Experts CornerTarun Jain (Tax Practitioner)

A technical yet interesting controversy has arisen in the context of indirect tax laws, particularly customs laws. The issue relates to availability of refund despite failure to challenge assessment proceedings. This issue has witnessed multiple rounds of litigation in the context of customs law and is an interesting one.

 


Background: Understanding the Assessment Scheme


It is expedient to examine the scheme of the assessment in order to appreciate the issue in greater detail. Most of the indirect tax laws were earlier based on the “assessment” regime where a tax officer would pass an order of assessment determining the rights and liabilities of the taxpayers concerned. Subsequently this assessment scheme was replaced by “self-assessment” scheme. Under this scheme, the obligation to comply with the law concerned rests upon the taxpayers who must ensure compliance with the provisions tax law, including filing of tax return along with the attendant consequences. This scheme where the taxpayer is obliged to assess and determine the correct tax liability is commonly understood as the self-assessment scheme. In such scenario the role of the tax officer is limited to verifying the self-assessment of the taxpayer and initiate recovery proceeding, if required, in order to recovery short paid tax, besides ensuring that the other provisions of the tax law are complied with by the taxpayer.

 


The First Round of Litigation in Customs Law


The question as to the manner in which a taxpayer could apply for refund arose for the first time in the context of the assessment regime under the customs law. The Supreme Court in CCE v. Flock (India) (P) Ltd.[1] opined that it is obligatory on the part of the taxpayers to challenge the assessment orders, without which a refund is not maintainable. In this decision it was observed that “there is little scope for doubt that in a case where an adjudicating authority has passed an order which is appealable under the statute and the party aggrieved did not choose to exercise the statutory right of filing an appeal, it is not open to the party to question the correctness of the order of the adjudicating authority subsequently by filing a claim for refund on the ground that the adjudicating authority had committed an error in passing his order”.

Subsequent, in Priya Blue Industries Ltd. v. Commr. of Customs[2] the Supreme Court refused to change its opinion and reiterated that the assessment order being in appealable order and refund being a consequence of the assessment, in the absence of a challenge to an assessment order a refund claim could not be entertained much less considered on merits. Thus the issue rested conclusively in the context of the assessment regime under the customs law.

 


Change to Self-Assessment Scheme under Customs Law


In 2011 the Customs Act, 1962 was substantially amended. One of the major changes was the switchover from the assessment scheme to the self-assessment mechanism. Given that the self-assessment regime implied absence of an order of assessment, a view emerged that the earlier decisions of the Supreme Court were not applicable in the case of self-assessment as in such cases the assessment having been made by the taxpayer himself, it was not possible for the taxpayer to challenge the assessment order. Inter alia (a) on such legal interpretation; (b) grounds of practical exigencies; and (c) citing lack of a provision providing for appeal by the taxpayer against his own self-assessment, it was being contended on such account that there was no requirement to challenge the assessment order in order to claim refund. This view came to be rejected by the tax officers who refused to grant refund citing the self-assessment order but the view came to be vindicated by the Delhi High Court. In its decision in Micromax Informatics Ltd. v. Union of India[3], the Delhi High Court examined the new provisions of the customs law and the self-assessment scheme therein to opine that the process of self-assessment there was “no assessment order as such passed by the customs authorities” and thus there was no necessity to file an appeal any appeal in order to claim refund. This decision of the Delhi High Court was agreed by the Calcutta High Court[4] and Madras High Court[5] amongst others.

 

The issue subsequently thereafter came up for consideration of the Supreme Court. Unable to subscribe to the High Court reasoning, the Supreme Court in ITC case[6] reversed this view to the detriment of the taxpayers. In the opinion of the Supreme Court, notwithstanding the change in the customs law framework, there was no change in the legal position emerging from its earlier decisions. The Supreme Court explained that self-assessment also resulted in an “order” under the customs law which could not be wished away and its effect could be invalidated only by way of appropriate proceedings under the customs law. In conclusion, the Supreme Court noted the following:

 

  1. 47. When we consider the overall effect of the provisions prior to amendment and post amendment under the Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act.

 

A critical observation of the Supreme Court in ITC case[7] was in relation to the refund proceedings. It inter alia observed that refund “is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise”.


The Third Round: Amendment/Rectification as an Alternative to Appeal


One would have assumed that with the decision in ITC case[8] the issue would no longer have been res integra and the controversy would have subsided. However, that the ingenuity of the lawyers knows no bounds is best reflected in the scenario that followed. Faced with the law emanating from the ITC case[9], an innovative approach was adopted in subsequent matters where the taxpayer had claimed refund without challenging the self-assessment order.

 

It began to be canvassed that the Supreme Court in ITC case[10] itself had opened the door for another remedy to the taxpayer when it observed that the refund provision “cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made”. Stressing upon this observation, the taxpayer contended that a refund proceeding could be supplemented with a request for amendment, which once allowed would imply that the self-assessment order did not stand in the way of claim refund. This assertion came to be accepted by the Bombay High Court in Dimension Data India (P) Ltd. v. Commr. of Customs.[11]

 

In this decision, the Bombay High Court concluded that it was obligatory upon the tax officers to address a formal request for amendment of documents when accompanied by a refund claim, in view of the power of amendment (Section 149) and the power of rectification (Section 154) being statutorily vested on the tax officers. Declaring the legal position, the High Court inter alia observed as under:

 

“… in the judgment itself Supreme Court has clarified that in case any person is aggrieved by an order which would include an order of self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Customs Act before he makes a claim for refund. This is because as long as the order is not modified the order remains on record holding the field and on that basis no refund can be claimed but the moot point is Supreme Court has not confined modification of the order through the mechanism of Section 128 only. Supreme Court has clarified that such modification can be done under other relevant provisions of the Customs Act also which would include Sections 149 and 154 of the Customs Act.

*                                              *                                              *

In the instant case, petitioner has not sought for any refund on the basis of the self-assessment. It has sought reassessment upon amendment of the Bills of Entry by correcting the customs tariff head of the goods which would then facilitate the petitioner to seek a claim for refund. This distinction though subtle is crucial to distinguish the case of the petitioner from the one which was adjudicated by the Supreme Court and by this Court.”

