Facts of the Case:-* ED registered an ECIR against Ram Kishor Arora in connection with an alleged money laundering case arising out of a scheduled offence.* He was arrested by the ED under “Section 19 of the PMLA”.* He challenged his arrest before the Delhi High Court, arguing that: * the arrest was illegal; * he was not supplied with a copy of the ECIR; and * the mandatory requirements of Section 19 were not followed. * The Delhi High Court dismissed his petition, after which he approached the Supreme Court. Issues1. Whether supplying a copy of the ECIR to the accused is mandatory before arrest?2. Whether ED complied with Section 19 of the PMLA while arresting the appellant?3. Whether the arrest was illegal merely because the ECIR was not furnished? Observations of the Supreme CourtECIR is an internal document of the ED. It is not equivalent to an FIR, and there is no statutory requirement under the PMLA to supply a copy of the ECIR to the accused.* Under Section 19 PMLA, the authorised officer must have “reason to believe” that the person is guilty of an offence under Section 3; * record those reasons “in writing”and * inform the arrested person of the grounds of arrest.* The Court held that “communicating the grounds of arrest is mandatory”, but “supplying the ECIR is not mandatory”. Decision* The Supreme Court “dismissed the appeal”.* It upheld the validity of the arrest, holding that the requirements of Section 19 had been complied with.* The Court reaffirmed that: * ECIR is only an internal document of the ED. * Non-supply of the ECIR does not make the arrest illegal. * Compliance with Section 19 PMLA is the relevant legal requirement.
Ram Kishor Arora v. Directorate of Enforcement 15-12-2023
Facts of the Case:-* ED registered an ECIR against Ram Kishor Arora in connection with an alleged money laundering case arising out of a scheduled offence.* He was arrested by the ED under “Section 19 of the PMLA”.* He challenged his arrest before the Delhi High Court, arguing that: * the arrest was illegal; * he was not supplied with a copy of the ECIR; and * the mandatory requirements of Section 19 were not followed. * The Delhi High Court dismissed his petition, after which he approached the Supreme Court. Issues1. Whether supplying a copy of the ECIR to the accused is mandatory before arrest?2. Whether ED complied with Section 19 of the PMLA while arresting the appellant?3. Whether the arrest was illegal merely because the ECIR was not furnished? Observations of the Supreme CourtECIR is an internal document of the ED. It is not equivalent to an FIR, and there is no statutory requirement under the PMLA to supply a copy of the ECIR to the accused.* Under Section 19 PMLA, the authorised officer must have “reason to believe” that the person is guilty of an offence under Section 3; * record those reasons “in writing”and * inform the arrested person of the grounds of arrest.* The Court held that “communicating the grounds of arrest is mandatory”, but “supplying the ECIR is not mandatory”. Decision* The Supreme Court “dismissed the appeal”.* It upheld the validity of the arrest, holding that the requirements of Section 19 had been complied with.* The Court reaffirmed that: * ECIR is only an internal document of the ED. * Non-supply of the ECIR does not make the arrest illegal. * Compliance with Section 19 PMLA is the relevant legal requirement.
Facts :The petitioners filed Special Leave Petitions challenging the judgment and order dated 02.08.2023 passed by the High Court at Calcutta. The dispute pertained to tax demand raised against the respondent. The matter was placed before the Supreme Court for admission, including an application for condonation of delay.Court Decision:The Supreme Court condoned the delay but declined to interfere with the impugned judgment of the High Court in exercise of its jurisdiction under Article 136. The Court noted the facts and circumstances of the case and the relatively low tax demand, and dismissed the Special Leave Petitions.
Assistant Commissioner of State Tax, Ballygunge Charge & Ors. v. Suncraft Energy Private Limited & Ors. 14-12-2023
Facts :The petitioners filed Special Leave Petitions challenging the judgment and order dated 02.08.2023 passed by the High Court at Calcutta. The dispute pertained to tax demand raised against the respondent. The matter was placed before the Supreme Court for admission, including an application for condonation of delay.Court Decision:The Supreme Court condoned the delay but declined to interfere with the impugned judgment of the High Court in exercise of its jurisdiction under Article 136. The Court noted the facts and circumstances of the case and the relatively low tax demand, and dismissed the Special Leave Petitions.
Background. A search assessment for AY 2006-07 was framed in the name of Mahagun Realtors (P) Ltd., which had amalgamated into Mahagun India Pvt. Ltd. The plea that the assessment was a nullity for having been made on a non-existent company was raised for the first time in cross-objections before the ITAT, after the assessee had participated fully throughout.Observations of the Court. The Court found that the amalgamation was known to the assessee from the stage of search and seizure; the return filed pursuant to notice suppressed the amalgamation, the response to Query 27(b) being “N.A.”; appeals before the CIT and the cross-objection before the ITAT were filed by the transferor “represented by” the transferee; and even the counter affidavit before the Supreme Court was affirmed by a director described as of the transferor company. The assessment order attributed specific surrendered amounts to the transferor and was expressed to be of the transferor as assessee, represented by the transferee. The assessing officer’s choice of expressing the liability in that form could not nullify the order.The Court held, before concluding, that whether corporate death of an entity upon amalgamation per se invalidates an assessment order ordinarily cannot be determined on a bare application of Section 481 of the Companies Act, 1956 and its equivalent in the 2013 Act, but would depend on the terms of the amalgamation and the facts of each case.Final verdict. The appeal was allowed, the judgment of the High Court was set aside, and the matter was restored to the file of the ITAT to be heard on the merits of the appeal and cross-objections, on issues other than the nullity of the assessment order. This decision is the principal authority the revenue may be expected to press against the line of cases set out above.
