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| Supreme court pulls up revenue department |
| BS Reporter / New Delhi Feb 01, 2010, 02:30 IST |
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The Supreme Court has criticised the revenue departments for ignoring its recommendation on imposing duty on products and goods. It had asked the authorities, while imposing customs, excise or income tax, to examine the process applicable to the product in question and not to go by dictionary meanings. “This recommendation is not being followed over the years,” the court stated in the judgment, Commissioner of Income Tax vs Emptee Poly-Yarn Pvt Ltd. “Even when the assessee gives an opinion on a given process, the department does not submit any counter opinion wherever such counter opinion is possible,” the court said. In this case, the question was whether twisting and texturising of partially oriented yarn amounts to ‘manufacture’ in terms of Section 80IA of the Income Tax Act. Upholding the judgement of the Bombay high court, the apex court stated that in the facts and circumstances of this case, the yarn is a semi-finished product and it cannot be used directly to manufacture fabric.
Rules, by-laws on BSE be published in the official gazette, state gazette
The Supreme Court has observed that even if the Securities Contracts (Regulation) Act 1956 did not contemplate publication of the pre-recognition rules for stock exchanges and by-laws, “The position is and would continue to be rather ambivalent if the amended rules and by-laws were published in the official gazette while the main rules remain unpublished.” Therefore, the court stated that it might be in the fitness of things to have the rules and by-laws also published in the official gazette and the state gazette. The observations came in the judgement, Mahesh Ratilal Shah vs Union of India while ruling that the Bombay Stock Exchange (BSE) did not commit any irregularity in the listing of the scrips relating to Presto Finance Ltd which was later delisted for cheating investors. The court dismissed the special leave petition filed by Shah, a sub-broker, who sought a direction to the SEBI to de-recognise the BSE for allegedly misleading the investors by listing the shares on its exchange.
Courts’ approach to social welfare laws criticised
The Supreme Court has criticised the “visible shift in the courts’ approach in dealing with cases involving the interpretation of social welfare legislations” in its recent judgment in Harjinder Singh vs Punjab State Warehousing Corporation. “The attractive mantras of globalisation and liberalisation are fast becoming the raison d'etre of the judicial process and an impression has been created that the constitutional courts are no longer sympathetic towards the plight of industrial and unorganised sectors,” the court observed. In this case, an employee was ordered to be reinstated by the labour court. The order was modified by the Punjab and Haryana high court. The Supreme Court upheld the labour court order to reinstate him with 50 per cent of back wages, holding that his retrenchment was illegal.
Justice Srikrishna is arbitrator in Vedanta’s dispute
The Supreme Court has appointed its former judge, Justice B N Srikrishna as arbitrator in the dispute between Dubai-based Trimex International FZE Ltd and Vedanta Aluminium Ltd of India. The court examined the e-mail communication and documents to arrive at the finding that there was indeed an arbitration clause in the bauxite purchase order exchanged between the parties. The dispute started when Vedanta asked the Dubai firm to stop mineral shipments to it, whereas the former expressed its inability to do so, terminated the contract and claimed damages.
‘Arbitrator should give a reasoned award, not a terse one’
If the central government does not produce relevant documents and fails to cross examine witnesses during arbitration, it cannot argue that the arbitrator had not given a reasoned order, the Supreme Court stated in the judgement, Union of India vs Harbans Singh Tuli. The Supreme Court has stated in several of its judgements that the arbitrator should give a reasoned award and not a terse one, which baffles the court when the award is brought before it for making it an order of the court. In this case, the government argued that the award was without reasoning and therefore should not be given the judicial stamp. The Supreme Court stated that the award was short because the government did not cooperate with the arbitrator by giving the necessary documents to him.
Civic body told to invite fresh bids for golf course
A division bench of the Bombay high court has directed the City and Industrial Development Corporation of Navi Mumbai to invite fresh bids for the development of 18 Holes International Standard Golf Course and Country Club extending to 35.55 hectares. The order was passed in the petition filed by Makhija Developers challenging the award of contract to another firm. The high court held that “ the entire tender process was vitiated” and the letter of allotment to the winning firm was illegal from the start. The lease deed was held void.
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