BackgroundThe lead petitioner is a company engaged in import and sale of Ceramic Pigment Ink. It placed an order for a consignment from its principal in Spain, imported through Ahmedabad Airport. The company filed a bill of entry for home consumption and paid applicable customs duty as well as IGST before commencement of movement of goods. While the goods were being transported from Ahmedabad Airport to the company's warehouse in Vadodara, the truck was intercepted on the Ahmedabad-Vadodara Expressway by the GST Authorities. The transporter duly produced all documents including the bill of entry evidencing prior payment of IGST. The vehicle was detained solely on the ground that the e-way bill had not been generated — the clearing and forwarding agent had urgently dispatched the consignment given its perishable nature without waiting for the e-way bill. On learning of the detention, the company promptly generated the e-way bill. However, the authorities refused to release the goods and raised a demand for release which far exceeded the value of the goods themselves. The authorities proceeded to issue a Show Cause Notice directly under Section 130 of the CGST Act demanding payment of tax, 100% penalty and redemption fine equal to the value of goods in lieu of confiscation — without first following the procedure under Section 129 of the Act. Five writ applications raising identical issues were clubbed and disposed of by a common judgment.Relevant FactsIGST had been paid in full at the time of import — before movement commenced. Bill of entry for home consumption accompanying the goods evidenced prior payment of tax. The only lapse was non-generation of e-way bill at the time of transport — attributable to the C&F agent acting in urgency given the perishable nature of the goods and their limited shelf-life. Despite tax having already been paid, the authorities levied 100% penalty under Section 129 AND simultaneously invoked Section 130 for confiscation with redemption fine equal to the full value of goods. The Show Cause Notice under Section 130 was issued without first completing Section 129 proceedings — i.e., without issuing the Section 129(3) notice, granting hearing, and allowing the 14-day compliance window. The petitioners' central argument was that Section 130 is entirely dependent on non-compliance with Section 129(6) and cannot be independently invoked. The Revenue's case was that both sections carry non-obstante clauses making them independent of each other.Court Observations (Verbatim — Final Conclusions)"(i) Section 129 of the Act talks about detention, seizure and release of goods and conveyances in transit. On the other hand, Section 130 talks about confiscation of goods or conveyance and levy of tax, penalty and fine thereof. Although, both the sections start with a non-obstante clause, yet, the harmonious reading of the two sections, keeping in mind the object and purpose behind the enactment thereof, would indicate that they are independent of each other. Section 130 of the Act, which provides for confiscation of the goods or conveyance is not, in any manner, dependent or subject to Section 129 of the Act. Both the sections are mutually exclusive."— Para 182(i) — Core ratio: Sections 129 & 130 are independent"(ii) The phrase 'with an intent to evade the payment of tax' in Section 130 of the Act assumes importance. When the law requires an intention to evade payment of tax, then it is not mere failure to pay tax. It must be something more. The word 'evade' in the context means defeating the provisions of law of paying tax. It is made more stringent by use of the word 'intent'. The assessee must deliberately avoid the payment of tax which is payable in accordance with law. However, the element of mens rea cannot be read into Section 130 of the Act."— Para 182(ii) — On "intent to evade" in Section 130"(iii) For the purpose of issuing a notice of confiscation under Section 130 of the Act at the threshold, i.e., at the stage of detention and seizure of the goods and conveyance, the case has to be of such a nature that on the face of the entire transaction, the authority concerned should be convinced that the contravention was with a definite intent to evade payment of tax. The action, in such circumstances, should be in good faith and not be a mere pretence. In other words, the authorities need to make out a very strong case. Mere suspicion may not be sufficient to invoke Section 130 of the Act straightway."— Para 182(iii) — Strong case needed for invoking Section 130 at threshold"(iv) If the authorities are of the view that the case is one of invoking Section 130 of the Act at the very threshold, then they need to record their reasons for such belief in writing, and such reasons recorded in writing should, thereafter, be looked into by the superior authority so that the superior authority can take an appropriate decision whether the case is one of straightway invoking Section 130 of the Act."— Para 182(iv) — Mandatory written reasons & superior authority approval"(vi) Section 130 of the Act is not dependent on clause (6) of Section 129 of the Act."— Para 182(vi) — Rejecting assessee's sequential argument"(xiv) The goods are not liable to be detained on the ground that the tax paid on the product was less. In such circumstances, the Inspecting Authority is expected to alert the Assessing Authority to initiate appropriate proceedings 'for assessment of any alleged sale at which the dealer will have his opportunities to put forward his pleas on law and on fact. The process of detention of the goods cannot be resorted to when the dispute is bona fide, especially concerning the exigibility of tax and, more particularly, the rate of that tax.'"