended that, any provision of law is ULTRA VIRES and has not sought quashing of the same nor i can be infered that the denial of the alleged ppayment to petitioner of service taxand the interest thereon is in violation of any written agreement or is in violation of any principles of natural justice. In ABL INTERNATIONAL LTD vs EXPORT CREDIT GUARANTEE CORPN. OF INDIA LTD. [2004-3-SCC-553] it was held that the High Court having regard to the facts of he case, has a discretion to entertain or not to entertain the writ petition and it is the Court that has imposed upon itself certain restrictions in the exercis of this powr. UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com   and click on the citation taxind_2010_hc_del_wp_11435]

HIGH COURT JUDGEMENT

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HIGH COURT JUDGEMENTS isretionary jurisdiction, palpable injustice, root of the jurisdiction, ultra vires

DELHI HIGH COURT while deciding the W.P.(C) No.1210/2003 on 20.2.2010 in re: BRIG. V.K. ANAND vs UNION OF INDIA observed as follows:

QUOTE: When the two judges decided the writ petition under Article 226, which is in the nature of original proceedings, differed on a question of fact or law, reference to a third judge as contemplated is required to be made for disposal of the matter as per the majority opinion of the three judges/ [SEE RELIANCE INDUSTRIES LIMITED vs PRAVEENBHAI JASBHAI PATEL AIR 1997 SC 3892] . The issue referred to the third judge is whehe the petitioner’s trial by GCM was time-barred or not.  While deciding this issue the line of reasoning which may be adopted by the third judge may not be the same as adoped by either of the learned judges who made the reference. But that cannot be a reason for making a reference to a Full Bench. We are afraid such a course is not permissible under the Rules. We, therefore, remit the mater back to the learned single judge with a request to decide the refrence expeditiously. UNQIOTE

[for full text of the judgement, please visit http://www.taxesinindia.com  and click on the citation taxind_2009_hc_del_wpc_1210]

HIGH COURT JUDGEMENT

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HIGH COURT JUDGEMENTS Article 226, REFERENCE TO THIRD MEMBER

IN THE HIGH COURT OF DELHI, while deciding on 29.8.09 the Writ Petition (Civil) No. 1793 of 3008 in re: VIRENDER KUMAR YADAV vs UNION OF INDIA, it was observed as follows:-

QUOTE: From various judicial pronouncements on this issue, the position which emerges is that the Tribunal while considering any application for waiver of deposit is to take into account firstly the existence of a PRIMA FACIE case. In case, it is found that a party has a very strong PRIMA FACIE case, and / or where the errors in the impugned order are writ large on the record, in such a case, it would be competent for the Court in the exercise of its jurisdiction to grant waiver of pre-deposit since in such a case requiring a pre-deposit itself would amount to UNDUE HARDSHIP. There is no denying of the fact that while dealing with the application for stay it is neither desirable nor proper for the Tribunal or any other authority to embark upon a detailed inquiry to find out whether the stand of the applicant before it is correct or not because expression of any opinion on merits at that juncture, without full-fledged hearing and consideration of entire material, is likely to cause prejudice to either side. But at the same time, the authority concerned is required to consider whether with reference to the material placed before it, a PRIMA FACIE case for grant of stay is made out or not and the balance of convenience lies in whose favour. UNQUOTE

[for full text of the judgement, please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_del_wpc_1793]

HIGH COURT ORDER

[EDITOR's NOTE:  This judgement of the Delhi High Court re-emphasises what a quasi-judicial authority as well as a Tribunal shall keep in mind while considering an application for grant of stay of any order which is under appeal, from the aggrieved party [whether it is the Dept. of Revenue or the asseessee / importer]. In fact, this is how the appellate / revisionary authorities as well as the Tribunal benches [since its inception in 1982] have been dealing with the stay applications. If this practice continues, then, lot of relief would be available to the aggrieved persons and their confidence on their application on merits being dealt with by the adjudicating forum would also increase. SATHYAMEVA JAYATHE]

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HIGH COURT JUDGEMENTS DISPENSATION, ERROR IN ORDER MANIFEST ON RECORD, PRE-DEPOST, PRIMA FACIE, STAY, UNDUE HARDSHIP

IN THE HIGH COURT OF JUDICATURE AT BOMBAY, while deciding on 24.9.09 the Customs Application No.9 of 2001 in re: COMMR. OF CUS. [PREVENTIVE] vs LEELA SCOTTISH LACE PVT. LTD, it was held as follows:-

