11 April 2018   

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CJI has all the powers to decide on allocation of cases: Supreme Court

CASE LAWS

2018-TIOL-130-SC-MISC-LB

ASOK PANDE Vs SUPREME COURT OF INDIA: SUPREME COURT OF INDIA (Dated: April 11, 2018)

Constitution of India & Supreme Court Rules, 2013 - Writ - Articles 32, 124, 136 & 145 & 217 ; Orders VI & XXXVIII, Rule 12

Keywords - Allocation of cases - Constitution of benches - Mandamus - Powers of Chief Justice

THE petitioner, an individual is a member of the Bar, and claimed to have filed over two hundered public interest litigations in the high courts and before this Court as well. He filed the present writ, seeking relief on two counts. Firstly, the petitioner sought that a set procedure be established regarding the constitution of benches and for allotment of jurisdiction to different benches in the Supreme Court. He also sought that a direction be issued to the effect that a three-judge bench in the court of the Chief Justice of India (CJI), should comprise of the CJI and two senior-most judges. He further sought that a direction be issued to the effect that a five-judge Constitutional bench comprise of five senior-most judges or three senior-most judges and two junior-most judges. The petitioner sought sought that the Supreme Court constitute the Supreme Criminal Court, Supreme PIL Court, Supreme Tax Court, Supreme Service Court, Supreme Land Dispute Court and Supreme Misc. Matter Court.

Moreover, the petitioner also sought that directions be issued to the Allahabad High Court to evolve rules and procedures with respect to formation of benches and vesting of jurisdiction to them, on lines of the rules so framed by the Apex Court. The petitioner then went on to give his suggestions as to how to constitute the benches of this Court.

On hearing the writ, the Supreme Court was of the view that,

Whether the CJI has the undivided authority to constitute benches and allocate cases, and that entrustment of such authority is to ensure the indepedent position of the Apex Court - YES: SC

Whether mandamus can be issued to a body or authority vested with a rule making power, directing it to make rules or to make them in a particular manner - NO: SC

Whether a directions can be sought to constitute benches of the Apex Court in a particular manner or seeking separate divisions of the Apex Court - NO: SC

Whether directions seeking constitution of benches in a particular manner casts an aspersion over exclusive duty & authority of the CJI to constitute benches and to allocate cases to them - YES: SC

Whether seeking the assignment of certain cases or category of cases to a particular judge, challenges the ability, competence & qualification of other judges - YES: SC

++ this court at the outset, expresses its disapproval of the manner in which the petitioner has sought to cast aspersions on the bench of the Allahabad High Court which was assigned with the hearing of the contempt proceedings against the petitioner. What the petitioner has averred is not based or founded upon any judicial order. The aspersions which he has cast on the judges of the High Court are unwarranted. Significantly, the correctness of an order passed by the High Court in the contempt proceedings initiated against the petitioner is not in question in the present proceedings. If the petitioner was aggrieved by a judicial order of the High Court, remedies were available to him under Article 136. As a member of the Bar, the petitioner should know better than to question the conduct of a judicial proceeding before the High Court in a writ petition under Article 32 of the Constitution. This is yet another instance of reckless allegations being levelled against judges of the High Court in a proceeding where the correctness of the orders passed by the High Court is not in issue; necessary parties to that proceeding are not before the court; and though the legality of a judicial order cannot be questioned in an original proceeding under Article 32.

++ examined relevant portions of a decision of this court in State of Rajasthan v Prakash Chand wherein the position of the Chief Justice of a High Court was elucidated. Also examined relevant findings of a decision of this court in Campaign for Judicial Accountability and Reforms vs Union of India wherein it was held that the principle which was noticed and recognised in the decision of this court in Prakash Chand in relation to the jurisdiction and authority of the Chief Justice of the High Court "must apply proprio vigore as regards the power of the Chief Justice of India". The latter decision also reiterated the position of the Chief Justice of a High Court.