Principal Commissioner of Income Tax, New Delhi v. M/s Mahagun Realtors (P) Ltd. 05-04-2022
Background. A search assessment for AY 2006-07 was framed in the name of Mahagun Realtors (P) Ltd., which had amalgamated into Mahagun India Pvt. Ltd. The plea that the assessment was a nullity for having been made on a non-existent company was raised for the first time in cross-objections before the ITAT, after the assessee had participated fully throughout.Observations of the Court. The Court found that the amalgamation was known to the assessee from the stage of search and seizure; the return filed pursuant to notice suppressed the amalgamation, the response to Query 27(b) being “N.A.”; appeals before the CIT and the cross-objection before the ITAT were filed by the transferor “represented by” the transferee; and even the counter affidavit before the Supreme Court was affirmed by a director described as of the transferor company. The assessment order attributed specific surrendered amounts to the transferor and was expressed to be of the transferor as assessee, represented by the transferee. The assessing officer’s choice of expressing the liability in that form could not nullify the order.The Court held, before concluding, that whether corporate death of an entity upon amalgamation per se invalidates an assessment order ordinarily cannot be determined on a bare application of Section 481 of the Companies Act, 1956 and its equivalent in the 2013 Act, but would depend on the terms of the amalgamation and the facts of each case.Final verdict. The appeal was allowed, the judgment of the High Court was set aside, and the matter was restored to the file of the ITAT to be heard on the merits of the appeal and cross-objections, on issues other than the nullity of the assessment order. This decision is the principal authority the revenue may be expected to press against the line of cases set out above.
BACKGROUNDThe National Consumer Disputes Redressal Commission directed the appellant to pay Rs.265.01 Crores with interest at 10% p.a. from 19.09.2016. The complainant had obtained two insurance policies from the appellant by paying a premium of Rs.10,38,03,912/-, obtained for a construction contract awarded by the Government of Basra, Iraq. When the contract was withdrawn due to internal conflict and payments were suspended, the appellant rejected the insurance claim. The complaint was filed and decided under the Consumer Protection Act, 1986. The appellant filed an appeal before the Supreme Court under Section 23 of the 1986 Act, depositing Rs.50,000/- as pre-deposit in accordance with the 1986 Act. However, the Consumer Protection Act, 2019 had come into force on 20.07.2020, and under Section 67 of the 2019 Act, the condition for filing an appeal is deposit of 50% of the entire awarded amount — with no upper ceiling — which would mean depositing approximately Rs.132 Crores. FACTSThe pre-deposit condition under the two Acts is starkly different. Under the 1986 Act, the condition was 50% of the awarded amount or Rs.50,000, whichever is less. Under the 2019 Act, it is a flat 50% of the awarded amount with no ceiling whatsoever. The appellant filed an Interlocutory Application praying that the appeal be entertained under the conditions prescribed by the 1986 Act, i.e., the law applicable at the time the complaint was filed and proceedings were initiated. The respondent contended that the 2019 Act applies as it was in force at the time of filing of the appeal and that pre-deposit is a mere procedural requirement, hence retrospective. The Court examined a long line of Constitution Bench judgments on the doctrine of vested right of appeal and whether imposition of a more onerous pre-deposit condition amounts to curtailing a substantive right that had already accrued. COURT OBSERVATIONS (Verbatim)(From Hoosein Kasam Dada — approved and relied upon by the Court): "The true implication of the above observation as of the decisions in the other cases referred to above is that the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre-existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right."(From Garikapati Veeraya — Constitution Bench principles approved and applied): "(ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. (v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise."(From State of Bombay v. Supreme General Films Exchange — applied by the Court): "it has been held that an impairment of the right of appeal by putting a new restriction thereon or imposing a more onerous condition is not a matter of procedure only; it impairs or imperils a substantive right and an enactment which does so is not retrospective unless it says so expressly or by necessary intendment."(Court's own final conclusion — Para 34): "In view of the binding precedents of the Constitution Bench judgments referred to above, we hold that onerous condition of payment of 50% of the amount awarded will not be applicable to the complaints filed prior to the commencement of the 2019 Act." FINAL VERDICTThe Interlocutory Application was allowed. The Supreme Court held that the more onerous pre-deposit condition of 50% of the entire awarded amount under Section 67 of the Consumer Protection Act, 2019 will not apply to appeals arising from complaints filed prior to the commencement of the 2019 Act. The right of appeal is a vested substantive right governed by the law in force at the time of initiation of the proceedings, and it cannot be curtailed by the new law unless the new law expressly or by necessary intendment says so.