QUOTE: It would be clear that what the Supreme Court has held that Clause (o) of Section 111 of the Act contemplates confiscation of goods which were exempted from duty subject to a condition which is not observed by the importer within the time prescribed. The occassion for the action under this clause arises only when the condition is not observed within the period prescribed. In the instant case, the respondents had not cleared the goods. The Bill of Entry was filed by some other person. Therefore, the question of breach of condition by the respondents would not arise. What Section 111(o) of the Act reiterates is “the condition is not observed”. The stage for observing the condition had not yet arisen as the goods themselves had not been clered by the respondents. In our opinion, therefore, the learned Tribunal was right in placing reliance on the judgement of the Supreme Court in the case of SAMPAT RAJ DUGAR [UNION OF INDIA vs SAMPAT RAJ DUGAR - 1992-58-ELT-163-SC] UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_bom_cusa_9]

HIGH COURT ORDER

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HIGH COURT JUDGEMENTS confiscation, CUSTOMS ACT 1962, PENALTY, SEC 111(O)

IN THE HIGH COURT OF DELHI, the C.M. No. 1180 of 2008 in ITR 23 of 1989 was decided on 23.10.2009 in re: COMMR. OF INCOME TAX vs MMTC OF INDIA, with the following observations: -

QUOTE: We are of the view that the application is without merit, for more than one reason. First, the right to file a reference is conferrd  by the statute, the judgement of the Supreme Court does not seek to take away this right. A careful analysis of OIL & NATURAL GAS COMMISSION vs COLLECTOR OF CENTRAL EXCISE [1994-70-ELT-45  = 2004-6-SCC-437] and those which preceded and followed it, would show that they injunct  the prosecution of an action where two entities of the State are involved. If a reference is filed without , an approval it cannot be held, as not being maintainable. In somewhat similar circumstances where an issue arose with respect to interpretation of Section 171 of the Indian Cpmpanies Act, 1913 as regards as to what, would be the position in respect of a suit or proceeding which is instituted by an official liquidator without the leave of the court, as mandated by the said provision. The Supreme Court, held that, a suit or a proceeding instituted without the leave of the court may be ineffectiveuntil leave is obtained, but once leave is obtained the proceedings “will be deemed instituted on the date granting leave.” [See: BANSIDHAR SHANKARLAL vs MOHD. IBRAHIM -- 1971-41-Com. Cases-21-S.C.]. Second, in view of the fact that it is not disputed that the judgement of a Division Bench of this Court, in  CIT vs NATIONAL AGRICULTURAL CO-OPERATIVE  MARKETING FEDERATION F INDIA LTD. [1999-236-ITR 766 ] covered the issue raised in the reference, the Committee on Disputes could have either prevailed upon the assessee to comply, or in the alternative, give permission to the department, to file a reference. There was no third alternative available with  the Committee on Disputes. Third, we are of the view that the reference to the Committee on Disputes is mandated only if a dispute exists. In the absence of such a circumstance, there was no occassion to approach the Committee on Disputes for approval; as the issue raised was not RES INTEGRA. Lastly, the State and/or its instrumentalities do not frittere away valuable funds, and clog the courts with disputes which perhaps can be resolved inter-departmentally. In the instant situation, where the court has already provided the answer, to the issues raised in the reference, an approval for filing the reference was not a pre-requisite – since all that the reference sought to achieve was to bring the mpugned judgement in line with an earlier decision of this Court. If we are to take a strict view of the matter, the institution of the instant review application ought to have had the approval of the Committee on Disputes. Which, it does not have. UNQUOTE

[for full text of the judgement, please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_del_cm_11880]

[Editor's note: This Delhi High Court order becomes binding on both the Revenue authorities and the Public Sector Unit assessees as also the High Powered Committee on Disputes which is required to grant necessary clerance/ reject the C.O.D. application, to incorporate / to insist incorporation , in each COD application the facts regarding the availability or otherwise of any Court orders directly applicable to the matters covered by the respective COD application, so that the HPC may  straightaway give the clearance or direct the COD applicant to re-confirm as to whether the subject matter of the dispute is or is not covered by any court orders. In this process, the HPC can grant clearance in covered cases, without much time taken before the HPC , for arguments on either side.]

