Granting subsidies in power tariff to certain sectors is the prerogative of the state government and the electricity regulatory commission has no authority to burden the state by extending the benefit to heavy industries, the Supreme Court stated last week while dismissing the appeals of heavy industries in Uttar Pradesh, in the judgment Paschimanchal Vidyut Vitaran Nigam vs Adarsh Textiles. The government had granted flat rate to farmers, weavers and light power consumers according to a policy decision. The state regulatory commission took the view that the policy had the effect of altering the rate schedule approved by it. Therefore, it issued an order restraining all electricity supply undertakings in the state from implementing the government order. The petition of the state power corporation opposing it was dismissed by the Allahabad High Court. On appeal, the Supreme Court ruled that the high court was wrong in extending the subsidy to heavy industries. "It is the prerogative of the state governments to extend the benefit of subsidy to a class of consumers; subsidy being a concession could not be enforced as a matter of right," the judgment said and added that the commission was bound to act according to the directives of the government under the provisions of the Electricity Act 2003 and the Reforms Act 1999.
Steamer agent to pay warehousing dues
When the consignee of a shipment does not take delivery of the cargo, the liability to pay demurrage and port charges for warehousing will fall on the agent of the ship owner or the steamer agent. The Supreme Court clarified this position last week in a batch of appeals against Bombay and Calcutta High Court judgments in the case, Forbes Forbes Campbell & Co vs Board of Trustees. In one typical case, the consignee of the goods did not clear it nor responded to any of the notices issued by the port authorities. Therefore, authorities sold the goods by public auction after a few years. Normally, the amount due is recovered from the sale by auction. But in these cases, the amounts fetched fell short of the total charges payable, leading to litigation. The port authorities filed a suit against the steamer agent for the balance amount. The suit was dismissed. It appealed to the high court, which held that the steamer agent was liable. The agents moved the Supreme Court arguing that under the provisions of the Major Port Trust Act and the bylaws no liability is cast either on the ship owner or his agent for payment of demurrage and port charges. The Supreme Court rejected this contention and dismissed the appeals.
Unfair dismissal of a women employee
The Supreme Court has severely criticised Cimco Birla Ltd for harassing a woman employee by "dragging her from one court to another from 1987 till date, nearly 27 years." The management had lost in several forums including the Bombay High Court over the years, but it did not stop the litigation against her at any stage. "In this process," said the Supreme Court, "the legitimate right of receiving monetary benefits was denied by taking untenable contentions, putting her and her family members to great hardship and mental agony." The labour court had found Cimco Birla guilty of unfair practice in dismissing Rowena Lewis. The industrial court had directed the company to pay her back wages and benefits with 12 per cent interest. While dismissing the appeal of Cimco Birla, the court imposed costs on it and directed it to comply with the order within a month.
Tax question referred to larger bench
The Supreme Court has doubted its own earlier decision in an income tax judgment on deductions and referred the question to a larger bench. The issue is whether the term 'profits and gains' is synonymous with the term 'income'. The earlier judgment of 2,000 (Motilal Pesticides Ltd) analysed sections 80-HH and 80-M and ruled that they have the same meaning. This is prima facie incorrect, according to the thinking of the new bench. Therefore, the question raised in the appeal case Vijay Industries vs Commissioner of Income Tax has been referred to a larger bench to be set up by the Chief Justice.
Arbitrator appointed on distillery JV
The Supreme Court has appointed its former judge, Justice B Sudershan Reddy, as sole arbitrator in a dispute over a joint venture agreement in the case, Demerara Distilleries vs Demerara Distilleries. The former company argued that the agreement contemplated equal participation in the equity of the joint venture and covered transfer of technology and trade marks. It alleged that the other company failed to fulfil the contractual obligations. So it applied under the Arbitration and Conciliation Act for appointment of an arbitrator. It was opposed by the rival firm contending that the agreement was between it and a foreign firm incorporated in Guyana. The petitioner company had not signed the signed the agreement. The court rejected the objection and appointed the arbitrator.
CCI probe can't be stayed
The Delhi High Court stated last week that the Competition Commission of India (CCI) can appeal to it against an order staying investigation by its director general (DG) on a complaint of abuse of dominant position. In this case, Bull Machines Ltd filed information before CCI against JCB India Ltd accusing it of abuse of dominant position. The order was challenged in the high court. A single judge bench stayed the DG's probe report. CCI appealed to the division bench. It stated that since the investigation by the DG formed part of the regulatory jurisdiction of CCI, any order hampering the investigation affected its functioning. So the right to assail a stay order was available to the complainant as well as CCI.
CBDT rapped for calling names
The Central Board of Direct Taxes (CBDT) adopted an "unduly technical or pedantic approach" while dubbing an assessee firm as a "habitual late filer, with a view to avoid scrutiny/enquiry". The Bombay High Court stated so last week in the case, Artist Tree Ltd vs CBDT. The firm filed its returns for 1997-98 in September 1999, some 22 months late. The assessing officer, therefore, declined to condone the delay and examine the case on merit for refund of Rs 6. 34 lakh. The firm submitted that it had shifted office and therefore there was some delay in tracing documents. It was "genuine hardship" recognised by law, and it should be liberally applied, it argued. Accepting these arguments, the high court set aside the CBDT order and asked it to scrutinise the returns on merit.