👍 IN FAVOUR OF APPELLANT KEY CASES REFERRED AND RELIED UPON BY THE COURT#Case NameCitation1Nogendra Nath Bose v. Mon Mohan Singha Roy & Ors.AIR 1931 Cal. 100 (Calcutta HC — approved by SC)2Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh & Ors.AIR 1953 SC 221 (Supreme Court)3Garikapati Veeraya v. N. Subbiah Choudhry & Ors.AIR 1957 SC 540 (Constitution Bench)4State of Bombay v. M/s. Supreme General Films Exchange Ltd. & Anr.AIR 1960 SC 980 (Three-Judge Bench)5Vitthalbhai Naranbhai Patel v. Commissioner of Sales Tax, M.P., NagpurAIR 1967 SC 344 (Constitution Bench)6M/s. Hardeodas Jagannath v. State of Assam & Ors.AIR 1970 SC 724 (Supreme Court)7K. Raveendranathan Nair & Anr. v. Commissioner of Income Tax & Ors.(2017) 9 SCC 355 (Supreme Court)8Anant Mills Co. Ltd. v. State of Gujarat & Ors.(1975) 2 SCC 175 (Four-Judge Bench)9Ramesh Singh & Anr. v. Cinta Devi & Ors.(1996) 3 SCC 142 (Supreme Court)10M/s Gurcharan Singh Baldev Singh v. Yashwant Singh & Ors.(1992) 1 SCC 428 (Supreme Court)11Thirumalai Chemicals Limited v. Union of India & Ors.(2011) 6 SCC 739 (Supreme Court)12Neena Aneja & Anr. v. Jai Prakash Associates Ltd.2021 SCC OnLine SC 225 (Supreme Court)13Newtech Promoters and Developers Pvt. Ltd. v. State of UP & Ors.2021 SCC OnLine SC 1044 (Three-Judge Bench)14New India Assurance Co. Ltd. v. Smt. Shanti Misra(1975) 2 SCC 840 (Supreme Court)15M/s. Dream Castle & Anr. v. Union of India & Ors.W.P. No. 13431 of 2015 decided on 18.04.2016 (Madras HC, Division Bench)
BACKGROUNDThe National Consumer Disputes Redressal Commission directed the appellant to pay Rs.265.01 Crores with interest at 10% p.a. from 19.09.2016. The complainant had obtained two insurance policies from the appellant by paying a premium of Rs.10,38,03,912/-, obtained for a construction contract awarded by the Government of Basra, Iraq. When the contract was withdrawn due to internal conflict and payments were suspended, the appellant rejected the insurance claim. The complaint was filed and decided under the Consumer Protection Act, 1986. The appellant filed an appeal before the Supreme Court under Section 23 of the 1986 Act, depositing Rs.50,000/- as pre-deposit in accordance with the 1986 Act. However, the Consumer Protection Act, 2019 had come into force on 20.07.2020, and under Section 67 of the 2019 Act, the condition for filing an appeal is deposit of 50% of the entire awarded amount — with no upper ceiling — which would mean depositing approximately Rs.132 Crores. FACTSThe pre-deposit condition under the two Acts is starkly different. Under the 1986 Act, the condition was 50% of the awarded amount or Rs.50,000, whichever is less. Under the 2019 Act, it is a flat 50% of the awarded amount with no ceiling whatsoever. The appellant filed an Interlocutory Application praying that the appeal be entertained under the conditions prescribed by the 1986 Act, i.e., the law applicable at the time the complaint was filed and proceedings were initiated. The respondent contended that the 2019 Act applies as it was in force at the time of filing of the appeal and that pre-deposit is a mere procedural requirement, hence retrospective. The Court examined a long line of Constitution Bench judgments on the doctrine of vested right of appeal and whether imposition of a more onerous pre-deposit condition amounts to curtailing a substantive right that had already accrued. COURT OBSERVATIONS (Verbatim)(From Hoosein Kasam Dada — approved and relied upon by the Court): "The true implication of the above observation as of the decisions in the other cases referred to above is that the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre-existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right."(From Garikapati Veeraya — Constitution Bench principles approved and applied): "(ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. (v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise."(From State of Bombay v. Supreme General Films Exchange — applied by the Court): "it has been held that an impairment of the right of appeal by putting a new restriction thereon or imposing a more onerous condition is not a matter of procedure only; it impairs or imperils a substantive right and an enactment which does so is not retrospective unless it says so expressly or by necessary intendment."(Court's own final conclusion — Para 34): "In view of the binding precedents of the Constitution Bench judgments referred to above, we hold that onerous condition of payment of 50% of the amount awarded will not be applicable to the complaints filed prior to the commencement of the 2019 Act." FINAL VERDICTThe Interlocutory Application was allowed. The Supreme Court held that the more onerous pre-deposit condition of 50% of the entire awarded amount under Section 67 of the Consumer Protection Act, 2019 will not apply to appeals arising from complaints filed prior to the commencement of the 2019 Act. The right of appeal is a vested substantive right governed by the law in force at the time of initiation of the proceedings, and it cannot be curtailed by the new law unless the new law expressly or by necessary intendment says so.👍 IN FAVOUR OF APPELLANT KEY CASES REFERRED AND RELIED UPON BY THE COURT#Case NameCitation1Nogendra Nath Bose v. Mon Mohan Singha Roy & Ors.AIR 1931 Cal. 100 (Calcutta HC — approved by SC)2Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh & Ors.AIR 1953 SC 221 (Supreme Court)3Garikapati Veeraya v. N. Subbiah Choudhry & Ors.AIR 1957 SC 540 (Constitution Bench)4State of Bombay v. M/s. Supreme General Films Exchange Ltd. & Anr.AIR 1960 SC 980 (Three-Judge Bench)5Vitthalbhai Naranbhai Patel v. Commissioner of Sales Tax, M.P., NagpurAIR 1967 SC 344 (Constitution Bench)6M/s. Hardeodas Jagannath v. State of Assam & Ors.AIR 1970 SC 724 (Supreme Court)7K. Raveendranathan Nair & Anr. v. Commissioner of Income Tax & Ors.(2017) 9 SCC 355 (Supreme Court)8Anant Mills Co. Ltd. v. State of Gujarat & Ors.(1975) 2 SCC 175 (Four-Judge Bench)9Ramesh Singh & Anr. v. Cinta Devi & Ors.(1996) 3 SCC 142 (Supreme Court)10M/s Gurcharan Singh Baldev Singh v. Yashwant Singh & Ors.(1992) 1 SCC 428 (Supreme Court)11Thirumalai Chemicals Limited v. Union of India & Ors.(2011) 6 SCC 739 (Supreme Court)12Neena Aneja & Anr. v. Jai Prakash Associates Ltd.2021 SCC OnLine SC 225 (Supreme Court)13Newtech Promoters and Developers Pvt. Ltd. v. State of UP & Ors.2021 SCC OnLine SC 1044 (Three-Judge Bench)14New India Assurance Co. Ltd. v. Smt. Shanti Misra(1975) 2 SCC 840 (Supreme Court)15M/s. Dream Castle & Anr. v. Union of India & Ors.W.P. No. 13431 of 2015 decided on 18.04.2016 (Madras HC, Division Bench)
