ICI India appeal dismissed

LEGAL DIGEST

The Supreme Court last week dismissed the appeal of ICI India Ltd against the Orissa High Court judgment which had stated that the firm had violated the sales tax law to get concessional rates.

The company, with its registered office in Calcutta, is engaged in manufacturing and selling "bulk explosives". It set up units at Rourkela in Orissa to manufacture raw material and bought some from the Rourkela steel plant. It gave a sales tax declaration in regard to the latter which entitled it to get 4 per cent concessional rate.

The revenue authorities disallowed the concessional rate and demanded differential tax as provided in law. When the firm challenged it in the high court, it approved of the view of the tax authorities. The apex court upheld the high court decision.

ST vigilance officer's powers

The Supreme Court has held that the state government under the Orissa Sales Tax Act can appoint any person as sales tax officer (vigilance) and he could be conferred power to search, seize documents and recover amounts due on the spot.

In this case, Sales tax officer versus M/s Dutta Traders, the firm was a dealer in biscuits of different brands. When goods were being unloaded from the vehicle, the investigating officer of the vigilance wing found irregularities and asked the firm to pay tax and penalty.

The firm challenged it in the high court arguing that the vigilance officer was under the control of the Inspector General of Police and he had no power to make assessment of tax.

The Orissa High Court agreed with it and quashed the order of the commissioner of sales tax. The Supreme Court set aside the high court ruling and asserted that the vigilance officer has been given power under the Sales Tax Act to recover the amount on the spot.

Tribunal told to review Wimco decision

The Supreme Court last week asked the Customs, Excise & Gold (Control) Appellate Tribunal to reconsider its decision regarding the excise liability of scrap and parings of paper board which are generated during the process of manufacture of paper and paper board.

The question arose in the case of Wimco Ltd, Bareilly, Uttar Pradesh. The firm manufactures printed paper board boxes. During the course of such production, waste/scrap /parings are generated.

The authorities maintained that they were taxable but the firm was not declaring them as such. The firm argued that the scrap was not the result of the manufacture, that no new product came into existence and generation of scrap was not manufacture.

The revenue authorities rejected this explanation and demanded duty and imposed penalty. The Supreme Court stated that the tribunal had not adequately considered the disputed aspects and merely concluded that there was no manufacture. Therefore, it was asked to review the case.

Andhra HC to review ESI Corp case

The Supreme Court has asked the Andhra Pradesh High Court to reconsider the case of Hyderabad Industries Ltd versus ESI Corporation in which the question was whether the company was liable to pay contribution to the corporation in relation to the workers employed by its contractors for loading and unloading goods from the railways.

The high court agreed with the ESI Corporation that the company was liable to pay the contribution. The company appealed to the Supreme Court arguing that there were different categories of workers and the high court did not go into the details and merely dismissed its petition.

The Supreme Court found substance in this complaint and asked the high court to consider the factual background and arrive at its conclusion.

Mumbai firm asked to pay rent

The Supreme Court on Friday dismissed the appeal of a Mumbai company which had challenged its eviction by the landlord-firm on the ground that it was on the sick list of the Board of Industrial and Financial Reconstruction (BIFR) and its net paid-up share capital was below Rs 1 crore.

According to the Maharashtra Rent Control Act, 1999, public limited companies having a paid-up share capital of Rs 1 crore or more are exempted from its purview.

In this case, Carona Ltd versus Parvathy Swaminathan & Sons, the landlord alleged that while the eviction petition was pending, the company passed a resolution to reduce the capital below Rs 1 crore to get the benefit of the rent control law.

Rejecting this plea, the Supreme Court noted that the resolution was not approved by the BIFR. The company was asked to pay the rent for the past decade.