 

Thereafter the Telangana High Court followed suit, albeit independently, to opine in Sony India (P) Ltd. v. Union of India[12] to opine that it was obligatory on the part of the tax officer to ensure that the documents were amended so as to being conformity with law and also that refund was made the taxpayer wherever due. In this case the High Court inter alia observed as under:

  1. 48. Further, it is the duty and responsibility of the Assessing Officer/Assistant Commissioner to correctly determine the duty leviable in accordance with law before clearing the goods for home consumption. The assessing officer instead, having failed in correctly determining the duty payable, has caused serious prejudice to the importer/petitioner at the first instance. Thereafter, in refusing to amend the Bill of Entry under Section 149 of the Act, to enable the importer/petitioner to claim refund of the excess duty paid, the assessing authority/Assistant Commissioner caused further great injustice to petitioner.

 

These decisions of the Bombay and Telangana High Court has thereafter been followed to various ends. For illustration, in Kirloskar Ferrous Industries Ltd. v. Commr. of Customs,[13] the Customs Tribunal directed the tax officers to treat the taxpayer’s request for reassessment as a request for amendment of the documents and thereafter process the refund claim. Thereafter, as another illustration, the Customs Tribunal in Commr. of Customs v. Vivo Mobile India (P) Ltd.[14] agreed with the contention of the taxpayer to the effect “that even if the refund applications that were filed cannot be entertained, then too it is open to the respondent to invoke the provisions of Section 149 or Section 154 of the Customs Act for either seeking amendment in the bill of entries or seeking correction in the bills of entry and then refund applications can be filed”. In this case the Customs Tribunal disposed the appeal permitting the taxpayer to file an application for amendment even at the second appellate stage with a direction to the tax officer to consider such application.


Conclusion


The aforesaid discussion reveals that two rounds of litigation and decisions of the Supreme Court have failed to course correct the taxpayers into initiating the appropriate proceedings and approaching the correct forum for seeking refund in customs matters. The courts, nonetheless, have been benevolent to the cause of the taxpayers and have sustained claims to creative options albeit within the statutory framework. As the law stands today, to the benefit of the taxpayer, the absence of a formal challenge to self-assessment under customs by way of an appeal is not fatal to the refund claim. In such instances, the taxpayer who may choose to supplement the refund claim with request for amendment/rectification, even belatedly, in order to get the refund claim addressed on merits.


† Tarun Jain, Advocate, Supreme Court of India; LLM (Taxation), London School of Economics.

[1] (2000) 6 SCC 650 : (2000) 120 ELT 285.

[2] (2005) 10 SCC 433 : (2004) 172 ELT 145.

[3] 2016 SCC OnLine Del 1238 : (2016) 335 ELT 446.

[4] SGS Marketing v. Union of India, 2016 SCC OnLine Cal 4915 :  (2016) 341 ELT 47.

[5] Micromax Informatics Ltd. v. Commr. of Customs, 2017 SCC OnLine Mad 22043

[6] ITC Ltd. v. CCE, (2019) 17 SCC 46, 69.

[7] (2019) 17 SCC 46.

[8] (2019) 17 SCC 46.

[9] (2019) 17 SCC 46.

[10] (2019) 17 SCC 46.

[11] (2021) 376 ELT 192.

[12] 2021 SCC Online TS 982.

[13] 2021 SCC OnLine CESTAT 225.

[14] 2021 SCC Online CESTAT 2578.

Case BriefsHigh Courts

Jharkhand High Court: S.N.Pathak, J., held that the employees of Telco Recreation Club cannot claim parity in pay and other benefits at par with the regular employees of Telco Ltd. The Bench held that,

“When the initial appointment letter of the workmen has not been issued by the petitioner-Management, the question of parity in pay etc. with the employees of the petitioner-Management does not arise.”

Factual Matrix of the Case

The petitioner Company-Telco Ltd., was a leading manufacturer and seller of automobiles in the Country. In 1958, the company had started a separate department under the name and style of “Telco Recreation Club” for carrying activities of welfare and recreation of its employees. The said Telco Recreation Club was a Society registered under Societies Act having a separate legal entity of its own with its own source of income, its own constitution and bye-laws and had no direct connection with the petitioner-company and the petitioner company, under its corporate responsibility, provide financial assistance to several Societies in the area including the said Club.

The case of the petitioner-company was that it had no control over TELCO Recreation Club, which was run and managed by a Managing Committee elected/ selected by its members, yet one Indra Deo Prasad on behalf of 21 persons employed in Telco Recreation Club made a claim of parity in pay and other benefits at par with the regular employees of Telco Ltd. It was also the stand of the company that the government of Bihar had found Telco Recreation Club to be an independent establishment and had made a reference being Ref. Case No. 06 of 1991 to Industrial Tribunal, Ranchi, which was never challenged or objected by the employees of the said Club and therefore, the petitioner-company could not be treated to be the employer of the workmen of Telco Recreation Club.

Decision by the Labour Court

 The Labour Court held that there existed a relationship of employer and employees between the parties, and Telco Recreation Club was a department/wing of the company, and that petitioner-company provided all facilities to said Club and had direct control over the Managing Committee of the said Club as the General Manager of Telco Ltd. was the President of the Club; the reference was maintainable. The Labour Court had further held that the concerned workmen were also permanent employees of  Teclo Ltd., and hence, they were entitled to get pay and other benefits at par with the employees of Telco Ltd. Accordingly, the issue was decided in favour of the workmen.

Findings of the Court

Considering the rival submission of the parties and on perusal of Judgments brought on record, the Bench reached the conclusion that the impugned Award suffered from patent illegalities and was based upon errors of law. Admittedly, there was no relationship of employer-employee between the petitioner-Management and the concerned workman. The Bench clarified,

“Neither in the appointment of workmen nor in the process of their engagement, the petitioner-Management has played any role, therefore, the industrial disputes against the petitioner-Management is wholly illegal and uncalled for.”

