2016 SCC Vol. 3 April 07, 2016 Part 4

Sales Tax and VAT — Concession/Exemption/Incentive/Rebate — Incentive: Gujarat Capital Incentives to Premier/Prestigious Unit Scheme 1995-2000 was introduced with a view to accelerate the development of backward areas of Gujarat and to create employment opportunities. Three criteria were required to be satisfied for a unit to be identified as a “Prestigious Unit”: firstly, the unit being a “new industrial unit” as defined under Cl. 5(ii); secondly, a minimum project cost of at least Rs 100 crores or more; and thirdly, employment of at least 100 workers on permanent basis and adherence to employment policy of State Government. This Scheme has to be read as a whole: it is not permissible for a party to pick up one provision or one part of the Scheme and claim relief on that basis alone. [I.C. Textiles Ltd. v. State of Gujarat, (2016) 3 SCC 502]

Local Government — Property tax — Jurisdiction for collection of — Local limits of Gram Panchayats — Determination of: As the relevant notifications and maps giving details regarding the location of the properties in question show that the said properties were within the limits of their respective Gram Panchayats, appellants liable to pay property tax to Gram Panchayats concerned. [Central Warehousing Corpn. v. Gram Panchayat, (2016) 3 SCC 509]

Education and Universities — Wrongful termination/removal/dismissal: Irrespective of general principle that Government should pay back wages after reinstatement in an aided school, in this case, appellant Society, is liable to bear burden of back wages. This was because appellant while terminating services of R-4 acted without jurisdiction and without adhering to statutory provisions. If appellant would have adhered to statutory provisions, government authorities would have participated in termination process and things would have been different but as appellant acted without jurisdiction in terminating services of R-4, it is liable to pay back wages as per direction of Tribunal and as upheld by High Court. [Educational Society, Tumsar v. State of Maharashtra, (2016) 3 SCC 512]

Education and Universities — Examination — Judicial review/Interference by Court: Though appellant’s simultaneous appearance in two Class X exams of the same year allegedly disentitled him from intermediate examination, no regulations in this regard could be shown. Though Regulations concerned provided for cancellation of intermediate certificate on ground of candidate adopting unfair means, appellant neither adopted unfair means nor was a committee formed for looking into cases relating to unfair means as was required under regulation concerned, thus appeal allowed and impugned order of High Court upholding confiscation of intermediate certificate of appellant set aside. [Kuldeep Kumar Pathak v. State of U.P., (2016) 3 SCC 521]

Right to Information Act, 2005 — Ss. 8(1)(e) and 2(f) — Fiduciary relationship: RBI is a statutory body and a regulatory authority to oversee the functioning of the banks and the country’s banking sector. Further, RBI is supposed to uphold public interest and not the interest of individual banks and is not in any fiduciary relationship with any bank. Further, RBI has no legal duty to maximize the benefit of any public sector or private sector bank, and thus, there is no relationship of “trust” between them. The banks and financial institutions had an obligation to provide all the information to RBI and such information shared under an obligation/duty cannot be considered to come under the purview of being shared in fiduciary relationship. Further, S. 2(f) provides that inspection reports, documents, etc. fall under the purview of “information” which is obtained by the public authority (RBI) from a private body. Thus, even if it was considered that RBI and the banks and financial institutions shared a “fiduciary relationship”, S. 2(f) would still make the information shared between them to be accessible by the public. Hence, held, RBI could not have withheld the information sought on this ground. All impugned orders of CIC directing disclosure of the above sought information received from banks by RBI relating to financial health and probity in banking and financial system of the country, such as details of unpaid loans by industrialists, names of top defaulters, investigation and audit reports re banks, advisories issued to foreign branches of Indian banks, etc., affirmed. [RBI v. Jayantilal N. Mistry, (2016) 3 SCC 525]

Constitution of India — Art. 226 — Interference in contractual matters: Fact that tender/bid process had been finalised and contract awarded to another, while writ petitioner was in process of challenging rejection of its bid vide the writ petition, is not a ground on which writ petition can be dismissed. [Roots Industries India Ltd. v. Airports Authority of India, (2016) 3 SCC 569]

