An assessee of service tax can enter into a contract to shift the liability to another party, the Supreme Court ruled last week in its judgment, Rashtriya Ispat Nigam Ltd vs M/s Dewan Chand. In this case, the public sector steel manufacturer engaged the latter as its handling contractor for transportation of goods. The agreement provided that “the contractor shall bear and pay all taxes, duties and other liabilities in connection with the discharge of his obligations.” Applying this clause, the PSU deducted service tax from the bills of the transporter. The latter objected to this which led to a dispute before an arbitrator. He dismissed the claims of the transporter. However, the Bombay high court held that the arbitrator was wrong. Therefore, the PSU appealed to the Supreme Court. It overruled the high court, observing that “there was nothing in law to prevent the company from entering into an agreement with the transporter that the burden of any tax arising out of obligations under the contract would be borne by the transporter.” Moreover, court should not interfere in an arbitral award by substituting its judgment for that of the arbitrator if two views are possible.
Bounced cheque can lead to 2 charges
Issuing a cheque which is dishonoured by a bank can lead to two separate criminal proceedings, one under Section 138 of the Negotiable Instruments Act and another for cheating or breach of trust under the Indian Penal Code. The Supreme Court stated that they can proceed independently of each other, in the case, Sangeeta Ben vs State of Gujarat. In this case, the person who issued the cheque was convicted and later acquitted under the cheque law. However, there was another case for cheating. The accused moved the Gujarat high court arguing that she cannot be tried again on the same offence as it would amount to abuse of process of law. The high court dismissed the petition and allowed the cheating case to proceed. Her appeal to the Supreme Court was also dismissed.
Higher damages for self employed
The Supreme Court has enhanced the compensation to the widow and dependents of a person who was killed in a road accident, ruling that the future earning capacity of the deceased should also be taken into account while calculating the loss of income to the family. In this case, Santosh Devi vs National Insurance Company Ltd, the deceased person was running a milk dairy. The motor accident claims tribunal awarded the family Rs 1.32 lakh in all. The Punjab and Haryana high court enhanced it to 1.77 lakh. The court took the view that the deceased head of family was 45 years old when he died and his income was not likely to increase like employed people as he was in a steady business. The Supreme Court rejected this view and said that it was not merely employed people whose income went up with years; even self-employed persons earn higher income with time. This fact should be taken into account while computing compensation, the court said while awarding Rs 3.17 lakh.
NTPC plea in arbitration dismissed
The Delhi high court last week dismissed the appeal of the National Thermal Power Corporation (NTPC) against the arbitral award against it in its dispute with Siemens Atiengesellschaft. NTPC challenged the award passed by the International Court of Arbitration Tribunal of the International Chamber of Commerce by which NTPC had been directed to pay Siemens Aktiengesellschaft ('SAG') Euro 17,158,557 on account of rejected claims with interest amounting to Euro 7,604,296. The total liability without calculating interest was approximately Rs 174 crores. Disputes arose between the two corporation over NTPC award of a contract to SAG in 1989 for the Gas-Based Combined Cycle Power Project of 817 MW at Dadri, Uttar Pradesh. There were allegations of delay in the opening by NTPC of the letters of credit which in turn led to delays during the execution of the first open cycle.
Postal authorities appeal dismissed
The National Consumer Commission has dismissed the appeal of the postal authorities rejecting their argument that its liability for articles lost in transit was limited to double the postal charges. They also contended that under Section 6 of the Indian Post Office Act, they cannot incur any liability by reason of “loss, mis-delivery or delay of, or damage to any postal article in the course of transmission by post.” In this case, Superintendent of Post Office, Bangalore vs Manjit Kaur, the latter sent marriage material in a parcel to Jalandhar which did not reach the addressee. The postal authorities offered only Rs 240, double the postal charges. She moved the district consumer forum which awarded her Rs 15,000. The state commission upheld it. Dismissing its appeal, the national commission stated that “merely taking the plea that article has been lost in transit is of no help to the authorities. They have to establish about the actual loss of the article and also prove which point or place, the article in question was lost but the same has not been done in this case.”
The Gujarat government on Wednesday said that over 18 per cent of the projects, for which memorandums of understanding (MoUs) were signed during the ...
General Council remains suspended