The concerned workmen were being governed by the rules, regulations and bye-laws of the Club and not the petitioner-Management. Even the disciplinary control was of the Club and not of the Management. Hence, the findings of the Tribunal were totally perverse and error of law. Finding force in the arguments of the petitioner-company that the Club was incorporated as a separate body and concerned workmen were admittedly appointed by the Club and not by the petitioner-Management, the Bench opined that the claim of the concerned workmen was not sustainable.

Reliance was placed by the Court upon the decision of Supreme Court in Bengal Nagpur Cotton Mills v. Bharat Lal, (2011) 1 SCC 635,  wherein it had held that two of the well-recognized tests to find out whether the contract labourers are the direct employees of the principal employer are-

  • Whether the principal employer pays salary instead of the contractor?
  • Whether the principal employer control and supervises the work of the employees?

Accordingly, the Bench held that in the instant case on both these counts, the workmen had failed to establish their case as they could not establish that they were working directly under control and supervision of the management, hence, the question of the employer-employee relationship did not arise at all.

Placing reliance on Bhuwanesh Kumar Dwivedi v. Hindalco Industries, (2014) 11 SCC 85,wherein, the Supreme Court had held that, “where Labour Court commits patent mistake in law in arriving at a conclusion contrary to law, the same can be corrected by the High Court. In the instant case, the Tribunal has committed a patent error of law to hold that the employer-employee relationship exists between the petitioner-Management and the concerned workman”; the Bench opined that

“In the instant case, the concerned workmen have sought for parity in pay and other benefits at par with the regular employees of TELCO Ltd. whereas the fact is that the petitioner-Management has never issued appointment letters to them rather these workmen were appointed by the Club, which is a separate entity.  When the initial appointment letter of the workmen has not been issued by the petitioner-Management, the question of parity in pay etc. with the employees of the petitioner-Management does not arise and as such the impugned Award suffers from patent illegalities and is fit to be interfered.”

In the backdrop of above, the impugned Award was quashed.  [Management of Motors Ltd. v. State of Jharkhand, 2021 SCC OnLine Jhar 413, decided on 18-06-2021]


Kamini Sharma, Editorial Assistant has reported this brief.


Appearance before the Court by:

For the Petitioner: Sr. Adv. Kamal Nayan Choubey, Sr.Adv. V.P. Singh, Adv.  Amit Kumar Das, Adv. Rashmi Kumar and Adv. Arun Kumar Singh

For the Respondents:     Sr. Adv. Ajit Kumar and Adv. Kumari Sugandha

For the State: GP-III O.P. Tiwari

Case BriefsTribunals/Commissions/Regulatory Bodies

State Consumer Disputes Redressal Commission, Telangana: Justice MSK Jaiswal (President) and Meena Ramanathan (Member) upheld the District Commission’s Order observing the consequence of suppressing the material fact while taking an insurance policy.

If the insurer can show that prior to the date of declaration of being healthy, the insured was suffering with ailment which was within her knowledge but was suppressed, then the insurance company is well within its right to repudiate the claim on the ground of suppression veri.

Complainant had submitted that his wife has obtained new money back policy from the OPs with a duration of 20 years for an assured sum of Rs 10,00,000. At the time of accepting the policy, the OPs carried out mandatory medical tests on the proponent and issued the policy in question.

While the policy was in force, the holder died due to cardiorespiratory arrest.

Being the nominee, complainant made the claim with the OPs and to the utter shock and surprise, the OPs repudiated the claim on the ground that the deceased life assured was suffering from lung cancer and took treatment prior to obtaining the policy, hence the claim was repudiated.

Complainant prayed to direct the OPs to pay the amount.

It was stated that OPs investigated the matter, and it was revealed that the deceased life assured suppressed the material fact relating to her health condition giving incorrect answers in the proposal form.

Analysis, Law and Decision

Bench noted that OPs submission was that the insured was suffering from serious ailment viz., lung cancer and suppressed the said fact.

Commission reiterated the legal position that if the insured is found to have suppressed the information which was material for the insurer to decide about the issuance of the policy is made out, the insurance company cannot be made liable to indemnify the insured on the ground that contractual obligations between insured and insurer are based purely on good faith and if insured has knowingly failed to reveal the information which was within her exclusive knowledge, the insurer could not be said to be liable to indemnify the insured.

In the present case, the insurance company contended that even before taking the policy, the insured was suffering from a serious ailment and was undergoing treatment and evidence was placed on record with regard to the said contention.

Coram held that perusal of the crucial documents on record leaves no room for doubt that the insured was aware that she was suffering from a serious ailment for more than 6 months prior to taking the insurance policy and suppressing all those facts, she took the policy.

Therefore, District Commission’s Order holding that complainant was not entitled to any relief was upheld and the complaint was dismissed.[K.N. Vidyakarji v. Life Insurance Corporation of India, FA No. 402 of 2020, decided on 15-06-2021]


Advocates before the Commission:

Counsel for the Appellant: Karakot Nagekar Sai Kumar

Counsel for the Respondents: KRL Sarma

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Dinesh Singh (Presiding Member) while addressing the instant first appeal upheld the State Commission’s Order in regard to a claim filed by the insured with the insurance company.

The instant appeal was filed under Section 19 of the Consumer Protection Act, 1986 challenging the Order passed by the State Consumer Disputes Redressal Commission, Maharashtra.

Complainant Firm took an insurance policy to cover its plant and machinery, electrical installations and stock-in-trade. The premium was paid for the valid policy. In 2005, an incident of fire took place and the insurance company was intimated after which survey was conducted.

The complainant had claimed an amount of Rs 17,00,000 but the surveyor assessed the loss at Rs 1,54,500. Since the Complainant Firm failed to submit the relevant record for verification, as mentioned in the Surveyor’s Report. Hence, Insurance Company filed the claim as ‘no claim’.

State Commission vide its impugned Order dated 22-09-2015 allowed the Complaint at the loss assessed by the Insurance Co.’s Surveyor i.e. at Rs 1,54,500 and awarded the said amount with interest at the rate of 9% per annum.

Complainant Firm appealed before this Commission for enhancement in compensation, specifically for accepting its claimed loss of Rs 17,00,000.

