MRF entitled to tax exemptions

LEGAL DIGEST

The Supreme Court last week set aside a ruling of the Kerala High Court and declared that MRF Ltd, manufacturer of tyres and rubber products, was entitled to the tax exemptions earlier granted by the Kerala government.

The government had withdrawn the benefit under a notification when the company had already invested huge amounts in one of its units in the state. The state revenue authorities had also threatened action against the company.

Following the company's appeal, the Supreme Court restrained the state authorities from initiating any proceedings against the company.

South Eastern Coalfields Ltd

The Supreme Court has ruled that South Eastern Coalfields Ltd was entitled to exemption from excise duty for its workshop at Korba as the workshop was part of the mine under the Mines Act.

According to a 1995 notification, all goods manufactured in a mine would be free from excise duty. However, the commissioner of excise demanded the duty and the Customs, Excise and Gold Appellate Tribunal upheld the demand and penalty.

On appeal, the Supreme Court asserted that according to the notification, the mine was not liable to pay the duty.

Mill told to resort to alternative remedy

The Supreme Court last week declared that when a statutory remedy is available to a company under a legislation, it would not be proper for it to move a writ petition in the high court.

This observation was made in the judgement, Star Paper Mills Ltd vs State of UP. The state authorities demanded market fee for purchases of agricultural products made by the company from the state forest corporation.

The company moved the high court against it in a writ petition. The high court dismissed it stating that alternative remedies were available to the company. This view was upheld by the Supreme Court on appeal.

Division of assets upheld

The Supreme Court last week upheld the division of assets and liabilities of the electricity boards of Madhya Pradesh and Chhattisgarh made by the central government and dismissed the challenge of the MP State Electricity Board (MSEB) against it.

According to the central government scheme, long-term assets and liabilities were divided in the ratio of 90:10 and MPSEB had been given 85 per cent of the assets and 84 per cent of the liabilities.

The Supreme Court stated that "the action on the part of the central government cannot hence be said to be irrational. The revenue generation capacity would be the most favourable variable to them."

Insurance co told to pay Rs 2 cr to firm

The Supreme Court last week directed New India Assurance Co to pay Rs 2 crore to Shobika Attire, which was looted and razed by rioting mobs in the communal flare-up in Coimbatore in 1998.

The insurance company appointed an investigator who reported that there could not have been any looting as alleged. The national consumer commission had earlier dismissed the claim.

However, on appeal, the Supreme Court stated that the firm had proved its loss and the insurance company could not rebut it. Therefore, it asked the insurer to pay the amount with interest at the rate of 9 per cent.