— Para 182(xiv) — Inspecting authority has no jurisdiction on valuation"(xvi) The extraordinary powers under Article 226 of the Constitution, directing for release of the vehicles or goods, during the pendency of the confiscation, can only be sparingly exercised under extraordinary situations and circumstances when injustice occurs because of non-fulfillment of the conditions for confiscation."— Para 182(xvi) — Restricted scope of writ interferenceSummary of Mixed OutcomesAgainst AssesseeSections 129 & 130 held independent — Section 130 can be invoked without first completing Section 129. Section 130 is NOT dependent on Section 129(6) non-compliance. Mens rea not required for Section 130.For AssesseeStrong evidence of "definite intent to evade" mandatory at threshold. Written reasons + superior authority approval mandated. Detention for valuation disputes not permissible. Goods directed to be released pending confiscation proceedings.Final VerdictThe Court laid down 16 general principles on the interpretation of Sections 129 and 130 of the CGST Act and directed all matters to be listed before the tax bench for deciding individual confiscation challenges on merits. The primary argument of the assessees — that Section 130 cannot be independently invoked and is subject to Section 129(6) — was rejected. However, the Court ordered interim release of goods and conveyances in all petitions pending confiscation proceedings, subject to final outcome. No final adjudication on the merits of individual petitions was undertaken.
Synergy Fertichem Pvt. Ltd. & Ors. v. State of Gujarat & Ors. 23-12-2019
BackgroundThe lead petitioner is a company engaged in import and sale of Ceramic Pigment Ink. It placed an order for a consignment from its principal in Spain, imported through Ahmedabad Airport. The company filed a bill of entry for home consumption and paid applicable customs duty as well as IGST before commencement of movement of goods. While the goods were being transported from Ahmedabad Airport to the company's warehouse in Vadodara, the truck was intercepted on the Ahmedabad-Vadodara Expressway by the GST Authorities. The transporter duly produced all documents including the bill of entry evidencing prior payment of IGST. The vehicle was detained solely on the ground that the e-way bill had not been generated — the clearing and forwarding agent had urgently dispatched the consignment given its perishable nature without waiting for the e-way bill. On learning of the detention, the company promptly generated the e-way bill. However, the authorities refused to release the goods and raised a demand for release which far exceeded the value of the goods themselves. The authorities proceeded to issue a Show Cause Notice directly under Section 130 of the CGST Act demanding payment of tax, 100% penalty and redemption fine equal to the value of goods in lieu of confiscation — without first following the procedure under Section 129 of the Act. Five writ applications raising identical issues were clubbed and disposed of by a common judgment.Relevant FactsIGST had been paid in full at the time of import — before movement commenced. Bill of entry for home consumption accompanying the goods evidenced prior payment of tax. The only lapse was non-generation of e-way bill at the time of transport — attributable to the C&F agent acting in urgency given the perishable nature of the goods and their limited shelf-life. Despite tax having already been paid, the authorities levied 100% penalty under Section 129 AND simultaneously invoked Section 130 for confiscation with redemption fine equal to the full value of goods. The Show Cause Notice under Section 130 was issued without first completing Section 129 proceedings — i.e., without issuing the Section 129(3) notice, granting hearing, and allowing the 14-day compliance window. The petitioners' central argument was that Section 130 is entirely dependent on non-compliance with Section 129(6) and cannot be independently invoked. The Revenue's case was that both sections carry non-obstante clauses making them independent of each other.Court Observations (Verbatim — Final Conclusions)"(i) Section 129 of the Act talks about detention, seizure and release of goods and conveyances in transit. On the other hand, Section 130 talks about confiscation of goods or conveyance and levy of tax, penalty and fine thereof. Although, both the sections start with a non-obstante clause, yet, the harmonious reading of the two sections, keeping in mind the object and purpose behind the enactment thereof, would indicate that they are independent of each other. Section 130 of the Act, which provides for confiscation of the goods or conveyance is not, in any manner, dependent or subject to Section 129 of the Act. Both the sections are mutually exclusive."— Para 182(i) — Core ratio: Sections 129 & 130 are independent"(ii) The phrase 'with an intent to evade the payment of tax' in Section 130 of the Act assumes importance. When the law requires an intention to evade payment of tax, then it is not mere failure to pay tax. It must be something more. The word 'evade' in the context means defeating the provisions of law of paying tax. It is made more stringent by use of the word 'intent'. The assessee must deliberately avoid the payment of tax which is payable in accordance with law. However, the element of mens rea cannot be read into Section 130 of the Act."