Before launching an income tax search and seizure, it is not necessary for the authorities to allow the assessee to inspect documents to verify whether there is sufficient ground for the order, the Supreme Court stated while disapproving the contrary view taken by the Delhi High Court in the case, Director General vs Spacewood Furnishers Ltd. It is necessary to record the reasons for ordering the search because the court may have to verify whether it was legal and not arbitrary.
But that principle "would not confer on the assessee a right of inspection of the documents or to a communication of the reasons at the stage of issuing the authorisation," the court underlined. It clarified that it was only at the stage of commencement of the assessment proceedings after completion of the search and seizure that the requisite information may be disclosed to the assessee. The high court view would make the exercise counter-productive.
Moreover, the high court committed a "serious error" in reproducing in great details the contents of the satisfaction note of the authorities. The exercise undertaken by the high court was "highly premature, having the potential of conferring an undue advantage to the assessee, thereby frustrating the endeavour of the revenue department.
Insurance companies usually include a clause in the policy that intimation of any loss should be intimated within 14 days or so. But this is not a total bar to the claim. The Insurance Regulatory Development Authority (IRDA), in its circular dated September 20, 2011 has emphasised that genuine claims cannot be rejected on account of delay in intimation, and that the insurer's decision to reject a claim must be based on "sound logic" and "valid grounds".
Insurance companies, especially government-owned, were reminded of this rule by the Delhi high court in its recent judgment in the case, Dwarika Projects Ltd vs Oriental Insurance Co. The contracting firm had suffered losses in a flash flood in Sharda river in August 2011, disrupting the work done for NHPC Ltd. It telephoned a particular officer and informed him about the loss. Since the firm was engaged in rescuing the workers and equipment, the formal email letter was sent beyond the prescribed 14 days. The insurance company sent its surveyor and he made visits and submitted a report which was accepted by the insurer.
But two years later, the claim was rejected on the ground that the formal intimation was sent beyond the time limit set in the policy. This rejection was challenged in the high court. It asked the insurer to proceed with the settlement of the claim on merits. The high court criticised the attitude of the insurer in spite of the IRDA circular and cited a Supreme Court judgment which said: "It is high time that governments and public authorities adopted the practice of not relying upon technical pleas for the purpose of defeating legitimate claims of citizens and do what is fair and just to the citizens."
Restraint on use of trade mark
The Bombay High Court last week restrained Eurobond Industries Ltd from using the trade mark 'Eurobond' or any other mark containing the words Euro or Eurobond or the device of globe within the arms of 'U' or any other mark identical or deceptively similar to that used by Archer Trading House Ltd. The mark is used on aluminum composite panels. In the interim order - the main suit is stayed and pending - the court,however, gave three months to the company to change its corporate name and trading style and also dispose of its existing stock of goods bearing the trade mark Eurobond.
Though Eurobond had been allowed to use the trade mark in a 2006 agreement, later its owner terminated the contract following changes in the shareholding of the company and it was assigned to Archer Trading. This was the point at which disputes arose between the companies over the trade mark, leading to Archer's application for injunction.
Wipro loses claim on energy tablet
The Madras High Court has rejected the application of Wipro Enterprises seeking permanent injunction against Heinz India Ltd from using the trade mark Volt. Wipro sells glucose based chewy tablets with the mark 'Bolts', promising instant energy 'anytime anywhere' for body and brain.
The trade mark is pending registration. Last year, the company found Heinz is selling a similar product with the name 'Volt'. Wipro alleged in its petition that the rival product not only adopted a deceptively similar name but also colour scheme for the product.
So it alleged the action was with mala-fide intention to pass off its product. Heinz replied that Bolts is a generic name and commonly used by other firms. There is also no monopoly on the phrase 'anytime, anywhere'. The court ruled that there is no need for injunction at this stage and the issues should be decided at the trial.
Curb on sale of ship lifted
The Bombay High Court has vacated its December order of restraint against Amrut Dredging Company, purchaser of a ship, barring it from disposing it of or creating third party rights. The company bought the ship before its arrest for maritime claim by Khakhra Marine Transport against the former owner of the ship.
The latter's contention was that the purchaser was only an alter ego of the former owner and the transaction was a sham. It was alleged that the deal was financed through issuance of shares, which was a strange way of transaction, and there was no evidence of actual payment. It asked the court to 'pierce the corporate veil'. The court rejected the argument and stated that there was nothing wrong in payment part cash and part shares. Lifting the corporate veil is permissible only in case of established fraud. The court stated that at the time of arrest, the ownership had already changed.
AI has special status on contract labour
The Bombay High Court has declared that there is a specific legal sanction given to Air India to enter into contract with foreign airlines on ground handling services at Indian airports and therefore it is excluded from the provisions of the Contract Labour (Regulation & Abolition) Act and the Contract Labour (Regulation & Abolition) Central Rules.