BACKGROUNDRadha Krishan Industries, a lead manufacturer registered under GST since July 2017, had purchased goods from GM Powertech, Kala-Amb. Investigation revealed GM Powertech had fraudulently claimed ITC from fake firms. GM Powertech's partners were arrested in December 2018 and a demand of Rs. 39.48 crores was confirmed against GM Powertech under Section 74(9). On 21 October 2020, the Commissioner delegated his powers under Section 83 to the Joint Commissioner. On 28 October 2020, the Joint Commissioner provisionally attached the appellant's receivables — Rs. 4 crores from Fujikawa Power and Rs. 2.91 crores from Deepak International — on the ground that appellant had fraudulently claimed ITC of Rs. 5.03 crores based on supplies from GM Powertech. Crucially, the Show Cause Notice against the appellant under Section 74(1) was issued only on 27 November 2020 — i.e., after the provisional attachment. The appellant filed objections on 4 November 2020 which were rejected on 6 November 2020 without granting any personal hearing. The appellant challenged the provisional attachment before the HP High Court under Article 226, which dismissed the writ petition holding that an efficacious alternative remedy by way of appeal under Section 107 of the HPGST Act was available. The appellant approached the Supreme Court.COURT OBSERVATIONS (Verbatim)On nature of power of provisional attachment:"The power to levy a provisional attachment is draconian in nature. By the exercise of the power, a property belonging to the taxable person may be attached, including a bank account... Each of these ingredients must be strictly applied before a provisional attachment on the property of an assessee can be levied.""The Commissioner must be alive to the fact that such provisions are not intended to authorize Commissioners to make preemptive strikes on the property of the assessee, merely because property is available for being attached."On necessity vs. expediency:"By utilizing the expression 'it is necessary so to do' the legislature has evinced an intent that an attachment is authorized not merely because it is expedient to do so... but because it is necessary to do so in order to protect interest of the government revenue. Necessity postulates that the interest of the revenue can be protected only by a provisional attachment without which the interest of the revenue would stand defeated."On tangible material:"The formation of the opinion must be based on tangible material which indicates a live link to the necessity to order a provisional attachment to protect the interest of the government revenue."On pendency of proceedings:"We are unable to accept the contention of the respondent that merely because proceedings were pending/concluded against another taxable entity, that is GM Powertech, the powers of Section 83 could also be attracted against the appellant. This interpretation would be an expansion of a draconian power such as that contained in Section 83, which must necessarily be interpreted restrictively."On the impugned order:"The order of the Joint Commissioner contains absolutely no basis for the formation of the opinion that a provisional attachment was necessary to safeguard the interest of the revenue. No tangible material has been disclosed. The record clearly reveals a breach of the mandatory pre-conditions for the valid exercise of powers under Section 83 of the HPGST Act."On Rule 159(5) — hearing:"It is not open to the Commissioner, as has been stated in the present case, to hold the view that the only safeguard under sub-Rule 5 is to submit an objection without an opportunity of a personal hearing. Such a construction would be plainly contrary to sub-Rule 5 which contemplates both the submission of an objection to the attachment and an opportunity of being heard... Both the right to submit an objection and to be afforded an opportunity of being heard are valuable safeguards.""The Commissioner who hears the objections must pass a reasoned order either accepting or rejecting the objections."On maintainability of writ:"The Joint Commissioner while ordering a provisional attachment under Section 83 was acting as a delegate of the Commissioner... the order passed by the Joint Commissioner as a delegate of the Commissioner was not subject to an appeal under Section 107(1) and the only remedy that was available was in the form of the invocation of the writ jurisdiction under Article 226 of the Constitution. The High Court was, therefore, clearly in error in declining to entertain the writ proceedings."FINAL VERDICTAppeal allowed. Orders of provisional attachment dated 28 October 2020 set aside. High Court judgment dated 1 January 2021 quashed. Writ petition under Article 226 held maintainable and provisional attachment held illegal for non-fulfillment of conditions under Section 83 and breach of Rule 159(5).
