Sales tax appeal allowed

LEGAL DIGEST

The Supreme Court allowed the appeal of Mahavir Vegetable Oils Pvt Ltd against the Haryana government, which had denied it certain sales tax benefits, promised earlier. Such benefits were promised to new industrial units set up in backward areas according to a policy decision.

However, after the company invested heavily in its unit, the government amended certain section of the sales tax legislation, following which it denied the benefits to the company.

The company moved the Punjab and Haryana High Court. The high court dismissed the petition. On appeal, the Supreme Court accepted the contentions of the company and asked the director of industries to consider the company's case afresh.

Bus body builders' case sent to larger Bench

The Supreme Court has referred to a larger Bench the question whether builders of bus bodies are entitled to benefits under Section 5(3) of the Central Sales Tax as there are conflicting decisions by the apex court itself on this point.

The reference was made in the case of State of Karntaka vs Azad Coach Builders Pvt Ltd. Manufacturers of buses like Tata and Ashok Leyland get orders for export of buses. They manufacture only the chassis and place orders on body builders.

The revenue department maintained that a bus and a bus body are different articles and bus body was a separate and saleable commodity, different from chassis or a complete bus.

Therefore, the body builders are not entitled to the sales tax benefits, which are available only when the commodity exported is the same as the one purchased. Over this argument, the court had taken different views earlier.

Seizing vehicle not unfair practice

The Monopolies and Restrictive Trade Practices Commission has ruled that taking possession of a vehicle by a finance company under the terms of the lease agreement following default in payment of instalments would not amount to unfair trade practice.

In this case, Darshan Singh vs Escorts Finance Ltd, the company took possession of a truck and auctioned it to partly recover the loan amount. The person who bought the truck on hire-purchase moved the commission arguing that he had paid some instalments, but due to an accident, there was an interruption in the payment schedule.

He alleged unfair trade practice on part of the company and wanted the vehicle released. The finance company stated that all but four of his 36 cheques had bounced and there was no record of any accident involving the truck. He had also left the address without informing the company, it said.

Recovery from employee not fair

The SC has held that negligence in performance of duty under a contract of employment may give rise to disciplinary proceedings but the employer cannot file a suit against the employee for recovery of money for the goods lost.

The court stated this in the case, Punjab State Civil Supplies Corporation Ltd vs Sikander Singh, a supervisor in the corporation. Singh was dismissed after a large quantity of wheat was found missing. The corporation filed a suit to recover the cost of the wheat lost.

The trial court decreed the suit but the high court reversed it.