++ in view of this binding elucidation of the authority of the Chief Justice of India, the relief which the petitioner seeks is manifestly misconceived. For one thing, it is a well settled principle that no mandamus can issue to direct a body or authority which is vested with a rule making power to make rules or to make them in a particular manner. The Supreme Court has been authorised under Article 145 to frame rules of procedure. A mandamus of the nature sought cannot be issued. Similarly, the petitioner is not entitled to seek a direction that Benches of this Court should be constituted in a particular manner or, as he seeks, that there should be separate divisions of this Court. The former lies exclusively in the domain of the prerogative powers of the Chief Justice.

++ quite apart from the fact that the relief sought is contrary to legal and constitutional principle, there is a fundamental fallacy in the approach of the petitioner, which must be set at rest. The petitioner seeks the establishment of a binding precept under which a three judge Bench in the Court of the Chief Justice must consist of the Chief Justice and his two senior-most colleagues alone while the Constitution Bench should consist of five senior-most judges (or, as he suggests, three 'senior-most' and two 'junior-most' judges). There is no constitutional foundation on the basis of which such a suggestion can be accepted. For one thing, as was noticed earlier, this would intrude into the exclusive duty and authority of the Chief Justice to constitute benches and to allocate cases to them. Moreover, the petitioner seems to harbour a misconception that certain categories of cases or certain courts must consist only of the senior-most in terms of appointment. Every Judge appointed to this Court under Article 124 of the Constitution is invested with the equal duty of adjudicating cases which come to the Court and are assigned by the Chief Justice. Seniority in terms of appointment has no bearing on which cases a Judge should hear. It is a settled position that a judgment delivered by a Judge speaks for the court (except in the case of a concurring or dissenting opinion). The Constitution makes a stipulation in Article 124(3) for the appointment of Judges of the Supreme Court from the High Courts, from the Bar and from amongst distinguished jurists. Appointment to the Supreme Court is conditioned upon the fulfilment of the qualifications prescribed for the holding of that office under Article 124(3). Once appointed, every Judge of the Court is entitled to and in fact, duty bound, to hear such cases as are assigned by the Chief Justice. Judges drawn from the High Courts are appointed to this Court after long years of service. Members of the Bar who are elevated to this Court similarly are possessed of wide and diverse experience gathered during the course of the years of practise at the Bar. To suggest that any Judge would be more capable of deciding particular cases or that certain categories of cases should be assigned only to the senior-most among the Judges of the Supreme Court has no foundation in principle or precedent. To hold otherwise would be to cast a reflection on the competence and ability of other judges to deal with all cases assigned by the Chief Justice notwithstanding the fact that they have fulfilled the qualifications mandated by the Constitution for appointment to the office.

++ underlying the submission that the constitution of Benches and the allocation of cases by the Chief Justice must be regulated by a procedure cast in iron is the apprehension that absent such a procedure the power will be exercised arbitrarily. In his capacity as a Judge, the Chief Justice is primus inter pares: the first among equals. In the discharge of his other functions, the Chief Justice of India occupies a position which is sui generis. Article 124(1) postulates that the Supreme Court of India shall consist of a Chief Justice of India and other Judges. Article 146 reaffirms the position of the Chief Justice of India as the head of the institution. From an institutional perspective the Chief Justice is placed at the helm of the Supreme Court. In the allocation of cases and the constitution of benches the Chief Justice has an exclusive prerogative. As a repository of constitutional trust, the Chief Justice is an institution in himself. The authority which is conferred upon the Chief Justice, it must be remembered, is vested in a high constitutional functionary. The authority is entrusted to the Chief Justice because such an entrustment of functions is necessary for the efficient transaction of the administrative and judicial work of the Court. The ultimate purpose behind the entrustment of authority to the Chief Justice is to ensure that the Supreme Court is able to fulfil and discharge the constitutional obligations which govern and provide the rationale for its existence. The entrustment of functions to the Chief Justice as the head of the institution, is with the purpose of securing the position of the Supreme Court as an independent safeguard for the preservation of personal liberty. There cannot be a presumption of mistrust. The oath of office demands nothing less.