Analysis and Decision

Investigation and Survey by an insurance company are fundamental in determining the amount payable to the insured.

Bench observed that an insurance company is duty-bound to appoint its surveyor in accordance with the provisions of the Insurance Act, 1938 (Section 64 UM Surveyors or loss assessors specifically refers). A Survey cannot be disregarded or dismissed without cogent reasons.

Further, the Commission also observed that the onus,

[a] of showing that the Report of the Surveyor appointed by the Insurance Co. was flawed and

[b] of showing that actually, in fact, the loss was Rs 17,00,000, was on the Complainant Firm, which onus it failed to discharge.

Hence, in view of the above discussion, the Commission held that the State Commission had passed a reasoned order.

State Commission’s impugned order was upheld and confirmed.[Wilson Home Appliances v. New India Assurance Co. Ltd., 2020 SCC OnLine NCDRC 493, decided on 10-12-2020]


Advocates who appeared for the matter:

For the Appellant:  Ms Manisha T. Karia, Advocate

For Respondent 1: Mr S. M. Tripathi, Advocate

For the Respondent 2: Ex parte

Case BriefsHigh Courts

Bombay High Court: R.I. Chagla, J., while addressing a matter held that,

“Cause of action in rem does not merge with the Order / Judgment in personam given in respect of a cause of action in personam arising out of the same facts.”

Senior Advocate, Prashant Pratap stated that there is no Caveat against the arrest of the defendant-Vessel. Varsha Gawande, Court Associate upon checking the caveat against arrest Register stated that there is noCaveat against the arrest of Defendant Vessel.

Background

Claim in the Suit is for a Decree against the Defendant Vessel and for the arrest, sequestration, condemnation and sale of the Defendant Vessel, for securing and / or satisfying the Plaintiff’s claim of the principal amount of USD 1,120,914 and USD 25,000 for cost of litigation in India aggregating USD 1,145,914 plus poundage with interest at the rate of 2% per month from the date of the Suit till payment and / or realization as per the Particulars of Claim.

Plaintiff has not been paid in respect of equipment supplied and services rendered, which were necessary for the operation of the Defendant Vessel.

Thus, to recover the above-stated unpaid amounts, present suit was filed and Judge’s Order had been taken out for arrest of Defendant Vessel.

Urgent relief which had been sought is for the arrest of the Defendant Vessel as there was an apprehension as stated in the Plaint that if the Defendant vessel was permitted to sail, Plaintiff would have no legal recourse whatsoever to recover the amounts due to it and eventually these proceedings will be rendered infructuous.

In Court’s opinion, case for arrest of defendant-vessel was made out.  Dues of the Plaintiff for providing equipment and services to the Defendant vessel is evidenced from the Letter of Award read with Sub Contract and invoices annexed.

Thus, Claim would fall within the meaning of a maritime claim under Section 4(1)(I) of the Admiralty (Jurisdiction of Settlement of Maritime Claims) Act, 2017.

Plaintiff fled the present suit seeking attachment of the Defendant vessel, which is currently within jurisdiction of this Court.

Further it was submitted that the proceedings before the Courts in Abu Dhabi are in personam and the present Suit is in rem against the Defendant Vessel.

Hence for the above, Bench stated that,

“proceedings before the Courts in Abu Dhabi are in personam and cannot come in the way of the present Suit, which is an action in rem and that the Plaintiff is entitled to commence an action in rem, whilst the action in personam is still pending and has not proceeded to a final Judgment.”

Balance of convenience lies with plaintiff to whom, almost irreversible prejudice would be caused if reliefs were to be denied.

Therefore, Court directed the Sheriff of Mumbai to effect the arrest/seizure or detention of defendant vessel along with her hull, engines, gears, tackles, bunkers, machinery, apparel, plant, furniture, fixtures, appurtenances and paraphernalia, plant and machinery at present at anchorage at the Port of Mumbai or wherever she has within the territorial waters of India until the satisfaction of the Plaintiff’s claim.

Further the Bench stated that,

after service of this Order of Arrest, if the arrested Vessel is not released by the furnishing security or bail amount within 6 weeks of service, or an application for vacating the order of arrest is not fled, or the vessel is found abandoned by the person-in-charge of the Vessel or owner, or is found unmanned, then, in such an event, on an application being made by the Plaintiff, the office of the Sheriff of Mumbai shall present a Sheriff’s report for auctioning the Vessel within a period of fourteen days from the date of receiving communication from the Plaintiff’s Advocate or from the date of knowledge of abandonment of Vessel.

[Fugro Survey (Middle East) Ltd. v. DLB 1600 (IMO No. 9681651), DHOC NO. LD-VC-53-2020, decided on 02-05-2020]

Case BriefsHigh Courts

Jharkhand High Court: A Division Bench of Aparesh Kumar Singh and Kailash Prasad Deo, JJ. dismissed the writ petition being devoid of merits.

Brief facts of the case are that the father of the applicant died on 24.08.2009. After which his mother filed an application dated 13.04.2010 for grant of compassionate appointment in his favour as the deceased employee died leaving behind a widow, two sons and one married daughter. The name of the applicant was at serial number 30 out of 73 persons and 19 out of 59 candidates in 2012 and 2013 respectively. 

Now by the impugned order dated 21.05.2015, the cases of applicants got rejected because they have been considered five and they could not find place in the list of deserving candidates, either in view of non-availability of vacancies or more deserving persons listed above. The Tribunal rejected the arguments of the applicants and held the applicant has received due consideration along with others and no case of discrimination holds ground. 

The applicant being aggrieved by an order passed by Central Administrative Tribunal, seeking quashing of the order of rejection of compassionate appointment dated 21.05.2015 has preferred this writ petition.

The counsel for the petitioner, Ajay Kumar Pathak, submitted that the claim of compassionate appointment has been rejected on arbitrary grounds. Proper evaluation of the claim as per the defined yardstick has not been made. Learned Tribunal should have accorded sympathetic consideration since the father of the applicant had died on 24.08.2009 in harness.