Radha Krishan Industries v. State of Himachal Pradesh & Ors 20-04-2021
BACKGROUNDRadha Krishan Industries, a lead manufacturer registered under GST since July 2017, had purchased goods from GM Powertech, Kala-Amb. Investigation revealed GM Powertech had fraudulently claimed ITC from fake firms. GM Powertech's partners were arrested in December 2018 and a demand of Rs. 39.48 crores was confirmed against GM Powertech under Section 74(9). On 21 October 2020, the Commissioner delegated his powers under Section 83 to the Joint Commissioner. On 28 October 2020, the Joint Commissioner provisionally attached the appellant's receivables — Rs. 4 crores from Fujikawa Power and Rs. 2.91 crores from Deepak International — on the ground that appellant had fraudulently claimed ITC of Rs. 5.03 crores based on supplies from GM Powertech. Crucially, the Show Cause Notice against the appellant under Section 74(1) was issued only on 27 November 2020 — i.e., after the provisional attachment. The appellant filed objections on 4 November 2020 which were rejected on 6 November 2020 without granting any personal hearing. The appellant challenged the provisional attachment before the HP High Court under Article 226, which dismissed the writ petition holding that an efficacious alternative remedy by way of appeal under Section 107 of the HPGST Act was available. The appellant approached the Supreme Court.COURT OBSERVATIONS (Verbatim)On nature of power of provisional attachment:"The power to levy a provisional attachment is draconian in nature. By the exercise of the power, a property belonging to the taxable person may be attached, including a bank account... Each of these ingredients must be strictly applied before a provisional attachment on the property of an assessee can be levied.""The Commissioner must be alive to the fact that such provisions are not intended to authorize Commissioners to make preemptive strikes on the property of the assessee, merely because property is available for being attached."On necessity vs. expediency:"By utilizing the expression 'it is necessary so to do' the legislature has evinced an intent that an attachment is authorized not merely because it is expedient to do so... but because it is necessary to do so in order to protect interest of the government revenue. Necessity postulates that the interest of the revenue can be protected only by a provisional attachment without which the interest of the revenue would stand defeated."On tangible material:"The formation of the opinion must be based on tangible material which indicates a live link to the necessity to order a provisional attachment to protect the interest of the government revenue."On pendency of proceedings:"We are unable to accept the contention of the respondent that merely because proceedings were pending/concluded against another taxable entity, that is GM Powertech, the powers of Section 83 could also be attracted against the appellant. This interpretation would be an expansion of a draconian power such as that contained in Section 83, which must necessarily be interpreted restrictively."On the impugned order:"The order of the Joint Commissioner contains absolutely no basis for the formation of the opinion that a provisional attachment was necessary to safeguard the interest of the revenue. No tangible material has been disclosed. The record clearly reveals a breach of the mandatory pre-conditions for the valid exercise of powers under Section 83 of the HPGST Act."On Rule 159(5) — hearing:"It is not open to the Commissioner, as has been stated in the present case, to hold the view that the only safeguard under sub-Rule 5 is to submit an objection without an opportunity of a personal hearing. Such a construction would be plainly contrary to sub-Rule 5 which contemplates both the submission of an objection to the attachment and an opportunity of being heard... Both the right to submit an objection and to be afforded an opportunity of being heard are valuable safeguards.""The Commissioner who hears the objections must pass a reasoned order either accepting or rejecting the objections."On maintainability of writ:"The Joint Commissioner while ordering a provisional attachment under Section 83 was acting as a delegate of the Commissioner... the order passed by the Joint Commissioner as a delegate of the Commissioner was not subject to an appeal under Section 107(1) and the only remedy that was available was in the form of the invocation of the writ jurisdiction under Article 226 of the Constitution. The High Court was, therefore, clearly in error in declining to entertain the writ proceedings."FINAL VERDICTAppeal allowed. Orders of provisional attachment dated 28 October 2020 set aside. High Court judgment dated 1 January 2021 quashed. Writ petition under Article 226 held maintainable and provisional attachment held illegal for non-fulfillment of conditions under Section 83 and breach of Rule 159(5).