Writ Petition Dismissed

2018-TIOL-129-SC-IT

PR CIT Vs PLANMAN HR PVT LTD: SUPREME COURT OF INDIA (Dated: April 6, 2018)

Income Tax - Sections 7(24)(x), 36(l)(va) & 43B.

Keywords: EPF - Employer's contribution - Eemployee's contribution & Professional tax.

The Assessee-company, engaged in providing HR outsourcing services. The Assessee had filed its return for the relevant AY. The regular assessment proceeding was completed by the AO. When the matter reached before both the CIT(A) and the Tribunal, it was found that the payment made by the Assessee employer towards the employees’ contribution of the Provident Fund was made before the date of filing the Assessee's return of income. Further, while relying upon the decision of the Delhi High Court in the case of CIT vs. AIMIL Ltd., it was held that the payment was made within the ‘due date’ for the purpose of sec. 36(1)(va) r/w 43B.

On further appeal, the High Court refused to persuaded in framing any question of law as urged by the Revenue.

Having heared the parties, the Apex Court condoned the delay and the directed to issue the notice.

2018-TIOL-669-HC-ALL-IT

CIT Vs ELDECO CONSTRUCTION PVT LTD : ALLAHABAD HIGH COURT (Dated: March 5, 2018 )

Income Tax - Section 37.

Keywords - Liaisoning fee.

The assessee Company is engaged in Real Estate business. In the relevant year the assessee paid a sum of Rs.12 lacs to Smt. Asha Peterson, who was the Director of the Company. The doubt raised by the AO was that no details and evidence were given with regard to the work done by her. Hence he made a disallowance of this fee. However, upon examination of the entire record and the CIT's order as well as the Tribunal's order, it appeared that she was doing the work of promotion for selling flats and for this purpose she had been paid. The amount paid to her was named as 'liaisoning fee'.

After hearing parties, the High Court held that,

Whether expenses under the head liaison fee paid to the Director for assisiting in selling flats is not allowable even if the Director discloses such income in the return and pays tax on it - YES: HC

++ the only reason for disallowance was that in the previous year they have not made any such claim. However, each year stands on its own footing and showed the expenditure and income. The amount which was earned by the Director Asha Peterson was disclosed and declared by her in her income tax return and was paid tax on it. The Tribunal also recorded a finding of fact that the business of the assessee was of selling flats and flats had been booked in that year and had been sold and her services had been used for selling of those flats. In view of the finding of the fact recorded by the Tribunal it cannot be said that any part of provision of Section 37(1) of the Act were contravened. Therefore, it was decided to upheld the finding and reasoning adopted by the Tribunal.

Revenue's appeal dismissed

2018-TIOL-668-HC-MUM-CX

CST Vs RELIANCE COMMUNICATION INFRASTRUCTURE LTD: BOMBAY HIGH COURT (Dated: April 2, 2018)

CX - Impugned order left unanswered the important issue of limitation - In other words, since the demand is sustainable on merits, it has been answered in favour of Revenue and against the assessee - Tribunal should answer that issue and it should not leave the same to be decided by this Court - Only on whether the demand is wholly sustainable or it is time barred, given the language of Section 11A(1)of the Central Excise Act, 1944, the matter is sent back to the Tribunal: HC

Matter remanded

2018-TIOL-667-HC-MUM-CX

CCE & ST Vs RELIANCE INDUSTRIES LTD: BOMBAY HIGH COURT (Dated: April 2, 2018).