HIGH COURT ORDER

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS COMMITTEE ON DISPUTES, ENTITIES OF THE STATE, INJUNCT THE PROSECUTION

IN THE HIGH COURT OF JUDICATURE OF BOMBAY AT GOA, while deciding on 27.3.2008 the Criminal appeal no. 39 of 2006 in re: ASST. COMMR. OF CUSTOMS [PREV.], GOA vs ANTHONY SEBASTIAN L D’SOUZA,  it was observed as follows:-

QUOTE: A peruslal of the judgement clearly supports the contention of the appellant that there is no discussion of the evidence of investigating officer. The learned Trial Judge has merely stated : “P.W. 5 has investigated the case.” in the judgement in para 11. The learned Trial Judge is the Chief Judicial Magistrate, Margao. It is difficult to understand how the learned Chief Judicial Magistrate could have made a statement like that and rested, though he was bound by his duty as a Magistrate trying the offence, to consider the evidence adduced by the prosecution. Indeed the credibility of criminal Courts trying an offence rests on discussion of the evidence brought by the prosecution and the reasonings of the Court thereon. There is complete dereliction of duty by the Magistrate in discussing material evidence adduced by the prosecution in a case which requires serious consideration. This dreliction of duty has resulted in an acquittal of the respondent which PRIMA FACIE appears to be unjustified. UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2008_hc_bom_cra_39]

HIGH COURT DECISION.

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS complete derelictgion of duty, credibility of criminal courts

ON TUESDAY [21.12.09] the DELHI HIGH COURT asked the Mobile Phone opertors to ensure that unsolicited commercial calls made by the companies or banks are reduced and eventually ended. The Bench directed operators to follow guidelines laid down by the Telecom Regulatory Authoirty of India [TRAI] on the subject.

The High Court was hearing a petition filed by the Cellular operators Association, which challenged the State Consumer Commission’s order in favour of Nivedita Sharma, a lawyer who had received an unsolicited business call from a bank. The consumer Court had directed the ICICI Bank and AIRTEL to pay Rs. 50,000 compensation to Sharma. The Court is expeced to give its final verdict on JANUARY 8, 2010.

[source: THE EXPRESS NEWS SERVICE, N. DELHI]

OUR COMMENTS:-

1. LET THE ALMIGHTY GIVE THE JUDGES OF THE DELHI HIGH COURT THE COURAGE OF CONVICTION TO COME DOWN HEAVILY ON THE MISCHIEVOUS BANKS LIKE ICICI AND THE CELLULAR PHONE OPERATORS LIKE AIRTEL / AIRCEL WHO ARE BEHIND SUCH UNHEALTHY PRACTICES ADOPTED BY THEM IN THE GUISE OF COMPETITIVE MARKETING STRATEGIES.
2. LET OTHER BANKS LIKE HDFC, ABN AMRO, CITIBANK, AMERICAN EXPRESS etc AND LIKE WISE THE OTHER CELLULAR OPERATORS LIKE RELIANCE, VODAFONE etc. TAKE THIS MATTER SERIOUSLY AND END THEIR UNHEALTHY MARKETING STRATEGIES [Someone is loudly shouting from behind that it is the RELIANCE INFOCOM which cultivated such bad habit in the beginning - may be true]
3. LIKE THE ADVOCATE WHO RAISED THIS ISSUE BEFORE THE CONSUMER COURT, LET ALL CELL PHONE USERS GET UNITED AND FIGHT AGAINST THE UNHEALTHY MARKETING PRACTICES ADOPTED BY THE PRIVATE BANKS AND CELL PHONE OPERATORS.
4. LET THIS BE A GOOD LESSON FOR THOSE PRIVATE COMPANIES IN OTHER SECTORS WHO ARE ALSO ADOPTING SUCH UNHEALTHY MARKETING CAMPAIGNS, HARASSING THE CONSUMERS, DAY IN AND DAY OUT.
5. LET TRAI ALSO WAKE UP TO ACT TOUGH WITH THE CELL OPERATORS

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS PRIVATE BANKS, PRIVATE CELL OPERATORS, UNHEALTHY MARKETING PRACTICES

IN THE HIGH COURT OF JUDICATURE AT BOMBAY, while deciding on 19.11.09 the writ petition no. 8185 of 2009 in re: TATA MOTORS LTD vs UNION OF INDIA, it was observed as follows:-

QUOTE: We are at pains to understand the approach of the learned Tribunal. Judgements of high Courts considering judicial discipline have to be followed by the Courts subordinate to the high Court. Failure to do so would result in JUDICIAL MAYHEM. Subordinate courts are bound to follow the judgements unless there be a subsequent judgement of a Higher Court which has taken a view different from the view earlier expressed. In this case, we find that the judgement in the case of AMRIT PAPER vs COMMR. OF C.EXCISE, LUDHIANA [2006-200-ELT-365-SC] cannot be said to have decided the controversy of availing Cenvat credit for jobwork. UNQUOTE

[for full text of the judgement please visit http://www.taxesinindia.com and click on the citation taxind_2009_hc_om_8185]

HIGH COURT ORDERS

VENKATRAMAN RAGGHUPATHY, Web admin.

HIGH COURT JUDGEMENTS HIGHER COURTS, JUDICIAL DISCIPLINE, JUDICIAL MAYHEM, SUBORDINATE COURTS