Facts:The dispute arose from demands of sales tax on supply of food and drinks by clubs to their permanent members. The clubs contended that such supplies were governed by the doctrine of mutuality and did not constitute “sale”. The Tribunal and High Court held that no taxable sale occurred as members and the club were not distinct persons. The matter was referred to a larger Bench to examine the impact of the 46th Constitutional Amendment on the doctrine of mutuality. Court Decision:The Court held that the doctrine of mutuality continues to apply even after the 46th Constitutional Amendment. It ruled that Article 366(29-A)(e) applies only to unincorporated associations and does not cover incorporated clubs. The Court held that in members’ clubs, there is no transfer of property from one person to another, as members and the club are not distinct. Accordingly, supply of food and beverages by clubs to their members does not constitute a “sale” and is not liable to sales tax/VAT. Cases Referred by Court:• C.T.O. v. Young Men’s Indian Association • State of Madras v. Gannon Dunkerley & Co. • Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi • State of Punjab v. Associated Hotels of India Ltd. • Deputy Commercial Tax Officer v. Enfield India Ltd. • Bacha F. Guzdar v. Commissioner of Income Tax • Graff v. Evans • Trebanog Working Men’s Club and Institute Ltd. v. Macdonald• BSNL v. Union of India
State of West Bengal & Ors. v. Calcutta Club Limited & Ors. 03-10-2019
Facts:The dispute arose from demands of sales tax on supply of food and drinks by clubs to their permanent members. The clubs contended that such supplies were governed by the doctrine of mutuality and did not constitute “sale”. The Tribunal and High Court held that no taxable sale occurred as members and the club were not distinct persons. The matter was referred to a larger Bench to examine the impact of the 46th Constitutional Amendment on the doctrine of mutuality. Court Decision:The Court held that the doctrine of mutuality continues to apply even after the 46th Constitutional Amendment. It ruled that Article 366(29-A)(e) applies only to unincorporated associations and does not cover incorporated clubs. The Court held that in members’ clubs, there is no transfer of property from one person to another, as members and the club are not distinct. Accordingly, supply of food and beverages by clubs to their members does not constitute a “sale” and is not liable to sales tax/VAT. Cases Referred by Court:• C.T.O. v. Young Men’s Indian Association • State of Madras v. Gannon Dunkerley & Co. • Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi • State of Punjab v. Associated Hotels of India Ltd. • Deputy Commercial Tax Officer v. Enfield India Ltd. • Bacha F. Guzdar v. Commissioner of Income Tax • Graff v. Evans • Trebanog Working Men’s Club and Institute Ltd. v. Macdonald• BSNL v. Union of India
Facts:The case arose from a batch of matters decided by the Delhi High Court concerning denial of input tax credit to purchasing dealers under the Delhi VAT Act. The tax authorities challenged the High Court’s ruling, which had granted relief to dealers claiming bona fide purchase transactions. The petitioner filed a Special Leave Petition before the Supreme Court against the High Court judgment dated 26.10.2017. The issue involved whether purchasing dealers could be denied input tax credit due to default by selling dealers. Court Decision:The Supreme Court declined to interfere with the impugned judgment of the Delhi High Court and dismissed the Special Leave Petition. The Court, however, granted liberty to the petitioner to approach the High Court with necessary particulars in cases where transactions were allegedly not bona fide and seek appropriate directions.
Commissioner of Trade and Taxes, Delhi v. Arise India Limited 10-02-2018
Facts:The case arose from a batch of matters decided by the Delhi High Court concerning denial of input tax credit to purchasing dealers under the Delhi VAT Act. The tax authorities challenged the High Court’s ruling, which had granted relief to dealers claiming bona fide purchase transactions. The petitioner filed a Special Leave Petition before the Supreme Court against the High Court judgment dated 26.10.2017. The issue involved whether purchasing dealers could be denied input tax credit due to default by selling dealers. Court Decision:The Supreme Court declined to interfere with the impugned judgment of the Delhi High Court and dismissed the Special Leave Petition. The Court, however, granted liberty to the petitioner to approach the High Court with necessary particulars in cases where transactions were allegedly not bona fide and seek appropriate directions.
