Labour rows in central govt undertakings

When there is a labour dispute in a central government undertaking, the state government where it is situated can refer the issues to a labour court there according to its law. It is not essential that the central government should refer it according to the Industrial Disputes Act, the central law, the Supreme Court stated when a dispute arose between the workers of Hindustan Aeronautics Ltd (HAL) in Nashik, Maharashtra, and the central undertaking.

The Supreme Court, thus, quashed the Bombay High Court order, which held a different view. This is a question, which has arisen in several cases when a central industry is situated in a state. Though there have been decisions in the cases of Air India, SAIL and Heavy Engineering Corporation, the issue has cropped up again. In this case, the workers' union filed a complaint under the Maharashtra Trade Unions and Prevention of Unfair Labour Practices Act.

The labour court found that HAL had indulged in unfair practices and ordered reinstatement of persons who were terminated with full back wages. The industrial court upheld it. HAL moved the Bombay High Court arguing that it was performing "sovereign functions" as it was manufacturing defence aircraft and it is directly under the central government.

Therefore, the state law would not apply to the central undertaking and it shall be governed by the Industrial Disputes Act. The high court accepted the argument. The workers appealed to the Supreme Court. It held that the high court was wrong and the state government was the appropriate authority to refer the dispute to the labour court. The judgment emphasised that the central government came in only if the industry is carried on "by or under the authority of the central government". This is question of fact to be decided in individual cases.

Extension of sales tax filing period

Though the sales tax authorities have the power to extend the date for filing returns, the extension should be done before the expiry of the deadline, the Supreme Court has stated in a large batch of appeals, State of Punjab vs Shreyans Industries Ltd. In these matters, the revenue authorities sent notices to the firms after the expiry of three years.

The assessees objected to it arguing that the notices were sent beyond the period of assessment and, therefore, it was not permissible to issue notices after the expiry of three years and carry on with the assessment proceedings. The Punjab and Haryana High Court agreed with them. The appeal of the state government was dismissed noting that there are similar provisions in the Karnataka and Gujarat sales tax laws.

The commissioner has the power to extend the date, but it should be done giving adequate reasons in writing. The judgment stated that "once the period of limitation expires, the immunity against being subject to assessment sets in and the right to make assessment gets extinguished. Therefore, there would be no question of extending the time for assessment when the assessment has already become time barred.

A valuable right has also accrued in favour of the assessee when the period of limitation expires. If the Commissioner is permitted to grant the extension even after the expiry of original period of limitation prescribed under law, it will give him right to exercise such a power at any time even much after the last date of assessment."

Retrial of decades-old claim

The Supreme Court has set aside the judgment of the Gauhati High Court and asked the trial court to reconsider the two-decade-old claim of Bharat Hydro Power Corporation Ltd against the Assam government with respect to the expenses incurred on the Karbi Lanagpi project till 1994.

The corporation was taken over by the government in 1996. The dispute was over the jurisdiction of the commission, which was set up under the acquisition law to settle claims. The commission had decided that it had no power to take up claims, which arose before the acquisition.

The high court upheld that view. On the appeal of the corporation, the Supreme Court held that both the high court and the commission were wrong and ordered reconsideration of the claim.

Partner's role in bounced cheques

The Gujarat High Court has held that in a cheque bounce case under Section 138 of the Negotiable Instruments Act, a partnership firm can be considered as a legal entity like a company and the offence can be punished accordingly. Since a company is held to be an essential party to a cheque bounce case, similarly, it is imperative that a partnership also must be made a party to the trial.

Only then can the partners be prosecuted. Prosecution cannot be launched against the partners, without joining the partnership firm, the court ruled in the case Ismailji vs State of Gujarat. If it had not been done initially, it cannot be done later. In this case, only the partners were arraigned. One of the partners pointed out that the firm had not been made a party. The court, therefore, discharged the partners from prosecution.

Quarantine of imported timber

The Delhi high court last week stated that import of timber without following the mandatory condition of fumigation at exporter's end could have serious ramification for the country's flora and fauna as well as environment in general.

The court thus declined to interfere in the order issued by the deputy secretary, Ministry of Agriculture and Farmers Welfare, directing the plant protection adviser to file an FIR against the importer and exporter of the timber consignment as the phytosanitary certificate of the exporter was forged. In this case, India Timber & Seasoning Plant vs Union of India, the importer argued that it should not be punished for the fault of the exporter of timber from Ivory Coast.

Moreover, fumigation costs so little that no firm would forge a certificate for that. However, it was confirmed by the Ivory Coast authorities that the certificate was forged. The court emphasised that in accordance with the Plant Quarantine Order, timber has to be fumigated by the exporter before sending it. "No importer can state that because the timber has been fumigated in India, it should not be sent back to the country of origin," the judgment said. It added that import of food and trees can be dangerous both for humans as well as for agriculture and the imported timber cannot be allowed to remain in this country.

Interest on excess I-T payment upheld

The Calcutta High Court last week ruled that the Income Tax Appellate Tribunal was justified in granting interest to Birla Corporation on refund arising due to excess payment on self-assessment. It also stated the relevant provision, Section 244A of the Income Tax Act, did not bar payment of interest on such refunds. The court thus dismissed the appeal of the Commissioner of Income Tax against the judgment of the tribunal.

The revenue authorities argued the law did not provide for interest. Rejecting their contentions, the high court stated when an assessee out of abundant caution pays tax after self-assessment, on which claim is accepted, resulting in refund, the assessee should be entitled to interest. The provision was inserted in the Act as a measure of rationalisation to ensure that the assessee is compensated by the government for monies legitimately belonging to the assessee and wrongfully retained by it.