CX - The issue involved in this case is regarding the utilisation of Cenvat Credit for discharge of service tax liability on GTA Service during the period April, 2007 to March 2008 - It is contended before that the period in the present case is April 2007 to March 2008 - Secondly, the judgment of Larger Bench of Tribunal, referred in impugned order, concerns a prior period, namely, 1st January, 2005 to 31st March, 2006 - Finally, Tribunal could have examined the matter in the light of the fact that there is no judgment of jurisdictional High Court and/or otherwise - It is only in absence of a view taken by either Supreme Court of India or the jurisdictional High Court that the Tribunal could have followed the view taken by the other High Courts - In paragraph 5, it has not been held that, besides the High Court of Gujarat, any view has been taken by jurisdictional High Court - In the circumstances, and because the order is cryptic, court is constrained to quash and set aside the same - The Appeal shall now be re-heard by Tribunal on its own merits and in accordance with law, totally uninfluenced by any earlier conclusions: HC

Matter remanded

2018-TIOL-666-HC-KAR-CX

ACER INDIA PVT LTD Vs UoI: KARNATAKA HIGH COURT (Dated: March 20, 2018)

Terminal Excise Duty [TED] - Petitioner has challenged the communication dated 31.3.2016 issued by the Deputy Director General of Foreign Trade, New Delhi inter alia seeking for declaration that petitioner is eligible for refund of the TED paid in respect of goods supplied to Export Oriented Units [EOU] during the period from June 2009 to October 2009 in terms of para 8.3 of the Foreign Trade Policy 2009-14 [FTP] :

HELD - the petitioner supplied goods to the EOU at the relevant time, its entitlement would be as defined in terms of the then existing Policy i.e. refund in terms of para 8.2 to 8.5 of the Policy - any subsequent amendment made to the existing policy liberalizing the Scheme and exempting payment of TED cannot be a reason to deny the refund of payment already made by the petitioner - this reason is fortified by the Division Bench Judgment of the Calcutta High Court in the case of IFGL Refractors Ltd. [2001 (132) ELT 545 (Cal)] and Division Bench Judgment of Delhi High Court in Kandoi Metal Powders Mfg. Co. Pvt. Ltd. - 2014-TIOL-230-HC-DEL-EXIM, wherein it is held that once the supply of goods fall within the category of deemed export, the unit would be entitled to refund of TED - High Court of Madras [Lenovo India Pvt. Ltd. - 2016-TIOL-2833-HC-MAD-CX has also taken a similar view whereby the Authorities are directed to process the refund claim in accordance with the 2009 Policy - this Court finds it difficult to concur with the view of the Bombay High Court [Sandoz Private Limited - 2016-TIOL-1753-HC-MUM-CUS that the policy circular dated 15.3.2013 is merely clarificatory and the DGFT had the power to interpret and implement the Policy, in view of the amendment to the FTP - amendment to the FTP indicates liberalization of Policy and the same shall be prospective in nature - petition is allowed - communication dated 31.03.2016 issued by the Deputy Director of Foreign Trade, New Delhi is quashed - the respondent no.3 shall consider the refund claim of the petitioner in accordance with 2009 Policy and pass appropriate orders in accordance with the law in an expedite manner : HIGH COURT [para 7, 8, 9]

Writ Petition allowed

2018-TIOL-532-ITAT-CHD + Story

ITO Vs CHANDIGARH LAWN TENNIS ASSOCIATION: CHANDIGARH ITAT (Dated: April 6, 2018)

Income Tax - Section 11.

Keywords: Exemption claim - Outstanding demand - Stay order.

The Assessee, a tennis association of Chandigarh, filed return for the relevant AY claiming exemption u/s 11 of the Act. However, the AO rejected the exemption claim of the Assessee and issue demand for tax. On Assessee's appeal, the CIT(A) upheld the decision of the AO. In the meantime, the AO made request to the Assessee to make the payment of outstanding demand. However, the Assessee informed that it had filed an appeal against the order of the CIT(A) along with an application for stay of demand before the Tribunal.

However, in the absence of any documentary evidence like the Stay order, the bank account of the Assessee was attached and the outstanding demand was recovered. Thereafter, the Tribunal granted exparte stay against the recovery of the demand till the disposal of the appeal. Thereafter, main appeal along with Stay Application came for hearing before the Tribunal, upon which final arguments were heard and the case had been reserved for orders and no separate arguments on the stay application had been addressed by either of the parties fully knowing that the said application would become infructuous on the disposal of the appeal.