— Para 182(ii) — On "intent to evade" in Section 130"(iii) For the purpose of issuing a notice of confiscation under Section 130 of the Act at the threshold, i.e., at the stage of detention and seizure of the goods and conveyance, the case has to be of such a nature that on the face of the entire transaction, the authority concerned should be convinced that the contravention was with a definite intent to evade payment of tax. The action, in such circumstances, should be in good faith and not be a mere pretence. In other words, the authorities need to make out a very strong case. Mere suspicion may not be sufficient to invoke Section 130 of the Act straightway."— Para 182(iii) — Strong case needed for invoking Section 130 at threshold"(iv) If the authorities are of the view that the case is one of invoking Section 130 of the Act at the very threshold, then they need to record their reasons for such belief in writing, and such reasons recorded in writing should, thereafter, be looked into by the superior authority so that the superior authority can take an appropriate decision whether the case is one of straightway invoking Section 130 of the Act."— Para 182(iv) — Mandatory written reasons & superior authority approval"(vi) Section 130 of the Act is not dependent on clause (6) of Section 129 of the Act."— Para 182(vi) — Rejecting assessee's sequential argument"(xiv) The goods are not liable to be detained on the ground that the tax paid on the product was less. In such circumstances, the Inspecting Authority is expected to alert the Assessing Authority to initiate appropriate proceedings 'for assessment of any alleged sale at which the dealer will have his opportunities to put forward his pleas on law and on fact. The process of detention of the goods cannot be resorted to when the dispute is bona fide, especially concerning the exigibility of tax and, more particularly, the rate of that tax.'"— Para 182(xiv) — Inspecting authority has no jurisdiction on valuation"(xvi) The extraordinary powers under Article 226 of the Constitution, directing for release of the vehicles or goods, during the pendency of the confiscation, can only be sparingly exercised under extraordinary situations and circumstances when injustice occurs because of non-fulfillment of the conditions for confiscation."— Para 182(xvi) — Restricted scope of writ interferenceSummary of Mixed OutcomesAgainst AssesseeSections 129 & 130 held independent — Section 130 can be invoked without first completing Section 129. Section 130 is NOT dependent on Section 129(6) non-compliance. Mens rea not required for Section 130.For AssesseeStrong evidence of "definite intent to evade" mandatory at threshold. Written reasons + superior authority approval mandated. Detention for valuation disputes not permissible. Goods directed to be released pending confiscation proceedings.Final VerdictThe Court laid down 16 general principles on the interpretation of Sections 129 and 130 of the CGST Act and directed all matters to be listed before the tax bench for deciding individual confiscation challenges on merits. The primary argument of the assessees — that Section 130 cannot be independently invoked and is subject to Section 129(6) — was rejected. However, the Court ordered interim release of goods and conveyances in all petitions pending confiscation proceedings, subject to final outcome. No final adjudication on the merits of individual petitions was undertaken.
Facts :The petitioner’s goods were detained during transit through a detention order (Form GST MOV-06) on the ground that the invoice value was lower than the MRP and HSN code was wrongly mentioned. The petitioner challenged the detention contending that these grounds do not justify detention under Sections 129 or 130 of the GST Act. It was also contended that there was no discrepancy in tax rate or supporting documents accompanying the goods. The issue arose from detention at a parcel godown during movement of goods.Court Decision:The Court held that undervaluation with reference to MRP is not a valid ground for detention of goods under the GST Act. There is no statutory provision prohibiting sale of goods below MRP, and such comparison cannot justify detention. The Court further held that incorrect HSN classification, without impact on tax rate, does not warrant detention. The detention order was quashed and authorities were directed to release the goods forthwith. Directions were also issued to the Commissioner to ensure such unwarranted detentions are not repeated.
Alfa Group vs The Assistant State Tax Officer & Others 18-11-2019
Facts :The petitioner’s goods were detained during transit through a detention order (Form GST MOV-06) on the ground that the invoice value was lower than the MRP and HSN code was wrongly mentioned. The petitioner challenged the detention contending that these grounds do not justify detention under Sections 129 or 130 of the GST Act. It was also contended that there was no discrepancy in tax rate or supporting documents accompanying the goods. The issue arose from detention at a parcel godown during movement of goods.Court Decision:The Court held that undervaluation with reference to MRP is not a valid ground for detention of goods under the GST Act. There is no statutory provision prohibiting sale of goods below MRP, and such comparison cannot justify detention. The Court further held that incorrect HSN classification, without impact on tax rate, does not warrant detention. The detention order was quashed and authorities were directed to release the goods forthwith. Directions were also issued to the Commissioner to ensure such unwarranted detentions are not repeated.