The counsel for the respondent, Laxman Kumar, has opposed the prayer. He submitted that applicant’s claim was considered as per the uniform defined criteria on five occasions, one after the other on applications made for reconsideration. The previous orders of rejection were not challenged.

The Court observed that in the matter of compassionate appointment, vacancies are limited for a particular year out of the total post in the cadre i.e., 5%. Applicant’s claim was considered four times earlier and each time he did not find place amongst the candidates falling within the vacancies for that year against the quota of compassionate appointment. Applicant has not been able to show that he had a better claim then the other candidates above in the list. Moreover, the earlier orders of rejection were also not challenged and had become stale.

In view of the above, the Court decided not to interfere in the impugned order passed by the learned CAT and dismissed the writ petition. [Mukesh Kumar Das v. Union of India, 2020 SCC OnLine Jhar 231, decided on 02-03-2020 ]

Case BriefsForeign Courts

Supreme Court of the Democratic Socialist Republic of Sri Lanka: Full Bench of Buwaneka Aluwihare, Vijith K. Malalgoda, and S. Thurairaja, JJ. allowed the appeal by setting aside the order of the Learned High Court Judge and directed the District Court to proceed to conclude the case.

In the present case, the appellant filed the case against the judgment of the High Court of the Western Province holden in Gampaha (also referred to as the ‘High Court’) in a Testamentary Case. The concerned parties had raised their objections on the Letter of Administration at the Testamentary Case which the 12th Respondent-Respondent-Appellant had obtained from the District Court of Negombo. The District Court had ordered to dispose of this matter on written Submissions of 06-10-1998. Since the original petitioner had died, his son was substituted in the above mentioned testamentary. The substituted petitioner had raised an objection with regard to the inventory and thus, made an application to re-inquire the matter orally. Later, the 12th Respondent- Respondent-Appellant objected and by order dated 01-03-2013 District Judge decided not to allow the fresh submissions.

Further, the Substituted Petitioner-Petitioner- Respondent appealed to the Provincial High Court of Gampaha. The appeal was allowed by the Civil Appellate Court. The question of law, is whether a substituted party in any action can deny the acceptance of the original party, also whether the substituted party can be estopped from taking a contrary position to the party. As per, Section 395 of the Civil Procedure Code Act, if the sole plaintiff has died the legal representative may be substituted by the court if the right to sue is still there. The pleas available to a Legal Representative was observed in an Indian Order, Gurdial Singh v. Gurdev Singh, 1991 SCC OnLine P&H 579. In the following case, it was held that in case of any dispute the legal representative has the right to continue the suit but he cannot claim anything which was not mentioned by the original plaintiff.

Thus, in the present case, it was held that the District Court’s order passed on 01-03-2013 is correct. Lastly, the Court ordered the Judge of the District Court to conclude this long-running case and the parties are directed to co-operate with the District Judge. [Kandiahpillai Shanmuganathan v. Kandiahpillai Vythilingam, 2019 SCC OnLine SL SC 13, decided on 11-09-2019]

Case BriefsHigh Courts

Bombay High Court: M.G. Giratkar, J. dismissed a second appeal filed against the judgments of the lower courts wherein the partition suit brought by the appellant was dismissed.

One Maghadeo, ho was the biological father of the appellant, had given the appellant in adoption to his real brother Fakira, who was childless. The appellant had now brought a partition suit, claiming his share in the property of Mahadeo. The Civil Judge dismissed the appellant’s suit holding that he was not entitled to claim partition in the property of his real father. The appeal filed before the District Judge was also dismissed. Hence, the appellant filed the instant second appeal.

R.L. Khapre, Advocate for the appellant, contended that the appellant had never been given in the adoption and, therefore, he had a right in the property left by his real father. Mahadeo, Per contra, S.R. Deshpande, Advocate representing the respondent, opposed the instant appeal.

On perusal of the record, the High Court found that the factum of the appellant having been given in adoption by Mahadeo to Fakira had been duly proved by the documents as well as his own admissions. Also, the testimony of the priest in whose presence the process of adoption was completed, was also found reliable and creditworthy. It was held: “The admission of the plaintiff in his cross-examination shows that his father Mahadeo died in 1963. Since then, till filing of the suit in the year 2001, he did not claim any partition from the defendants. The silence for a long time on the part of the plaintiff partition from the defendants. The silence for a long time on the part of the plaintiff itself shows that he was given in adoption to Fakira. His conduct shows that he is adoptive son of Fakira. His admissions and documents clearly show that he has inherited the property left by his adoptive father Fakira. Therefore, he cannot claim any partition in the property of his real father Mahadeo.”

Incidentally, it was submitted on behalf of the appellant that the issue in respect of adoption was not framed by the trial court. Therefore, there was no opportunity for the plaintiff to adduce proper evidence.

On this aspect, the Court relied on Satyadhyantirtha Swami v. Raghunath Daji Patil, 1925 SCC OnLine Bom 107, wherein it was held: “If there is no issue framed on a question but the parties have adduced evidence and discussed it before the Court, and the Court decides it as if there was an issue about it, the decree need not be set aside in appeal on the ground merely that no such issue was framed.” In the instant case, it was held that Issue 1 framed by the trial court included the issue of adoption and it could not be said that the appellant had no opportunity to adduce evidence on the said issue.

In such view of the matter, the appeal was held to be without merits and was, thus, dismissed. [Pandhari v. Vithoba, 2019 SCC OnLine Bom 3006, decided on 17-10-2019]

Case BriefsHigh Courts

Jharkhand High Court: A Division Bench of H.C. Mishra and Deepak Roshan, JJ., set aside the impugned orders and directed the Assessing Authority to re-examine the claim of the petitioner in view of original tax invoices.

The facts of the case were that the petitioner has claimed Input Tax Credit (ITC) to the tune of Rs 5,34,22,304.71. The assessing officer had allowed ITC only to the tune of Rs 3,40,37,182.46 and denied the balance ITC claim on the ground that for this amount, JVAT 404 form was not submitted by the petitioner.