Facts of the CaseThe matter arose from a Special Leave Petition challenging a judgment of the High Court of Himachal Pradesh. During the hearing, an important legal question emerged regarding the admissibility of electronic evidence and the necessity of videography at crime scenes. The Court also considered whether the requirement of a certificate under Section 65B(4) of the Evidence Act is mandatory for admissibility of electronic records.In earlier proceedings, the Court had recorded submissions from the Additional Solicitor General regarding the usefulness of videography in crime scene investigation. It was noted that videography and digital photography could enhance transparency and accuracy in investigation. The Union Government had also constituted a Committee of Experts to prepare a roadmap and Standard Operating Procedure for videography at crime scenes.Simultaneously, a legal issue arose in connected matters concerning the interpretation of Sections 65A and 65B of the Evidence Act. The apprehension expressed was that if the requirement of a certificate under Section 65B(4) was treated as mandatory in all circumstances, electronic evidence produced by a person not in control of the device would be excluded, resulting in denial of justice.The questions decided by the Court were:Whether electronic evidence is admissible only in compliance with Section 65B of the Evidence Act.Whether the certificate under Section 65B(4) is mandatory in all cases.Whether procedural requirements under Section 65B can be relaxed in appropriate cases.Court Observations and DecisionThe Court examined earlier decisions dealing with admissibility of electronic evidence. It noted that electronic evidence is admissible subject to safeguards regarding authenticity and reliability. The Court observed that Sections 65A and 65B of the Evidence Act are procedural provisions intended to supplement the law on admissibility of electronic records.The Court clarified that primary electronic evidence is admissible under Section 62 of the Evidence Act and is not governed by Section 65B. Section 65B applies to secondary electronic evidence.Importantly, the Court held that the requirement of certificate under Section 65B(4) is not always mandatory. The requirement applies when electronic evidence is produced by a person who is in possession and control of the device from which the electronic record is generated and is capable of producing such certificate.Where electronic evidence is produced by a person who is not in possession of the device, Sections 63 and 65 of the Evidence Act can be invoked. In such cases, insisting on a certificate under Section 65B(4) would result in denial of justice.The Court clarified the legal position that the requirement of certificate under Section 65B(4) is procedural and can be relaxed by the Court in the interest of justice. Electronic evidence cannot be excluded merely on technical grounds if it is otherwise relevant and authentic.Case ReferredRam Singh and Others v. Col. Ram Singh, 1985 (Supp) SCC 611, Supreme Court of India.R. v. Maqsud Ali, (1965) 2 All ER 464, Court of Criminal Appeal (UK).R. v. Robson, (1972) 2 All ER 699, Court of Appeal (UK).Tukaram S. Dighole v. Manikrao Shivaji Kokate, (2010) 4 SCC 329, Supreme Court of India.Tomaso Bruno v. State of Uttar Pradesh, (2015) 7 SCC 178, Supreme Court of India.Mohd. Ajmal Amir Kasab v. State of Maharashtra, (2012) 9 SCC 1, Supreme Court of India.State (NCT of Delhi) v. Navjot Sandhu, (2005) 11 SCC 600, Supreme Court of India.Anvar P.V. v. P.K. Basheer, (2014) 10 SCC 473, Supreme Court of India.
Shafhi Mohammad v. State of Himachal Pradesh 30-01-2018
Facts of the CaseThe matter arose from a Special Leave Petition challenging a judgment of the High Court of Himachal Pradesh. During the hearing, an important legal question emerged regarding the admissibility of electronic evidence and the necessity of videography at crime scenes. The Court also considered whether the requirement of a certificate under Section 65B(4) of the Evidence Act is mandatory for admissibility of electronic records.In earlier proceedings, the Court had recorded submissions from the Additional Solicitor General regarding the usefulness of videography in crime scene investigation. It was noted that videography and digital photography could enhance transparency and accuracy in investigation. The Union Government had also constituted a Committee of Experts to prepare a roadmap and Standard Operating Procedure for videography at crime scenes.Simultaneously, a legal issue arose in connected matters concerning the interpretation of Sections 65A and 65B of the Evidence Act. The apprehension expressed was that if the requirement of a certificate under Section 65B(4) was treated as mandatory in all circumstances, electronic evidence produced by a person not in control of the device would be excluded, resulting in denial of justice.The questions decided by the Court were:Whether electronic evidence is admissible only in compliance with Section 65B of the Evidence Act.Whether the certificate under Section 65B(4) is mandatory in all cases.Whether procedural requirements under Section 65B can be relaxed in appropriate cases.Court Observations and DecisionThe Court examined earlier decisions dealing with admissibility of electronic evidence. It noted that electronic evidence is admissible subject to safeguards regarding authenticity and reliability. The Court observed that Sections 65A and 65B of the Evidence Act are procedural provisions intended to supplement the law on admissibility of electronic records.The Court clarified that primary electronic evidence is admissible under Section 62 of the Evidence Act and is not governed by Section 65B. Section 65B applies to secondary electronic evidence.Importantly, the Court held that the requirement of certificate under Section 65B(4) is not always mandatory. The requirement applies when electronic evidence is produced by a person who is in possession and control of the device from which the electronic record is generated and is capable of producing such certificate.Where electronic evidence is produced by a person who is not in possession of the device, Sections 63 and 65 of the Evidence Act can be invoked. In such cases, insisting on a certificate under Section 65B(4) would result in denial of justice.The Court clarified the legal position that the requirement of certificate under Section 65B(4) is procedural and can be relaxed by the Court in the interest of justice. Electronic evidence cannot be excluded merely on technical grounds if it is otherwise relevant and authentic.Case ReferredRam Singh and Others v. Col. Ram Singh, 1985 (Supp) SCC 611, Supreme Court of India.R. v. Maqsud Ali, (1965) 2 All ER 464, Court of Criminal Appeal (UK).R. v. Robson, (1972) 2 All ER 699, Court of Appeal (UK).Tukaram S. Dighole v. Manikrao Shivaji Kokate, (2010) 4 SCC 329, Supreme Court of India.Tomaso Bruno v. State of Uttar Pradesh, (2015) 7 SCC 178, Supreme Court of India.Mohd. Ajmal Amir Kasab v. State of Maharashtra, (2012) 9 SCC 1, Supreme Court of India.State (NCT of Delhi) v. Navjot Sandhu, (2005) 11 SCC 600, Supreme Court of India.Anvar P.V. v. P.K. Basheer, (2014) 10 SCC 473, Supreme Court of India.
