Appeal to HC in arbitration

LEGAL DIGEST

The Supreme Court has set aside the judgment of the Punjab and Haryana High Court and ruled that the decision of a civil judge in an arbitration matter could be challenged in a high court and it need not be taken to the Supreme Court. In this case between Punjab Agro Industries Corporation and KS Dhillon with whom the corporation wanted to set up a joint venture, disagreement arose and there was no accord even on going to an arbitrator. Therefore, the corporation moved the senior civil judge in Chandigarh for appointment of an arbitrator. It was rejected. The corporation moved the high court. It also dismissed the corporation’s prayer. So it approached the Supreme Court. It explained that the corporation was entitled to approach the high court under the Arbitration and Conciliation Act. When a party has a choice to approach the high court of the Supreme Court, it should not come directly to the apex court, the judgment said.

L&T wins tax liability case

The Supreme Court has dismissed the appeal of the Andhra Pradesh government in its dispute with Larsen & Toubro (L&T) Ltd over the latter’s liability to pay tax under the state VAT Act of 2005. The construction company had entered into contracts and assigned parts of the building work to sub-contractors. L&T placed orders on such sub-contractors for agreed prices, inclusive of taxes. The materials were brought to the site and remained the property of the sub-contractors. The revenue authorities issued show cause notice to L&T for failing to disclose the sub-contractors’ turnover in its returns. It replied that there was no such obligation and the sub-contractors were ‘dealers’. The Supreme Court upheld the arguments of the company and stated that if the department’s argument was accepted it would result in plurality of deemed sales, which is barred by Article 366(29A)(b) of the Constitution and result in double taxation.

Camlin granted excise relief

The Supreme Court last week accepted the contention of Camlin Ltd, manufacturers of various types of writing instruments, that its writing inks would not attract excise duty. The court granted excise relief to the company in its appeal against an order of the excise tribunal in Mumbai. The tribunal had stated that marker inks alone among all other inks should be taxed, but that view was overruled by the Supreme Court.

AS Fuels to pay tax on exemption availed

The Supreme Court set aside the judgment of the Punjab and Haryana High Court in the dispute between the Haryana government and M/s AS Fuels Ltd over cancellation of exemption certificates in regard to sales tax. The firm was granted eligibility certificate and exemption certificate for a certain number of years and it was renewed for some time. Later it was cancelled as the firm stopped production. The authorities demanded tax in respect of the exemption already availed of with interest. The company pleaded that it was hit by non-availability of coal, which was beyond its control. It opposed the retrospective application of the rules, asking it to pay old taxes. The high court stated that the exemption was not available only for the defaulting year. The Supreme Court accepted the government’s contention.

Security guards’ union appeal dismissed

The Supreme Court has dismissed the appeal of trade unions representing security guards in Maharashtra demanding full employment by the employer to whom the guards are allotted. In this case, Krantikari Suraksha Rakshak Sanghatana vs Bharat Sanchar Nigam Ltd and others, they argued that once the Security Guard Board constituted under the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act 1981 allotted guards to a principal employer, it lost the power to recall, re-allot or transfer such guard as the allotted guard became an employee of the principal employer. The Bombay High Court had earlier rejected their arguments in several cases. In this case also the high court dismissed their petition. The Supreme Court dismissed their appeal.

National Insurance to reimburse victim

The Supreme Court has dismissed the appeal of National Insurance Company in a motor vehicle accident case and asked it to reimburse a third party who suffered severe injuries in a road mishap. The owner of the truck which dashed against the victim's moped had sent a cheque for renewal of his policy. However, the cheque was dishonoured. The owner then paid cash and the company sent him a ‘cover note’. The insurance company argued that since the cheque was dishonoured, there was no contract of insurance existing on the date of the accident. The court rejected this argument and said that once the cash was accepted and the cover note was issued, the company was bound to reimburse the victim.