A case of clandestine transport of war material and explosives from abroad to Kandla port in the garb of “heavy metal scrap” has become a bone of contention between the port trust and a shipping agent, Goodrich Maritime (P) Ltd. The goods were confiscated by the customs department. The company sought the release of its containers after de-stuffing the goods.
The police authorities declined to intervene, suspecting its power to do so. The port trust then demanded storage charge and ground rent from the company.
The high court quashed the demand. On appeal by the port trust, the Supreme Court remanded the matter to the high court to consider the issue whether the demand was proper in the context of the clandestine activity involved. The court also sent the copy of the judgment to the central government as national security was involved.
Showcause notice over non-deduction of IT challenged
The Supreme Court dismissed the appeal of Kanchanganga Sea Foods Ltd challenging of the show cause notice issued to it for not deducting income tax at source in its fish trade with Hong Kong’s Eastwide Shipping Company. The Indian company is engaged in fishing in the exclusive economic zone and exporting the catch. It chartered vessels from the Hong Kong company with an arrangement to supply 85 per cent of the earnings from the sale of fish to the non-resident company. The Reserve Bank permitted the company to remit 85 per cent of the gross earning from the sale of fish towards charter fee. The voyage started and ended in Chennai. When the tax authorities issued notice for not deducting tax, the Indian company submitted that the non-resident company did not carry out activities within Indian waters which had the effect of resulting in accrual of income. No payment was made by the assessee to the Hong Kong company in this country and therefore there was no obligation to deduct tax under Section 195 of the Income Tax Act. The Andhra Pradesh high court rejected this argument. The appeal was also dismissed by the Supreme Court.
Apex court sets aside HC order in arbitration case
The Supreme Court last week set aside the order passed by the Bombay high court in an arbitration case between public sector Rashtriya Chemicals & Fertilisers Ltd and Chowgule Brothers. The high court had upheld the majority award of the arbitrators. The government company invited tenders for allotment of clearing, forwarding, handling and stevedoring jobs at Mormugao port for one year, extendable for further period of one year. The conditions were the same, except that wage increases of dock labourers were excluded from the purview. When statutory wage increases were implemented for the extended contract period, dispute arose between the government company and Chowgule Brothers, which was referred to three arbitrators. The panel split with the majority ruling that the contractor was entitled to the protection against wage increase. The matter was taken to the high court. The single judge bench set aside the award, but the division bench upheld it. The Supreme Court allowed the appeal of the government with certain modifications.
Insecticides Act loses teeth after insecticide loses strength
Prosecution under the Insecticides Act loses its force if the complaint is filed after the shelf life of the product, the Supreme Court stated while exonerating Northern Minerals Ltd and its dealer for a charge under the Act. The company submitted before the chief judicial magistrate and the Punjab and Haryana high court that it did not get an opportunity to get analysis report verified from the central laboratory because of the late filing of the complaint. Both courts rejected the argument. However, the Supreme Court accepted the company’s argument and quashed the complaint against it. It stated that the shelf life of the insecticide had expired even before the filing of the complaint. “We are distressed to find the casual manner in which the whole exercise has been done,” the judgment said, pointing out the dates in which various steps were taken by the concerned authorities. It added” “All who are entrusted with the implementation of the provisions of the Act would be well advised to act with promptitude and adhere to the time schedule so that innocent persons are not prosecuted and real culprits not left out.”
Director of firm not liable for bounced cheques
A director of a company would not be liable for issuing cheques which bounced for want of sufficient funds unless it is proved that he was in charge of and responsible for issuing them, the Supreme Court reiterated last week in the case, Central Bank of India vs Asian Global Ltd. Earlier, the Delhi high court had quashed the criminal complaint against some directors of the company under Section 138 of the Negotiable Instruments Act. The bank’s appeal to the Supreme Court was dismissed with the observation that the bank did not substantiate the claim that the concerned directors were vicariously liable for the acts of the company. According to the law laid down in earlier judgment, a bald statement that the directors were responsible for the fault was not enough. There should be specific charge against the directors.