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
BackgroundCIDCO (City Industrial and Development Corporation of Maharashtra Ltd.), incorporated on 17th March 1970, is designated as the New Town Development Authority under Section 113(3A) of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act). In furtherance of its planning mandate, CIDCO allots residential-cum-commercial and hotel plots on 60-year leases through a tender process. Successful bidders pay a one-time lease premium (lump sum) plus annual lease rent. In April 2017, upon issuance of allotment letters, CIDCO demanded GST @ 18% on the total one-time lease premium via Demand Draft. Petitioners — an association of builders and a partnership firm — challenged this levy before the Bombay High Court after the GST Commissionerate failed to respond to their grievance correspondence. Court Observations (Verbatim)"A perusal of sections 7, 8, 9, 10 and 11 falling in this Chapter leaves us in no manner of doubt that the expression 'supply' includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.""Once this law, in terms of the substantive provisions and the Schedule, treats the activity as supply of goods or supply of services, particularly in relation to land and building and includes a lease, then, the consideration therefor as a premium/one-time premium is a measure on which the tax is levied, assessed and recovered. We cannot then probe into the legislation any further.""It is entirely for the legislature, therefore, to exercise the powers conferred by sub-section (2) of section 7 of the GST Act and issue the requisite notification. Absent that notification, merely going by the status of the CIDCO, we cannot hold that the lease premium would not attract or invite the liability to pay tax in terms of the GST Act.""With respect, it cannot be said that the activities performed by sovereign or public authorities under the provisions of law, which are in the nature of statutory obligations are excluded from the purview of the present enactment.""Pertinently, the dividing line between governmental and non-governmental, sovereign and regal functions and otherwise is not very thin and post globalisation, liberalisation and privatisation."Final VerdictThe demand for GST on the one-time lease premium is held to be in accordance with law. The writ petition is dismissed and Rule is discharged. No order as to costs.
Builders Association of Navi Mumbai v. Union of India 28-03-2018
BackgroundCIDCO (City Industrial and Development Corporation of Maharashtra Ltd.), incorporated on 17th March 1970, is designated as the New Town Development Authority under Section 113(3A) of the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act). In furtherance of its planning mandate, CIDCO allots residential-cum-commercial and hotel plots on 60-year leases through a tender process. Successful bidders pay a one-time lease premium (lump sum) plus annual lease rent. In April 2017, upon issuance of allotment letters, CIDCO demanded GST @ 18% on the total one-time lease premium via Demand Draft. Petitioners — an association of builders and a partnership firm — challenged this levy before the Bombay High Court after the GST Commissionerate failed to respond to their grievance correspondence. Court Observations (Verbatim)"A perusal of sections 7, 8, 9, 10 and 11 falling in this Chapter leaves us in no manner of doubt that the expression 'supply' includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business.""Once this law, in terms of the substantive provisions and the Schedule, treats the activity as supply of goods or supply of services, particularly in relation to land and building and includes a lease, then, the consideration therefor as a premium/one-time premium is a measure on which the tax is levied, assessed and recovered. We cannot then probe into the legislation any further.""It is entirely for the legislature, therefore, to exercise the powers conferred by sub-section (2) of section 7 of the GST Act and issue the requisite notification. Absent that notification, merely going by the status of the CIDCO, we cannot hold that the lease premium would not attract or invite the liability to pay tax in terms of the GST Act.""With respect, it cannot be said that the activities performed by sovereign or public authorities under the provisions of law, which are in the nature of statutory obligations are excluded from the purview of the present enactment.""Pertinently, the dividing line between governmental and non-governmental, sovereign and regal functions and otherwise is not very thin and post globalisation, liberalisation and privatisation."Final VerdictThe demand for GST on the one-time lease premium is held to be in accordance with law. The writ petition is dismissed and Rule is discharged. No order as to costs.
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.
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
On Quest Merchandising India Pvt. Ltd. v. Government of NCT of Delhi & Ors. 16-10-2017
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
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 :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.
Ansal Housing and Construction Ltd. v. State of U.P. & Ors. 19-09-2014
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.
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.