The counsel for the petitioner submitted that as per provision of Section 18(6) of the JVAT Act, 2005, claim of ITC of the petitioner was required to be considered by the assessing officer on the strength of tax invoices in originally produced by the petitioner showing payment of tax. However, the said claim of the petitioner was denied by the Assessing Officer by relying upon Rule-35(2) of the JVAT Rules, 2006 which apart from prescribing the condition of original tax invoices also lays down additional condition of producing a declaration in Form JVAT 404. The contention of the petitioner is that Rule 35(2) of the JVAT Rules, 2006 provides for furnishing declaration Forms JVAT 404 for availing benefit of ITC to the extent that it cannot be treated to be mandatory in nature but as directory in nature, especially in view of fact that Section 18(6) of the JVAT Act, 2005 does not provide for furnishing of JVAT 404 forms for the purpose of claiming benefit of ITC and it only contemplates production of tax invoices in original.

In view of the above, the court held that the instant matter is squarely covered by the judgment of Brahmaputra Metallics Ltd. v. State of Jharkhand, 2019 SCC OnLine Jhar 816 allowed by this Court vide order dated 09-07-2019 and directed the respondent to re-examine the claim of the petitioner towards its claim of ITC in respect of which the petitioner has not submitted JVAT-404 Forms, by verifying the said claim from tax invoices in original containing particulars of sale evidencing the amount of input tax paid and if satisfied, extend the benefit of ITC to the petitioner.[Simplex Infrastructures Ltd., Ranchi v. State of Jharkhand, 2019 SCC OnLine Jhar 1059, decided on 20-08-2019]

Case BriefsHigh Courts

Patna High Court: Rajendra Kumar Mishra, J. disposed of the writ petition saying that the final decision regarding the petitioner’s claim rested with the respondent authorities.

A special leave application was filed on behalf of the appellant under Section 378(4) of the Code of Criminal Procedure, seeking leave to file an appeal against the judgment passed by the Additional Chief Judicial Magistrate wherein he had acquitted the respondent from the charges under Sections 323 and 420 of the Penal Code, 1860.

The mother of the appellant had filed a complaint case in the Court of SDJM., Sheohar at Sitamarhi. The mother of the appellant, aged about 85 years used to live with her son Daya Shankar Mishra (Appellant) and her other son, Ashutosh Mishra (Respondent) used to live separately. In absence of Daya Shankar Mishra, the respondent took her to Sheohar for treatment on 25-01-2008 and 28-01-2008, but in the garb of such treatment, he managed to take her thumb impression and signature on papers saying that her thumb impression and signature were required for her treatment. The respondent got the property transferred to his name by way of the thumb impression and signatures that he had obtained, and when he was questioned by the appellant he threatened her in return.

The learned ACJM, Sheohar at Sitamarhi acquitted the respondent on the grounds that the prosecution failed to prove the charges under Sections 323 and 420 of the Penal Code.

The Panchnama clearly indicated that the said plot of land was transferred in the name of the respondent and the trial Court committed an error in not considering the evidence.

The Court held that the Trial Court concluded that neither the complainant had filed any suit for cancellation of the sale deed nor any competent jurisdiction has declared the sale deed null and void and that the complainant had not denied giving the thumb impression and signature on the sale deed, rather, her claim was that her thumb impression and signature obtained on papers were converted into a sale deed. The Court instead failed to make an attempt to compare the thumb impression and signature of the sale deed with the signature and thumb impression of the register maintained in the office of Sub-Registrar. The Court found no reason to allow this Special Leave to Appeal.

In view of the above-noted facts, the instant application was dismissed accordingly.[Daya Shankar Mishra v. State of Bihar, 2019 SCC OnLine Pat 1429, decided on 08-08-2019]

Case BriefsHigh Courts

Jharkhand High Court: Sanjay Kumar Dwivedi, J. contemplated the mercy petition filed by a petitioner who sought re-employment in a Coal Company.

Counsel for the petitioner Ranjan Kumar Singh, submitted that petitioner was dismissed from services on the ground of absent for 58 days and that after dismissal, the petitioner, who is an illiterate person, approached the authorities for re-employment in terms of the scheme but his representation was not considered in the true spirit of the Scheme.

On the contrary, the counsel for the respondent Company submitted that the petitioner had filed the representation after nine years of his dismissal, thus, the writ was liable to be quashed due to delay.

The Court observed that the petitioner was an illiterate person, as it was evident from the representation he had filed with the respondents-authorities on which he gave his thumb impression, and he wasn’t able to understand the legal impediment of approaching at a belated stage. Hence, his claim was not denied solely on the ground of delay and needs consideration.[Dulal Bouri v. BCCL, 2019 SCC OnLine Jhar 804, decided on 08-07-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Armed Forces Tribunal: A Coram of Justice SVS Rathore (Judicial Member) and Air Marshal BBP Sinha (Administrative Member) allowed an ex-hawaldar’s application for disability pension holding that stress and strain of military service can also happen in peace areas.

Applicant herein was enrolled in the Indian Army in 1971 and after serving the Army for 22 years, he was discharged from service in 1973. Thereafter, the applicant was inducted in the Defence Security Corps (DSC) as Sepoy in medically fit condition and after serving for 15 years in the DSC, he was discharged therefrom in 2010. Before applicant’s discharge, the Release Medical Board (RMB) considered his disability as ‘primary hypertension’ and opined the disease as “neither attributable nor aggravated” (NANA) by military service and assessed it as 30% for life. The Medical Board further assessed the disability qualifying for a disability pension as NIL for life. Aggrieved with non-payment of disability pension, the applicant preferred representation which was rejected by the appropriate authority. Hence, the present petition.

The Tribunal noted that the only reason given by the RMB for declaring the disease as NANA was that it had not started in peace area and not in a field, high altitude area or counter-insurgency operation area. This reason was outrightly dismissed by the Tribunal opining that it amounted to saying that there is no stress and strain of military service in peace areas. Therefore, in terms of the judgment of Dharamvir Singh v. Union of India, (2013) 7 SCC 316 it was held that the applicant’s disability of ‘primary hypertension’ be considered as aggravated by military service.