On hearing the parties, the Tribunal held that,

Whether separate application by Revenue against stay granted by Tribunal, only to show resentment and displeasure, when main appeal is already decided, is not sustainable - YES: ITAT

Whether such behaviour of Revenue warrants imposition of cost - YES: ITAT

++ on each and every date of hearing, fresh orders for maintaining status quo were passed. In view of this, since the period of operation of the orders has already passed, the Tribunal will be astonished to know how the vacation of the stay order dated 15.2.2017 and 28.4.2017 the period of operation of which was upto 4.5.2017 and 22.5.2017 respectively, at this stage, will in any manner of any help to the department. The vacation of order dated 15.2.2017 or of 28.4.2017 at this stage will not absolve the concerned officer/s of their act of violation of order during the subsistence of the order;

++ the assessing officer in her application for condonation of delay with covering letter dated 20.2.2018 has referred to various dates of hearings stating that she was waiting for the disposal of the Misc. Application filed by the assessee against violation of the order dated 15.2.2017. This shows that the concerned ITO (E) was aware of the subsequent orders of stay/status quo, then why the application for vacation of two orders only has been filed is not understandable. The department officials fully knowing that no useful purpose will be served either by moving the present application and even knowing that the present application was infructuous and non-maintainableeven on the date of its filing, not only filed this application, but also insisted for arguments despite that the hearing on the main appeal had already been concluded on a previous date. The only motive behind this application is to confront and show resentment and displeasure to this Tribunal for granting interim stay against recovery in this matter;

++ the wording of the opening part of the application for vacation of stay clearly reveals that the Department is showing her resentment not only about the passing of ex-parte interim stay order but also towards the directions of the Tribunal for directing her to refund the amount illegally recovered. The Department, in case it is aggrieved of any order passed by the Tribunal, instead of approaching the higher forum, has now a days chosen the course of showing open defiance of, disrespect of or of open resentment to orders of the Tribunal, which may prove be very dangerous for the sanctity of the courts of law/Justice dispensation system of the country. Such observations are in view of the some other cases also where the Department has either violated the Stay orders or come with applications for vacation of stay orders despite the fact the representatives of the Department itself making requests for adjournments. When being asked, the only explanation comes that as 31st March is approaching, they have to achieve their targets of the tax collection. The Tribunal would also like to caution the concerned officers that this type of conduct of open resentment against the judicial orders may also compel us to initiate and recommend to the High Court for appropriate action under the contempt of courts Act;

++ the department has chosen to file and contest the preset application fully knowing that the same is frivolous, infructuous, not maintainable and in fact redundant with the only motive to openly show resentment against the passing of stay orders by the Tribunal, instead of challenging the same before the higher judicial authorities. This application is therefore dismissed with costs of Rs. 20,000/- to be deposited in Prime Minister's Relief fund within 15 days of receipt of the copy of this order.

Revenue's application dismissed

2018-TIOL-1164-CESTAT-MUM + Story

SWAPNE NAGARI HOLIDAY RESORT Vs CCE: MUMBAI CESTAT (Dated: March 21, 2018)

ST - Deeming fiction provided u/s 65(105)(zzzz) of FA, 1994 - Scope of said section/clause is restricted only in those cases when the same property is used partly for residence and partly for use of business or commerce - Appellant running a resort and structures/locations in precincts thereof are given on hire for film/video shooting - letting out the cottage/rooms and collecting rent cannot be covered under the category of ‘Renting of Immovable Property service' which is an altogether different service - SCN demanding service tax under ‘Business Support Service' whereas in adjudication demand confirmed under 'Renting of Immovable Property Service' - as demand made beyond SCN, same cannot be sustained - Impugned order set aside and appeal allowed with consequential relief: CESTAT [para 4]

Appeal allowed