Finance Ministry fiat upheld

LEGAL DIGEST

The Supreme Court has dismissed a writ petition challenging a letter issued by the ministry of finance on July 9, 2001 as arbitrary and discriminatory and also violative of the Finance Act 1994 as amended in 2001.

The letter, clarifying Finance Act provisions, said the value of taxable service in photography was the gross amount charged from a customer for service rendered.

The petition, in C K Jidheesh vs Union of India case, wanted bifurcation of the gross receipts of processing of photographs into the portion attributable to goods and that attributable to services.

The Supreme Court asserted that contracts of the type entered into by colour labs were nothing but service contracts pure and simple. In such contracts, there was no element of sale of goods, the judgment emphasised while dismissing the petition.

Purchase tax calculation

The Supreme Court held last week in the Ponni Sugars Ltd vs Deputy Commercial Tax Officer case that charges paid by the sugar mill for arranging the transport of sugarcane from farms would be included in the taxable turnover of the mill for the purpose of calculating purchase tax under the Tamil Nadu Sales Tax Act.

It rejected the argument of the sugar mill that the price set under the Sugar Cane Control Order was the purchase price for determining the taxable turnover.

However, the court asserted that subsidy and expenses incurred for transportation shall form part of the price to be included in the purchase turnover.

Nirma plea upheld

The Supreme Court last week declined to lift the stay on the use of the name "Nima" which sounded like Nirma, used by Nirma Chemicals Works Ltd's brandname Nirma.

The firm, which sold detergents and soaps under the brandname Nirma moved the Ahmedabad civil court against the use of Nima for the flour mill products. The court granted a temporary injunction. The appeal against it before the Gujarat High Court was dismissed.

Therefore it appealed to the Supreme Court, arguing that the goods were different, the price was different and there was no confusion in the mind of consumers. The Supreme Court stated that it would not stay the high court order.

HUDA wins appeal

The Supreme Court has set aside the judgment of the National Consumer Disputes Redressal Commission granting Rs 2 lakh as compensation in the Haryana Urban Development Authority vs B K Sood.

The dispute was over the allotment of a booth in Panchkula complex. The allottee failed to pay the instalments, and instead alleged that HUDA had failed to fulfill the terms of the contract.

He moved the consumer commission only after 10 years, whereas, all claims must be filed within two years, according to the Consumer Protection Act. The Supreme Court pointed out this delay as the reason to allow the appeal of HUDA.

SBI action against retired officer

The Supreme Court has held that State Bank of India has the discretion to continue the service of an officer for the purpose of proceeding against him departmentally. This power has been given under Rules 20-A and 20-B of the service rules governing the public sector banks.

The Supreme Court overruled the Calcutta high court which had taken a contrary view in SBI vs Bela Bagchi. In this case, the officer was facing a charge of fraud. Disciplinary proceedings were initiated and they continued even after the date of his superannuation.

The high court rule d that it was not permissible to continue the proceedings beyond the date of superannuation. The bank appealed to the Supreme Court pointing out that the order of dismissal was passed during the extended period of service. The Supreme Court agreed with the bank and set aside the high court decision.