Facts :The petitioners, registered dealers under the DVAT Act, claimed Input Tax Credit on purchases supported by valid tax invoices from registered selling dealers. The tax authorities denied ITC on the ground that the selling dealers had not deposited the tax with the Government or had not properly disclosed the transactions. The denial was based on Section 9(2)(g) of the DVAT Act. Petitioners contended that they had complied with all statutory requirements and could not control the conduct of selling dealers.  Court Decision:The High Court held Section 9(2)(g) unconstitutional to the extent it denies ITC to bona fide purchasing dealers. The Court held that the provision fails to distinguish between genuine purchasers and those involved in fraud or collusion, thereby violating Article 14 of the Constitution. It was held that a purchasing dealer who has taken all reasonable steps, such as verifying registration and obtaining valid tax invoices, cannot be denied ITC due to default of the selling dealer. However, ITC can be denied where fraud, collusion, or lack of genuineness is established. Cases Referred by Court:•    K.T. Moopil Nair v. State of Kerala •    State of Kerala v. Haji and Haji •    Shri Ram Krishna Dalmia v. Justice S.R. Tendolkar •    Budhan Choudhry v. State of Bihar •    Gheru Lal Bal Chand v. State of Haryana •    Shanti Kiran India Pvt. Ltd. v. Commissioner, Trade and Tax Department •    Rajbala v. State of Haryana •    Binoy Viswam v. Union of India •    Shayara Bano v. Union of India •    Mahalaxmi Cotton Ginning Pressing & Oil Industries v. State of Maharashtra •    Jayam & Co. v. Assistant Commissioner   

Facts :Petitioner deposited ₹34,67,438 as pre-deposit for filing appeal against stamp duty demand.The original demand order was set aside and matter remanded; ultimately no demand survived.Despite this, refund was delayed for several years and only principal amount was returned without interest.Petitioner filed writ seeking interest on the delayed refund amount.Court Decision:Retention of petitioner’s money after setting aside demand was unauthorised.Even in absence of statutory provision, interest is payable based on principles of restitution.State cannot retain money without compensating the party for deprivation of its use.Non-payment of interest while charging interest from assessee is discriminatory.Directions:Petitioner entitled to simple interest @ 8% per annum.Interest payable from date of deposit (15.12.2005) till date of refund (29.05.2014).Respondents directed to pay interest within stipulated time.General mandamus issued to State to pay interest on refunds in similar cases.Cases Referred by Court:Union of India v. Tata Chemicals Ltd.Hello Minerals Water (P) Ltd. v. Union of IndiaUnion of India v. Oriental EnterprisesSecretary, Irrigation Dept. v. G.C. RoySham Lal Narula v. CITSouth Eastern Coalfields Ltd. v. State of M.P.Sandvik Asia Ltd. v. CITGhaziabad Development Authority v. Balbir SinghONGC Ltd. v. Commissioner of CustomsHari Chand v. State of U.P.

BackgroundThis was a non-tax, criminal matter arising from a matrimonial dispute. The case reached the Court against the backdrop of rampant misuse of Section 498-A IPC (a cognizable, non-bailable offence carrying up to three years' imprisonment), which had acquired "a dubious place of pride" as a weapon to harass husbands and their relatives. NCRB data cited showed nearly 1.98 lakh persons arrested under the provision in 2012 — a quarter of them women (mothers and sisters of husbands) — with a 93.6% charge-sheeting rate but only 15% conviction, the lowest across all heads. The Court took up the matter to curb the "arrest first, proceed with the rest" attitude of the police.FactsThe appellant, husband of respondent no. 2 (married on 01.07.2007), apprehended arrest in a case under Section 498-A IPC and Section 4 of the Dowry Prohibition Act, 1961. The wife alleged that a demand for Rs. 8 lakhs, a Maruti car, an air-conditioner, a television set and other items was made by her in-laws; that when informed, the appellant supported his mother and threatened to marry another woman; and that she was driven out of the matrimonial home for non-fulfilment of the dowry demand. The appellant denied the allegations and sought anticipatory bail, which was rejected first by the Sessions Judge and then by the High Court, bringing him to the Supreme Court by way of Special Leave Petition.Court's Observations (verbatim)"The attitude to arrest first and then proceed with the rest is despicable. It has become a handy tool to the police officers who lack sensitivity or act with oblique motive.""No arrest should be made only because the offence is non-bailable and cognizable and therefore, lawful for the police officers to do so. The existence of the power to arrest is one thing, the justification for the exercise of it is quite another… No arrest can be made in a routine manner on a mere allegation of commission of an offence made against a person.""In pith and core, the police office before arrest must put a question to himself, why arrest? Is it really required? What purpose it will serve? What object it will achieve?""Before a Magistrate authorises detention under Section 167, Cr.PC, he has to be first satisfied that the arrest made is legal and in accordance with law and all the constitutional rights of the person arrested is satisfied. If the arrest effected by the police officer does not satisfy the requirements of Section 41 of the Code, Magistrate is duty bound not to authorise his further detention and release the accused.""The Magistrate before authorising detention will record its own satisfaction, may be in brief but the said satisfaction must reflect from its order. It shall never be based upon the ipse dixit of the police officer…"Directions Issued (binding safeguards)The Court directed, inter alia, that police shall not automatically arrest in Section 498-A cases but satisfy themselves of necessity under Section 41 Cr.PC parameters; officers be given a check-list under Section 41(1)(b)(ii) and forward it with reasons while producing the accused; the Magistrate authorise detention only after recording satisfaction on that report; notice under Section 41A be served within two weeks; and that failure to comply would invite departmental action and contempt proceedings. These directions were extended to all offences punishable with imprisonment up to seven years, not just Section 498-A.Final VerdictThe appeal was allowed. The Court made absolute its earlier order dated 31.10.2013 granting the appellant provisional bail, subject to the directions framed to prevent unnecessary arrests and mechanical authorisation of detention. Cases / Authorities Referred by the CourtThe judgment did not turn on prior case-law citations; the Court relied on statutory provisions and official reports, namely:Section 498-A, Indian Penal Code, 1860 & Section 4, Dowry Prohibition Act, 1961Sections 41, 41A, 57 & 167, Code of Criminal Procedure, 1973; Article 22(2), Constitution of India177th Report of the Law Commission of India (2001); 152nd & 154th Reports (1994)"Crime in India 2012 Statistics," National Crime Records Bureau, Ministry of Home Affairs

