The Supreme Court has ruled that in the process of plastic goods manufacturing, powdering LDPE and HDPE granules into moulding powder, amounts to "manufacture" and is, therefore, liable to levy of excise. This ruling came in the OK Play (India) Ltd vs Commissioner of Central Excise (CCE) case. |
The manufacturers of plastic goods like toys, water-storage tanks, furniture and other items procure the raw materials in granule form and pulverise them to produce the powder for the moulding machines. |
|
The revenue authorities issued show cause notice to the manufacturer, OK Play, maintaining that the process produced a new and marketable product and, therefore, there was evasion of duty. |
|
The company pleaded that there was no manufacture as the powder was used to make products according to the proportions required for each item. |
|
The revenue authorities, however, showed that it was a marketable item and the company itself had bought the powder from the market occasionally. The Supreme Court accepted the CCE's contention that there was a new product and it was marketable. |
|
Partners' case sent back to HC |
|
The Supreme Court has set aside the judgment of the Karnataka High Court and asked it to reconsider the question of capital gains on the former partners of Mangalore Ganesh Beedi Works in its judgment (M Janardhana Rao vs Jt Commissioner of Income Tax). |
|
The firm was dissolved and the 13 erstwhile partners are believed to have continued the business as members of an "association of persons". |
|
Later, the assets were sold on the orders of the high court. The revenue authorities decided that the share of the income should be included in capital gains. The assessees resisted it. |
|
The decision of the IT Appellate Tribunal did not satisfy either the assessees or the department. Therefore, they appealed to the high court. |
|
Again, there were disputes over the procedure followed by the high court. Now, the Supreme Court has asked the high court to look into the matter afresh after interpreting Section 260A of the Income Tax Act. |
|
No re-employment on revival: SC |
|
The Supreme Court has ruled that a worker has no right to be re-employed in a company which was revived after its closure and payment of retrenchment compensation. The court ruled so in the case of Maruti Udyog Ltd vs Ram Lal, while overruling the decision of Punjab and Haryana high court. |
|
The employees in this case were retrenched after the acquisition of Maruti Ltd in 1980. However, they claimed re-employment in the new company after its revival. The high court ordered so on legal grounds as well as a case of sympathy. |
|
Setting aside this view, the Supreme Court observed that "while construing a statute, sympathy has no role to play. This court cannot interpret the provisions of the Industrial Disputes Act ignoring the binding decisions of the Constitution Bench of the court, only by way of sympathy to the concerned workmen". |
|
No tax benefit after recovery |
|
The Supreme Court last week dismissed the appeal of Southern Agrifurane Industries Ltd against the Madras High Court judgment rejecting its claim for sales-tax benefits granted when the company was sick. |
|
The Tamil Nadu government had allowed deferral of tax payment on certain conditions, on the recommendation of the Board of Industrial and Financial Reconstruction, which had put IDBI as the monitoring agency. |
|
Later, the company recovered and its net worth and became positive. However, a dispute arose on the continuation of the tax concessions. |
|
The Supreme Court stated that the company was entitled to the relief only to the extent it was necessary to take it out of sickness. Anything in excess of such rehabilitation would not be covered by Section 17A of the Tamil Nadu General Sales Tax Act, the court said. |
|
|
|