SC upholds UP Power Corporation's demand

LEGAL DIGEST

The Supreme Court last week upheld the UP Power Corporation's demand of penalty from scores of industrial units for violation of peak hour restrictions. In order to check malpractices by the units, the corporation had installed electronic meters which showed the consumption details of the past 35 days.

According to the readings, the corporation imposed a penalty on the guilty units for each day of violation. The units challenged the Bill in the Allahabad High Court, asserting that data for the 35 days should be treated as one contravention though there could be many violations during the period. The high court agreed with them.

Meanwhile, the Lucknow bench of the high court had rejected their claim in another batch of cases. The corporation appealed to the Supreme Court which held that the Allahabad bench was in the wrong.

Rajasthan govt's appeal turned down

The Supreme Court has dismissed the appeal of the Rajasthan government against a state high court ruling striking down Section 4A of the Sales Tax Act.

The state government had imposed tax on the first point sale of drugs, formulations and other commodities by manufacturers to retailers, based on the maximum retail price (MRP) printed on the package.

The Rajasthan Chemist Association challenged the rule, stating the MRP was not the price charged by wholesalers from retailers, which was the first point of sale. It was much lower. MRP was the price charged at the last point of sale by the retailer.

Accepting this argument, the high court struck down the provision introduced by the Finance Act in 2004. The Supreme Court clarified that if the tax component has been passed on to the subsequent purchases, a claim for refund shall not be entertained. But where it has not been so passed on, the same shall be adjusted against future demands.

Compensation for accident reduced

The Supreme Court has reduced the compensation awarded by the motor accidents claims tribunal in a case by half, holding that Rs 6 lakh awarded was on the higher side.

The tribunal, in the UP State Road Corporation vs Krishna Bala case, had adopted a "multiplier" of 22, or assumed that the person who died would have earned for 22 years more.

The Supreme Court ruled that the correct multiplier would be 13, since the person died at the age of 36 years. It also reduced the rate of interest from 12 per cent to 9 per cent, taking into account the rate prevalent at the time of the death.

No compensation for worker's widow

The Supreme Court has upheld a judgement of the Andhra Pradesh high court holding that the widow of a worker who died at the work spot was not entitled to compensation under the Workmen's Compensation Act.

The tribunal, in Jyothi Ademma vs Plant Engineer, awarded her compensation under the Act, holding that he died due to stress of work.

On appeal, the high court held that he was already suffering from a chest disease and there was no stress at work. The Supreme Court upheld this view.