Whirlpool's plea dismissed

LEGAL DIGEST

The Supreme Court last week dismissed the appeal of Whirlpool of India Ltd challenging the ruling of the Karnataka High Court in a dispute over sales tax.

The Indian company has a licence to use the trade name Whirlpool, which is owned by Whirlpool Corporation of USA. The Indian company in Bangalore entered into an agreement with Applicomp India Ltd under which the latter company will manufacture and supply products to Whirlpool as per the specifications.

Applicomp was exempted from tax by a state notification. Whirlpool claimed exemption of levy on that ground. It was not allowed by the authorities. Rejecting the contention of Whirlpool, the Supreme Court stated that the incidence of tax on the first sale would be on Whirlpool and not on Applicomp.

Duty on oil

The Supreme Court has dismissed the appeal of the revenue authorities against the ruling of the excise tribunal that 'Alma Lio', produced by Zandu Pharmaceuticals Works Ltd, is a perfumed oil, but not a cosmetic.

Cosmetics attract a duty of 30 per cent ad valorem whereas perfumed oil attracts 18 per cent duty. The company claimed that it was an Ayurvedic medicament, liable to 8 per cent levy. The tribunal rejected the company's claim. So it appealed to the Supreme Court. It went into the manufacturing process and upheld the tribunal's view.

Addition of perfume is a part of the manufacturing process, it said. While upholding the tribunal's view, the Supreme Court did not go into the issue whether the product had therapeutic value.

Meter tampering

The Supreme Court has set aside the judgement of the National Consumer Commission and ruled that in case of tampering of an electric meter, it is not necessary to refer the matter to the electrical inspector under Section 26(6) of the Electricity Act.

The Haryana consumer commission and the national commission held that the demand of penalty from a factory owner in this case was illegal.

Reversing their findings, the Supreme Court held in the case Sub-divisional officer vs Dharam Pal that no reference to the inspector was necessary in cases of tempering. The provision considered cases of faulty meters.

Minutes of meeting

The Supreme Court last week emphasised that non-confirmation of minutes at a board meeting did not have any effect on the decision taken by it earlier.

With this ruling in the case Kerala State Electricity Board vs Hindustan Construction Co Ltd, the latter will receive Rs 8 crore with interest from the board. The construction company, which was to build a power tunnel for Lower Periyar power project, claimed compensation from the board on various counts. Earlier, the board agreed to pay.

But after the Assembly debate, it changed its stand and refused to pay the amounts, maintaining that the earlier decision was not confirmed at the board's later meeting.

The Kerala High Court rejected the arguments of the board. The Supreme Court dismissed its appeal and ordered payment agreed to earlier.