The impugned order was set aside and the applicant was held to be entitled to benefit of rounding-off of disability pension. Relying on Shiv Dass v. Union of India, (2007) 9 SCC 274 he was directed to be granted disability pension at 30 percent for life which would be rounded off to 50 percent from three years prior to the filing of this application.[Ex Havildar Anand Singh v. Union of India, 2019 SCC OnLine AFT 1408, decided on 26-03-2019]

Case BriefsHigh Courts

Bombay High Court: M.S. Sonak, J. while disposing of a petition filed by eatery owners whose licences have been cancelled, directed the Municipal Corporation of Greater Mumbai to accept petitioners’ application for renewal of license and thereafter dispose of such application on its own merits and in accordance with law as expeditiously as possible.

The challenge in the present petition was to the order dated 20-4-2019 by which the Additional Chief Judge (Appeal Court) had dismissed petitioners’ application seeking interim relief pending disposal of the Municipal Appeal in which the petitioners have challenged certain orders cancelling the license to operate the eating places. 

The High Court was of the view that no case for interference was established. The grant of an interim injunction would virtually amount to allowing the appeal filed by the petitioners. It is pertinent to note that the petitioners had prayed for an interim mandatory injunction to direct the Municipal Corporation of Greater Mumbai to renew their license which has already expired. Such orders, according to the Court, cannot normally be made at the interim stage and that too in the absence of a very strong prima facie case. It was held by the Court: “Since the license has already expired, there is no question of the petitioners claiming for any interim relief and on the basis of same continuing or commencing the business from the suit premises”.

Jamshed Master, Advocate for the petitioners submitted, however, that the Municipal Corporation was not even accepting petitioner’s application for renewal of license, much less considering them in accordance with the law. The High Court held the Municipal Corporation of Greater Mumbai cannot simply refuse to accept the application and thereby avoid making a decision as to whether the petitioners were entitled to renewal or not. 

Accordingly, without disturbing the impugned order, the Court directed the Municipal Corporation of Greater Mumbai to accept petitioners’ application for renewal of license and thereafter dispose of such application on its own merits and in accordance with law as expeditiously as possible and in any case within a period of two months from the date of such application. [Vijay D. Shetty v. Municipal Corpn. of Greater Mumbai, WP (ST) No. 13549 of 2019, dated 03-05-2019]

 

Case BriefsForeign Courts

High Court of South Africa, Eastern Cape Local Division: This application was filed before G.J. Gajjar, AJ., under Rule 28(4) of the Uniform Rules of Courts by which the applicant seeks to amend its particulars of claim pursuant to a notice of objection filed by the respondent.

Respondent had objected to the amendment in particulars on the ground that it was not possible to determine what work was undertaken to remedy the alleged defective work or what portion of invoices was reduced by a certain aggregate sum. The applicant and respondent had entered into an oral agreement under which respondent had provided a programmer who was not appropriate for managing the PLC program due to which applicant had to recheck and get it corrected by a third party and company E for necessary and related costs. Applicant in its proposed amended particulars of claim has attached seven invoices made out to company E. The amended particulars was thus reducing this amount by 50% as a discount by the third party. Thus, this reduced amount as an amendment to the particulars was criticized by respondents. Respondent submitted that the plaintiff, at the very least, is required to specifically stipulate what portion of the attached invoices was not for its account and that Rule 18(4) should be read conjunctively with the provisions of Rule 18(10) in regard to the particulars required when claiming damages.

High Court was of the view that proposed amended particulars of claim do not disable the defendant from assessing the quantum of the claim. Therefore, the objection made by the respondent was dismissed and the particulars of claim was amended. [Shones Automation (PTY) Ltd. v. Smokey Mountain Trading 444 (PTY) Ltd., Case No. 1554 of 2018, decided on 19-02-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Justice V.K. Jain (Presiding Member) dismissed an appeal filed by a jeweller, assailing repudiation of his claim for insurance.

The complainant/appellant obtained a Jewellers Block Policy from the respondent company for Rs 48 lakhs. During the period of the policy, some burglars entered their jewellery shop and took away ornaments kept in a safe. Respondent was intimated and a surveyor was appointed to visit the site and assess the loss. Surveyor submitted a report recommending repudiation of the claim on the ground that there was no sign of breaking the safe or its locks. Aggrieved appellant approached the State Commission by way of a consumer complaint. State Commission dismissed the complaint on the ground that the insured had failed to take all reasonable steps for safety of the property.

NCDRC noted an exception clause in the policy which stated that if it is established that the safe had been opened by the intruders, using either the original or a duplicate key of the safe belonging to the complainant, the loss would not be covered unless it is shown that the key, or duplicate key, as the case may be, had been obtained by threat or by violence. In the present case, the alleged use of key belonging to the insured was based upon the fact that one key of the safe was found in a glass showcase underneath a weighing scale. It was opined that in the normal course of human conduct, burglars would either take away the key or just throw it somewhere in the shop, instead of making efforts of keeping it under a weighing scale inside the glass showcase.

The Commission further noted that it was a condition of the policy that the premises where the jewellery was kept were to be protected by employing a watchman. But the said condition had not been met by the appellant.  Lastly, the appellant was not maintaining proper books of accounts and had failed to prove the actual loss suffered by him.

For the aforesaid reasons, it was held that the order of State Commission, dismissing the complaint filed by the appellant, did not call for any interference by this Commission.[S.B. Jewellers v. United India Insurance Co. Ltd., First Appeal No. 154 of 2013, Order dated 04-04-2019]

Case BriefsHigh Courts

Uttaranchal High Court: A Bench of Manoj K. Tiwari, J. while allowing the petition quashed the order of the Chief Education Officer.

In the present matter, the petitioner was a Class-IV employee, serving in a Government aided minority institution. He was appointed in the year 2002 on the post of Night Chowkidar and having been completed 17 years of continuous satisfactory service, and being the seniormost Class-IV employee, he was eligible for promotion to Class-III post of Clerk. Therefore, the petitioner through learned counsel Mr Alok Mehra, approached the Court being aggrieved by the communication of the Chief Education Officer, Almora where the petitioner was declared ineligible for promotion only on the ground that he was appointed on the post of Night Chowkidar.

