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 &ldquo;the contractor shall bear and pay all taxes, duties and other liabilities in connection with the discharge of his obligations.

<B>M J Antony:</B> Service tax liability can be shifted

Business Standard

IN view of conflicting judgments delivered by various high courts in the country on two questions involving cheques which bounce, the Supreme Court has referred the issues to a larger bench for an authoritative pronouncement. Under Section 138 of the Negotiable Instruments Act, if a cheque is dishonoured, the payee may issue notice to the drawer to pay the amount within 15 days. If he does not receive the payment, a criminal complaint may be filed before a magistrate within one month. In some cases, the payee moves the magistrate&rsquo;s court even before the expiry of 15 days and without waiting for the one-month period. The question whether cognizance can be taken by the magistrate in such cases was the main issue which arose before the Supreme Court in the case, Yogendra Pratap vs Savitri Pande. The court found that there were contrary stands on this issue in the courts below.

<B>M J Antony:</B> Cheque bounce issue for larger bench

That&rsquo;s how quickly someone who has a stake in the outcome of a case would react. But the government, the largest litigant in any court, may take months or even years to file its appeal against an adverse judgment. Eventually, if the courts dismiss such appeals on grounds of delay itself, tax payers will be the ultimate losers.

M J Antony: Sleeping over files

The amounts locked in some 4 million cheque-bouncing cases pending in courts must be equal to the figures involved in a few scams or the dirty money cached in tiny spots around the globe. Magistrates and criminal courts are unable to cope with them. The sombre state of the economy indicates that the situation is unlikely to improve despite efforts to fast-track these cases.

M J Antony: A case of triple jeopardy

The Supreme Court last week dismissed the appeal of Tejas Constructions &amp; Infrastructure Ltd against the judgment of the Madhya Pradesh high court which had upheld the allotment of the project work involving design, construction and commissioning of a single integrated water supply at Sendhwa (Madhya Pradesh) in favour of M/s P.C. Snehal Construction Company. Only four firms were found eligible under the tender conditions. Tejas argued that Snehal was not eligible for the project as it had no technical qualification. Despite the objections, the project was awarded to Snehal. Tejas moved the high court, without success. The Supreme Court upheld the finding of the high court. Its judgment added that the central government sponsored project, which is to be completed this year, is meant to benefit scarcity-hit population in the town and therefore, interference in the matter at this late stage would put the people to great hardship.

M J Antony: Court not to disturb ongoing project

As long as the courts limit the exercise of their powers in administrative law to prohibit the commercial use of yaks or order the replacement of fibreglass boats in the Andaman islands, the executive and the legislature think the judiciary is acting within bounds. But if judicial review is extended to core areas like distribution of licences for telecom or mining industries, the government can raise a dozen constitutional questions. For instance, it attempted a three-pronged attack on the telecom judgment in CPIL vs Union of India. Two were dented, but the presidential reference has survived to see another day.

M J Antony: Constitutional turf war

The Supreme Court has ruled that an authorized signatory of a company cannot be prosecuted for issuing a dishonoured cheque without the company itself being arraigned as an accused person. The issue involving Section 138 and 141 of the Negotiable Instruments Act had divided a bench of two judges earlier and it was referred to a three-judge bench.

M J Antony: Company name in bounced cheque

Ever since arts and music left the privileged precincts of temples and palaces, they have become crassly commercial, much like education and health care. Copyright laws have become inadequate with advances in technology that propel frantic transmission of creative work to everyone&rsquo;s palm. Even as court battles are being fought on new frontiers in cyber piracy, the old-fashioned disputes over playing recorded music on radio or in public places have not been settled. Two judgments of recent weeks dealt with them.

M J Antony: Copyrights and wrongs

The Supreme Court last week ruled that if a successful bidding firm goes back on the contract, it could be blacklisted. In this case, Patel Engineering Ltd, the National Highway Authority of India (NHAI) advertised for a six-lane express way in West Bengal and Orissa and as the firm was the highest bidder it was given the project. However, soon thereafter it informed NHAI of its decision not to undertake the project because it was not found to be unviable on second look.

M J Antony: Successful bidder can be blacklisted

The good news from the Union Budget is its grudging recognition that more funds are urgently required to improve the infrastructure of the legal system. The allocation for computerisation of district and subordinate courts has been doubled from Rs 105 crore in 2011-12 to Rs 213.66 crore in 2012-13. Allocations for infrastructural facilities have been increased by Rs 4.57 crore to Rs 510 crore for the next fiscal from Rs 505.43 crore in 2011-12. The National Mission for Justice Delivery and Legal Reforms gets Rs 37.50 crore.

