The Supreme Court held last week that a deputy general manager is not a person who is responsible to the company for the conduct of the business of the company and therefore he could not be held liable for issuing a cheque which was dishonoured. The Supreme Court stated in the judgment, KK Ahuja vs VK Vohra, that “it is not proper to subject all and sundry to be impleaded as accused in a complaint against a company, even when the requirements of Sections 138 and 141 of the Negotiable Instruments Act are not fulfilled.” The complaint should state how the accused person was responsible for issuing the cheque by the company, the Supreme Court asserted while quashing the summons against the DGM of a Delhi company.
Capital gains tax on soft drinks bottles sold
The Supreme Court held last week that profits on sale of bottles and crates purchased by soft drink companies before 31.3.1995 were not taxable as ‘balancing charge’ as they did not form part of the block of assets either under Section 41(1) or under Section 50 of the Income Tax Act. In respect of such sales after 1.4.1995, on account of deletion of proviso to Section 31(1)(ii) (vide Finance Act, 1995) such bottles and crates formed part of block of assets and consequently such assets became exigible to capital gains tax under Section 50. Thus, the court allowed appeals by bottling firms in the case, Nectar Beverages Ltd vs Deputy Commissioner).
Industrial court cannot order registration of union
No transport tax on passenger luggage
The Supreme Court has granted relief to bus operators in Uttar Pradesh in payment of tax on passengers’ luggage in the case, Prahlad Singh vs State of Uttar Pradesh . The transport commissioner demanded additional tax of Rs 45 for every metric ton on gross vehicles weight or part thereof in terms of Article II of the Uttar Pradesh Motor Vehicles Taxation Act 1997. The bus operators challenged this in the Allahabad high court. Their writ petitions were dismissed and they were told to pay the tax. They appealed to the Supreme Court.
It ruled that that Article II operated when the vehicles carry goods and not when the passengers carry their luggage during journey.