The Court while quashing the said order of the respondents held that, “Promotion is governed by Statutory Rules and every candidate, who is eligible in terms of the Rules, has a Fundamental Right to be considered for promotion against available vacancies. Therefore, imposition of new condition regarding eligibility by the Chief Education Officer, which has the effect of taking away right to be considered for promotion to the petitioner, cannot be sustained”.

Respondents were further directed to consider petitioner’s claim for promotion along with other eligible persons.[Lal Singh Bisht v. State of Uttarakhand, 2019 SCC OnLine Utt 229, Order dated 07-03-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Armed Forces Tribunal (AFT): The Bench of S.V.S. Rathore, J. and Lt. General N.B. Singh (Member) dismissed an application challenging the denial of family pension, holding that the same was without any substance.

Applicant herein claimed to be the eldest son of a deceased soldier Mohd. Rafique and applied for a family pension as he was totally blind. His claim for pension was denied by respondent on the ground that his name did not figure in the service book of Mohd. Rafique. Aggrieved thereby, the instant application was filed under Section 14 of the Armed Forces Tribunal Act, 2007.

Learned counsel for the applicant placed reliance on relation certificate issued by the SDM, Sultanpur, wherein apart from five other sons and daughters of Mohd. Rafique, the name of the applicant was also mentioned. Learned counsel for the respondents raised an objection to this certificate stating that the certificate clearly mentioned that it had been issued only for administrative purposes and that it could not be used in any court of law.

The Tribunal held that a plain reading of Regulations 216 and 219 of the Pension Regulations for the Army, 1961 (Part-1) made it clear that name in the service record as son of the applicant was a condition precedent to grant the relief claimed. Admittedly, the name of the applicant was not mentioned as nominee in the service record of the deceased soldier. This gave rise to an inference that the father of the applicant deliberately avoided mentioning the name of the applicant in the service record to debar him from such pension. Thus, the application was dismissed holding that there was no infirmity in the impugned order.[Akhtar v. Union of India, 2019 SCC OnLine AFT 3, Order dated 13-02-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Armed Forces Tribunal (AFT): The Bench of S.V.S. Rathore, J. and Air Marshal BBP Sinha; Members, dismissed an application claiming disability pension, on the grounds that the disease was neither attributable to nor aggravated by the military service.

In the present case, the original applicant (deceased) developed pain and swelling in his right thigh following an injury while doing the parade. The Categorisation Medical Board was held on 14-08-1964 at Military Hospital, Lucknow for the disability “Leomyo Sarcoma Right Thigh” and the applicant was placed in category CEE (temporary) for 6 months. On account of the said disability, grant of disability pension was sought for. The respondents filed a counter affidavit stating that the documents relating to the case were destroyed after the expiry of the period of retention i.e. 25 years and in the absence of a medical report, it is not possible to give any specific finding.

The Court opined that it was not in the position to accept that the disease of the applicant was either attributable to or aggravated by military service, primarily since, there was a substantial delay of 44 years and also because the reason as to why the disease could not be detected at the time of enrolment cannot be scrutinised to decide attributability.[Faquir Baksh Singh v. Union of India, Original Application No. 543 of 2017, Order dated 18-02-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Armed Forces Tribunal (AFT): The Bench of S.V.S. Rathore, J. and Air Marshal BBP Sinha (Member) dismissed a Lance Naik’s claim for pension on the ground that he had been declared as a deserter and dismissed from service.

Petitioner herein joined the Indian Army on 31-10-1985 and was sanctioned casual leaves for five days from 08-05-2001 to 12-05-2001. During the course of casual leave, he became mentally disturbed and could not reach his home. In the year 2003, after recovering, he reported to his unit on 25-03-2003. Petitioner pleaded that he was entitled to service pension as he had completed 15 years of service; but since no pension was sanctioned in his favour, he filed a writ petition in the High Court of Allahabad. The said Court transferred his petition to this Tribunal under Section 34 of the Armed Forces Tribunal Act, 2007.

Respondents’ contention was that petitioner did not report back after availing casual leave therefore, he was declared a deserter and apprehension roll was issued against him on 28-05-2001. He was advised to report to his unit, but the petitioner never approached his unit and continued to remain a deserter. Thus, he was dismissed from service with effect from the date of his desertion and, since his entire service was confiscated, he was not entitled to any pension.

The Tribunal noted that the petitioner had been declared as a deserter and dismissed from service under Section 20 (3) of the Army Act. He claimed for a pension without challenging his dismissal order and hence the said dismissal order had become final. It was concluded that since the petitioner had been dismissed from service, therefore, in view of provisions contained under Regulation 113 (a) of Pension Regulations for Army, 2008, his entire service stood confiscated and he had no pensionable service to his credit.

In view of the above, the instant application was dismissed.[Lal Chand Ram v. Union of India, 2019 SCC OnLine AFT 2, Order dated 07-02-2019]

Case BriefsHigh Courts

Meghalaya High Court: Yaqoob Mir, CJ dismissed a petition for compassionate appointment holding it to be without merits.

Petitioner’s father was in Meghalaya Police who died in harness in the year 1999 while debuted for operational duty at Shillong, West Khasi Hills District. In 2017, after a lapse of 18 years, petitioner applied for the compassionate appointment. His application was considered and rejected stating that in terms of the relevant Department Order, the application for appointment on compassionate grounds had to be filed within 1 year from the date of death of the Government servant or from the date of acquiring a necessary educational qualification. Therefore, petitioner’s claim was rejected as time-barred.

R. Sharon, Advocate for the petitioner admitted that he acquired the necessary qualification in 2011 but applied only in the year 2017.

The High Court found favour with submissions of Advocate General A. Kumar. It observed, “Compassionate appointment admittedly is a departure from normal rules of appointment but same has laudable object of saving the deceased’s family from crisis and financial complications. Here in the instant case, the family has survived for 18 years.” Petitioner failed to show any rule which would provide for considering his application and resultantly, the petition was dismissed. [Ravi Koch v. State of Meghalaya, 2019 SCC OnLine Megh 4, dated 04-02-2019]