The court made this ruling while allowing the writ petition of Air India which was being prosecuted by the Labour Enforcement Officer. The high court stated that in view of the rules under the Airports Authority of India Act, the national carrier could not have been prosecuted by the labour officers. Air India handled 14 ground services because foreign airlines did not have the infrastructure here.
But that principle "would not confer on the assessee a right of inspection of the documents or to a communication of the reasons at the stage of issuing the authorisation," the court underlined. It clarified that it was only at the stage of commencement of the assessment proceedings after completion of the search and seizure that the requisite information may be disclosed to the assessee. The high court view would make the exercise counter-productive.
Moreover, the high court committed a "serious error" in reproducing in great details the contents of the satisfaction note of the authorities. The exercise undertaken by the high court was "highly premature, having the potential of conferring an undue advantage to the assessee, thereby frustrating the endeavour of the revenue department.
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Insurers rapped for harassing claimants
Insurance companies usually include a clause in the policy that intimation of any loss should be intimated within 14 days or so. But this is not a total bar to the claim. The Insurance Regulatory Development Authority (IRDA), in its circular dated September 20, 2011 has emphasised that genuine claims cannot be rejected on account of delay in intimation, and that the insurer's decision to reject a claim must be based on "sound logic" and "valid grounds".
Insurance companies, especially government-owned, were reminded of this rule by the Delhi high court in its recent judgment in the case, Dwarika Projects Ltd vs Oriental Insurance Co. The contracting firm had suffered losses in a flash flood in Sharda river in August 2011, disrupting the work done for NHPC Ltd. It telephoned a particular officer and informed him about the loss. Since the firm was engaged in rescuing the workers and equipment, the formal email letter was sent beyond the prescribed 14 days. The insurance company sent its surveyor and he made visits and submitted a report which was accepted by the insurer.
But two years later, the claim was rejected on the ground that the formal intimation was sent beyond the time limit set in the policy. This rejection was challenged in the high court. It asked the insurer to proceed with the settlement of the claim on merits. The high court criticised the attitude of the insurer in spite of the IRDA circular and cited a Supreme Court judgment which said: "It is high time that governments and public authorities adopted the practice of not relying upon technical pleas for the purpose of defeating legitimate claims of citizens and do what is fair and just to the citizens."
Restraint on use of trade mark
The Bombay High Court last week restrained Eurobond Industries Ltd from using the trade mark 'Eurobond' or any other mark containing the words Euro or Eurobond or the device of globe within the arms of 'U' or any other mark identical or deceptively similar to that used by Archer Trading House Ltd. The mark is used on aluminum composite panels. In the interim order - the main suit is stayed and pending - the court,however, gave three months to the company to change its corporate name and trading style and also dispose of its existing stock of goods bearing the trade mark Eurobond.
Though Eurobond had been allowed to use the trade mark in a 2006 agreement, later its owner terminated the contract following changes in the shareholding of the company and it was assigned to Archer Trading. This was the point at which disputes arose between the companies over the trade mark, leading to Archer's application for injunction.
Wipro loses claim on energy tablet
The Madras High Court has rejected the application of Wipro Enterprises seeking permanent injunction against Heinz India Ltd from using the trade mark Volt. Wipro sells glucose based chewy tablets with the mark 'Bolts', promising instant energy 'anytime anywhere' for body and brain.
The trade mark is pending registration. Last year, the company found Heinz is selling a similar product with the name 'Volt'. Wipro alleged in its petition that the rival product not only adopted a deceptively similar name but also colour scheme for the product.
So it alleged the action was with mala-fide intention to pass off its product. Heinz replied that Bolts is a generic name and commonly used by other firms. There is also no monopoly on the phrase 'anytime, anywhere'. The court ruled that there is no need for injunction at this stage and the issues should be decided at the trial.
Curb on sale of ship lifted
The Bombay High Court has vacated its December order of restraint against Amrut Dredging Company, purchaser of a ship, barring it from disposing it of or creating third party rights. The company bought the ship before its arrest for maritime claim by Khakhra Marine Transport against the former owner of the ship.
The latter's contention was that the purchaser was only an alter ego of the former owner and the transaction was a sham. It was alleged that the deal was financed through issuance of shares, which was a strange way of transaction, and there was no evidence of actual payment. It asked the court to 'pierce the corporate veil'. The court rejected the argument and stated that there was nothing wrong in payment part cash and part shares. Lifting the corporate veil is permissible only in case of established fraud. The court stated that at the time of arrest, the ownership had already changed.
AI has special status on contract labour
The Bombay High Court has declared that there is a specific legal sanction given to Air India to enter into contract with foreign airlines on ground handling services at Indian airports and therefore it is excluded from the provisions of the Contract Labour (Regulation & Abolition) Act and the Contract Labour (Regulation & Abolition) Central Rules.
The court made this ruling while allowing the writ petition of Air India which was being prosecuted by the Labour Enforcement Officer. The high court stated that in view of the rules under the Airports Authority of India Act, the national carrier could not have been prosecuted by the labour officers. Air India handled 14 ground services because foreign airlines did not have the infrastructure here.