It took nearly four decades for courts to decide a land acquisition dispute and the curtain fell on a clutch of cases in the Supreme Court only a few days ago. Calculating the land value was one of the points of discord. The land acquisition officer offered Rs 16.52 per sq yard for lands in Haryana, notified in 1977 for a housing project. The reference court raised the rate to Rs 22. The high court valued the land at Rs 50 per sq yard. Finally, the Supreme Court assessed the value at Rs 63, considering the industrialisation during the decades, price paid for adjacent lands in private sales and other principles laid down by the court. The judgment in this case, Bhupal Singh vs State of Haryana, said: “Indeed, in such cases, one can never come to any exact figure of price of lands because in the very nature of things, the prices are bound to vary from land to land and further they also depend upon the individual buyer-to-buyer, seller-to-seller and the reasons which led to such sale and purchase. However, the courts always exercise their discretion within the permissible parameters after appreciating the entire evidence.”
CCL rapped for frivolous litigation
The Supreme Court last week reproved the conduct of public sector Central Coalfields Ltd (CCL) for dragging coal companies to various high courts, opposing their demand for refund of excess charged from them following e-auction. In an earlier judgment involving Eastern Coalfields Ltd, the issues raised in the present batch of appeals had been settled. “The manner in which CCL contested the cases at all stages in different high courts and in this court by raising the same pleas despite their adjudication by this court lead us to draw a conclusion that untenable pleas were being raised by CCL just to defeat the legitimate claim of the citizens determined in their favour by this court in earlier litigation which was known to CCL,” the judgment in, SJ Coke Industries vs CCL, remarked. Setting aside the judgment of the Patna High Court, the apex court directed CCL to refund the excess charged from them with six per cent interest in three months. It also reproached two benches of the Patna High Court for not referring to its earlier judgment in the case of Eastern Coalfields, leading to unnecessary litigation. The courts below are bound to follow the law laid down by the Supreme Court. In this case, it was “really unfortunate” that the judges of the high court did not even refer to the Eastern Coalfields judgment while dealing with the coal companies’ writ petitions. The Supreme Court judgments are binding on the courts below under Article 141 of the Constitution, the judgment reminded the high courts.
SSI using big brand names must pay
A small-scale industry cannot claim exemption or concessional rate in excise duty if it affixes its products with the brand name of another manufacturer who is not eligible for the benefit, the Supreme Court has ruled in, Commissioner of Central Excise vs Stangen Immuno Diagnostics. In this case, the SSI used the name Stangen for its products which belonged to Dr Reddy’s Laboratories, a manufacturer of bulk drugs. The SSI claimed the benefit under a 1986 notification. Though it was granted, a show cause notice was later issued to it, alleging the claim was wrong. The commissioner dropped the proceedings on the ground that the goods were different. The court held it was wrong, as the brand name was used in relation to goods which showed connection to another firm which was not entitled to the benefit. The court remitted the case for further consideration on this aspect.
Meaning of ‘related persons’ in trade
The Supreme Court last week dismissed the appeal of a commissioner of central excise who challenged a judgment of the excise appellate tribunal in a dispute with detergent firm Henkel Marketing India. The court dealt with certain provisions of the Central Excise Act as these stood prior to the 2000 amendment of Section 4. The judgment discussed the definition of "related person" and the price at which valuation is to take place if sales are made to "related persons" in the course of wholesale trade. The issue arose in 1999 when the commissioner imposed penalty on Henkel and its holding company, Shaw Wallace. It was alleged that goods from the subsidiary company were cleared from the factory premises to the depot of Shaw Wallace at a much lower price as compared to the price at which these were sold by the firm in the market to wholesale purchaser Hindustan Lever and another. Though the firms are related, with holding/subsidiary relationship, “it does not follow that there is any arrangement of tax avoidance or tax evasion on the facts of this case,” the judgment said.
Clubbing export loss with domestic profit
A company which does export as well as domestic business cannot club its profit and loss to claim deduction under Section 80HHC (3) of the Income Tax Act, the Supreme Court stated in the judgment, Jeyar Consultant & Investment Ltd vs CIT. This company is engaged in the export of marine products and also financial consultancy and trading in equity shares. In the relevant assessment year, it made losses in the export business but recorded profits in the domestic trade. It claimed deductions invoking the provision dealing with “deduction in respect of profits retained for export business.” The revenue authorities denied it. The Supreme Court ruled that the prerequisite for claiming the deduction is that there should be profits from the export business. It rejected the argument of the company that even if there are losses in the export business, profits from the domestic business outweighed those losses and therefore the benefit should be given.
Rs 29-lakh damages for cook’s widow
The Supreme Court has raised the compensation for a road accident death from Rs 2 lakh to Rs 29 lakh on the appeal of a widow in the case, Chanderi Devi vs Jaspal Singh. The 32-year-old victim was an Indian chef in the Moghul Tandoor Restaurant in Heidelberg, Germany. He died in Sonepat in a car crash. The courts below assessed his income as below Rs 8,500 per month. The Supreme Court felt that was low and assessed it at Rs 15,000 per month. It granted Rs 26 lakh for loss of dependency of the widow, Rs 1 lakh each for loss of consortium and love and Rs 25,000 as funeral expenses.