BACKGROUND The petitioner approached the Supreme Court by way of Special Leave Petitions challenging the final judgment dated 22.11.2012 passed in a Writ Petition before the High Court of Jharkhand at Ranchi and the subsequent order dated 28.04.2014 passed in a Letters Patent Appeal arising therefrom. The petitions were filed with applications for condonation of delay in filing and refiling. CRUCIAL COURT OBSERVATIONS (Verbatim)The Supreme Court passed only the following operative order and made no detailed observations on merits:"Delay condoned. The special leave petitions are dismissed. However, the issue relating to maintainability of Letters Patent Appeal, is kept open." FINAL VERDICT The Supreme Court dismissed the Special Leave Petitions after condoning the delay, without going into the merits. The question of maintainability of the Letters Patent Appeal was expressly kept open. 👎
Murliwala Minerals Pvt. Ltd. vs. Union of India & Ors. 29-09-2014
BACKGROUND The petitioner approached the Supreme Court by way of Special Leave Petitions challenging the final judgment dated 22.11.2012 passed in a Writ Petition before the High Court of Jharkhand at Ranchi and the subsequent order dated 28.04.2014 passed in a Letters Patent Appeal arising therefrom. The petitions were filed with applications for condonation of delay in filing and refiling. CRUCIAL COURT OBSERVATIONS (Verbatim)The Supreme Court passed only the following operative order and made no detailed observations on merits:"Delay condoned. The special leave petitions are dismissed. However, the issue relating to maintainability of Letters Patent Appeal, is kept open." FINAL VERDICT The Supreme Court dismissed the Special Leave Petitions after condoning the delay, without going into the merits. The question of maintainability of the Letters Patent Appeal was expressly kept open. 👎
Facts :A search and seizure operation was conducted on the assessee, followed by block assessment determining undisclosed income. The Assessing Officer later sought to levy surcharge through rectification and revision proceedings. The assessee challenged the levy, contending that the proviso to Section 113 (inserted in 2002) could not apply to earlier block periods. The Tribunal and High Court held the proviso to be prospective, leading to appeal before the Supreme Court.Court Decision:The Supreme Court held that the proviso to Section 113 is prospective and not clarificatory. It ruled that prior to insertion of the proviso, levy of surcharge on block assessment was ambiguous and uncertain, particularly regarding the applicable Finance Act and rate. Since the proviso imposed an additional tax burden, it could not be applied retrospectively in absence of clear legislative intent. The Court also emphasized the principle that taxing statutes are presumed to be prospective unless expressly stated otherwise, and rejected the earlier view in Suresh N. Gupta treating the proviso as clarificatory.Cases Referred:Commissioner of Income Tax v. Suresh N. GuptaCommissioner of Income Tax v. Sanjiv BhataraGovinddas v. Income Tax OfficerController of Estate Duty v. M.A. MerchantCIT v. Scindia Steam Navigation Co. Ltd.Govindasaran Gangasaran v. Commissioner of Income TaxKeshavlal Jethalal Shah v. Mohanlal BhagwandasGovernment of India v. Indian Tobacco AssociationVijay v. State of MaharashtraPhillips v. EyreL’Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd.
Commissioner of Income Tax (Central)-I, New Delhi v. Vatika Township Pvt. Ltd. 15-09-2014
Facts :A search and seizure operation was conducted on the assessee, followed by block assessment determining undisclosed income. The Assessing Officer later sought to levy surcharge through rectification and revision proceedings. The assessee challenged the levy, contending that the proviso to Section 113 (inserted in 2002) could not apply to earlier block periods. The Tribunal and High Court held the proviso to be prospective, leading to appeal before the Supreme Court.Court Decision:The Supreme Court held that the proviso to Section 113 is prospective and not clarificatory. It ruled that prior to insertion of the proviso, levy of surcharge on block assessment was ambiguous and uncertain, particularly regarding the applicable Finance Act and rate. Since the proviso imposed an additional tax burden, it could not be applied retrospectively in absence of clear legislative intent. The Court also emphasized the principle that taxing statutes are presumed to be prospective unless expressly stated otherwise, and rejected the earlier view in Suresh N. Gupta treating the proviso as clarificatory.Cases Referred:Commissioner of Income Tax v. Suresh N. GuptaCommissioner of Income Tax v. Sanjiv BhataraGovinddas v. Income Tax OfficerController of Estate Duty v. M.A. MerchantCIT v. Scindia Steam Navigation Co. Ltd.Govindasaran Gangasaran v. Commissioner of Income TaxKeshavlal Jethalal Shah v. Mohanlal BhagwandasGovernment of India v. Indian Tobacco AssociationVijay v. State of MaharashtraPhillips v. EyreL’Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd.