M J Antony: Scratch on the surface

THE Supreme Court has referred to a larger bench the question of the authority of an arbitral tribunal to award interest on interest from the date of the award. A two-judge bench of the court noted divergence of opinion among several of its earlier judgments. This was pointed out in the latest case, M/s Hyder Consulting (UK) Ltd vs Chief Engineer, Odisha. The high court relied upon a Supreme Court judgment while quashing the order of a district judge on the arbitration award. However, the UK company argued the high court decision was wrong as it was against the Act and a series of judgments of the Supreme Court. Therefore, the present case will be heard for settling the differences on this issue by a three-judge bench. The Chief Justice of India will set up the bench.

M J Antony: SC split on arbitration issue

After a long break, the Supreme Court has resumed the publication of its journal, Court News, providing to the public &ldquo;the activities and achievements of the Indian judiciary in general&rdquo;. Like most news, what the straight-faced quarterly purveys is bad news. The old gripe, that judicial vacancies are not filled up, arrears are mounting at every rung of the judiciary and the ratio of judges to the bulging dockets is dismal, seem to have only got worse in some respects.

M J Antony: Mind the gaps

THE Supreme Court has ruled that a full-time single member of the Securities and Exchange Board of India (Sebi) has the power to cancel the recognition granted to a stock exchange. In this case, Saurashtra Kutch Stock Exchange vs Sebi, the stock exchange was granted recognition under the Securities Contracts (Regulation) Act. In 2007, it was issued notice by Sebi to show cause as to why its recognition be not withdrawn due to diverse failures and non-compliances of regulations.

M J Antony : Sebi power to cancel recognition

There is a bit of irony here. On the one hand, a five-judge Constitution Bench is into the fourth week of trying to prevent errors in media reporting of crime and court proceedings. On the other, the court is assailed with review petitions from telecom goliaths and the government itself arguing that its judgments are riddled with &ldquo;errors apparent on the face of the record&rdquo;.

M J Antony: Error of judgment

It happens often that an individual fights a case up to the Supreme Court and gets relief for himself. At the same time, others in a similar position who have slumbered over their rights derive benefit from the order. These dormant beneficiaries may not have moved a finger, and often may not even be aware of the bonanza unless they come to know of it by chance.

M J Antony: Bonanza for bystanders

The inventive genius of taxmen was never more evident as in contriving the idea of entertainment tax. The British rulers are said to have originally entertained the idea of imposing a levy on amusements and melas to discourage people from gathering together and plotting against colonial authorities. Though that objective is no longer relevant, the home-grown fiscal wizards found it a convenient tool to raise revenue.

M J Antony: Taxing the judicial brain

The Supreme Court has set aside the judgments of the Chhattisgarh and Madhya Pradesh High Courts and allowed tendu-leaves traders to file their returns before the VAT assessing authority who shall dispose of the matters within two months. The Minor Forest Product (Trading &amp; Development) Co-operative Federation Ltd had initiated the tender process for sale of Tendu leaves. One of the conditions was that the bidder, whose bid is accepted, has to remit the taxes under the VAT Act to the state government. Several firms which were successful bidders were asked to pay the tax. They moved the high courts asking the respective revenue departments to treat the sales as inter-state sale and, therefore, not exigible for the levy. The high courts dismissed their petitions, without going into the nature of the transactions. They appealed to the Supreme Court in a batch, led by M/s Zunaid Enterprises vs State.

VAT on tendu leaves sent for review

When there is a chicken-or-egg legal question, jurists can cite case law for both sides.

M J Antony: Cherry-picking case law

Even if the contract which contained an arbitration clause expired by efflux of time, the arbitration itself will not come to an end, the Supreme Court said, while appointing retired Justice N K Sodhi as the sole arbitrator in a dispute between Lufthansa German Airlines and the Airport Authority of India. The agreement had expired in March 2007. The dispute started during the subsistence of the contract and spilled over to later years. The airport authority failed to appoint its arbitrator. Therefore, the airlines moved the court. It stated that the dispute over damage to cargo was arbitrable and appointed the arbitrator.

Arbitration clause survives contract

Unlike in some countries as the US, the judges of the Supreme Court of India sit in some 13 Benches and deliver judgments. Each judgment is taken as that of the court. One Bench might take a harsh view on a subject while another may be lenient.

M J Antony: Put transparency first

The Supreme Court held last week that even if lender institutions condone the fraud committed against them and settle their complaints against the offenders, the prosecution should normally go on. Courts should not quash the prosecution of non-compoundable offences unless the facts justify it, the judgment in the case, Ashok Sadarangani vs Union of India, said.

M J Antony