Constitution of India — Arts. 21 and 32 — Acid attack victims: Compensation to acid attack victims, enhanced on the ground of severity of victim’s injury, expenditure with regard to grafting and reconstruction surgery, physical and mental pain, etc. Further directions issued that compensation to be awarded not only in terms of physical injury, but note of victim’s inability to lead a full life and to enjoy those amenities which are being robbed of her as a result of acid attack, should also be taken. [Parivartan Kendra v. Union of India, (2016) 3 SCC 571]

Constitution of India — Arts. 14, 19(1)(g), 21 and 38 — Allotment of State largesse to private entrepreneurs: State’s approach should be reasonable, fair, non-arbitrary and non-discriminatory. It should be to protect right to means of livelihood and freedom of occupation of small business units which completely depend upon earnings from their petty business. It should be social justice oriented, being conscious about rising unemployment due to non-governance and non-implementation of constitutional philosophy of egalitarian society which provides opportunity to everybody to live a life of dignity. Government policy should be interpreted taking into consideration deprivation of right to livelihood of weaker section of society. Non-renewal of existing licences of small business units for providing food and catering services and for running catering/fruit/fruit juice stalls at railway stations under new Catering Policy and instead compelling them to participate in open bidding, violative of Arts. 14, 19(1)(g), 21 and 38. However, it is clarified that only those licensees would be eligible for renewal of their licences who can declare on affidavit that they do not have licence of more than one shop or kiosk in their name or benami licence at railway stations, with periodical reasonable increase of licence fee. [South Central Railways v. S.C.R. Caterers, Dry Fruits, Fruit Juice Stalls Welfare Assn., (2016) 3 SCC 582]

Uttarakhand Agricultural Produce Marketing (Development and Regulation) Act, 2011 — S. 27(c)(iii) (as amended) — Validity: Levy of market fee and development cess on any agricultural produce which arrives in any market area for (a) sale, and (b) storage, processing, manufacturing, transaction or other commercial purposes, is  invalid and beyond legislative competence since it seeks to levy market fee and development cess even on agricultural produce which is brought into market not for purpose of sale, but for purpose of manufacture or further processing. [Gujarat Ambuja Exports Ltd. v. State of Uttarakhand, (2016) 3 SCC 601]

Arbitration and Conciliation Act, 1996 — Ss. 15, 11(5) and 7 r/w S. 89 CPC — Substitute arbitrator: For the purpose of S. 15(2) of 1996 Act, agreement between parties shall be treated as “the rules” that govern the field and appointing authority shall appoint substitute arbitrator according to terms of arbitration agreement. Thus, when mandate of arbitrator terminates, appointment of substitute arbitrator shall be made in accordance with arbitration agreement unless agreement either expressly or by necessary implication excludes substitution of an arbitrator, whether named or otherwise. [Shailesh Dhairyawan v. Mohan Balkrishna Lulla, (2016) 3 SCC 619]

Central Excise Act, 1944 — Ss. 3-A, 37(3) and 37(4) — Compounded levy scheme under S. 3-A: Penalty can only be levied by authority of statutory law. Further, S. 37 does not expressly authorise levy of penalty higher than Rs 5000. Thus, imposition of a mandatory penalty equal to the amount of duty not being a statutory levy makes Rr. 96-ZO, 96-ZP and 96-ZQ without authority of law. Further, interest can be levied and charged on delayed payment of tax only if statute that levies and charges the tax makes a substantive provision for imposition of interest. Since parent provision (S. 3-A) that levies and charges the tax does not provide for levying penalty, subsidiary provisions (Rr. 96-ZO, 96-ZP and 96-ZQ) providing for imposition of mandatory penalty equivalent to amount of duty are ultra vires parent provision. Hence, said Rules providing for penalty and interest are invalid since without authority of law. [Shree Bhagwati Steel Rolling Mills v. CCE, (2016) 3 SCC 643]

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