Facts :The appellant, a registered dealer, purchased goods from registered selling dealers against valid tax invoices and claimed input tax credit. The VAT authorities disallowed ITC on the ground that selling dealers had deposited disproportionately low tax and their registrations were later cancelled. The assessment orders, objection orders, and Tribunal upheld denial of ITC and imposed tax, interest, and penalty. The appellant challenged these findings before the High Court. Court Decision:The High Court held that denial of ITC was not justified in the absence of any statutory provision (during the relevant period) requiring the purchasing dealer to ensure that the selling dealer deposited tax. It held that Section 9(2) did not contain such a condition prior to insertion of clause (g), and the Tribunal’s interpretation was erroneous. The Court allowed the appeals and directed grant of input tax credit to the appellant after verification. Cases Referred by Court:•    State of Maharashtra v. Suresh Trading Company •    Althaf Shoes Pvt. Ltd. v. Assistant Commissioner (CT) •    V.M. Salgaocar & Bros. Pvt. Ltd. v. Commissioner of Income Tax •    Shyam Sunder v. Ram Kumar •    Bihar State Council of Ayurvedic and Unani Medicine v. State of Bihar •    R.S. Joshi v. Ajit Mills •    Shree Sajjan Mills Ltd. v. Commissioner of Income Tax •    George Oakes (Private) Ltd. v. State of Madras •    Commissioner of Central Excise v. Hari Chand Shri Gopal •    State of Jharkhand v. Govind Singh •    J.P. Bansal v. State of Rajasthan  

Court Decision:The Supreme Court dismissed the appeals filed by the Revenue and upheld the orders of the Commissioner (Appeals) and the Tribunal classifying the goods as jute carpets.The Court held that:The carpets manufactured by the respondent contained more than 50% jute by weight and had no separate base fabric, as established by reports of the Indian Jute Industries Research Association and the Department’s Chemical Examiner.Since the goods fell under Chapter 57 and consisted of more than one textile material, classification had to be determined in accordance with Section Note 2(A) and Section Note 14(A) of Section XI of the Central Excise Tariff Act, 1985, which mandate classification based on the textile material predominating by weight. As jute predominated over each other single textile material, the carpets were classifiable as jute carpets.Chapter Note 1 to Chapter 57 only defines “carpets and other textile floor coverings” for the purpose of that Chapter and cannot override the predominance test for classification.The Revenue’s attempt to classify the goods under the residuary sub-heading was rejected. The Court reiterated that when goods reasonably fall under a specific heading, they cannot be classified under a residuary entry.The argument based on the “essential character” or “surface test” was rejected, as predominance by weight was the governing principle under the statutory notes.The plea based on Rule 3 of the Rules for Interpretation of the Schedule was rejected, as classification was clear from the Section and Chapter Notes, and Rule 3 applies only when classification cannot be determined otherwise. Further, a case not made out in the show cause notice cannot be argued subsequently.The Court found no perversity in the concurrent findings of the Commissioner (Appeals) and the Tribunal and affirmed the classification as jute carpets.Cases Referred by Court:HPL Chemicals Ltd. vs Commissioner of Central Excise, Chandigarh (2006) 5 SCC 208Dunlop India Ltd. vs Union of India (1976) 2 SCC 241Bharat Forge and Press Industries (P) Ltd. vs Collector of Central Excise (1990) 1 SCC 532Collector of Central Excise, Hyderabad vs Fenoplast (P) Ltd. (1994) 72 ELT 513 (SC)M/s Indo International Industries vs Commissioner of Sales Tax, U.P. (1981) 2 SCC 528Commissioner of Central Excise, Nagpur vs Simplex Mills Co. Ltd. (2005) 3 SCC 51Commissioner of Customs, Mumbai vs Toyo Engineering India Ltd. (2006) 7 SCC 592Commissioner of Central Excise, Nagpur vs Ballarpur Industries Ltd. (2007) 8 SCC 89Oswal Agro Mills Ltd. vs Collector of Central Excise 1993 Supp (3) SCC 716Novopan India Ltd. vs Collector of Central Excise 1994 Supp (3) SCC 606Hindustan Poles Corporation vs Commissioner of Central Excise (2006) 4 SCC 85Kemrock Industries & Exports Ltd. vs Commissioner of Central Excise (2007) 9 SCC 52