Archive for the ‘Apex Courts Judgements’ Category

Renting and service tax

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The plenary power of Parliament to legislate in determining relevance of service tax is subject to the Constitution.

 In Budget 2010, the Government used its Brahmastra and amended the Finance Act, 1994, levying service tax on renting of property. To ensure that the weapon was truly effective, the levy was made retrospective, with effect from June 1, 2007.

This measure was to counter the opinion — given twice — of the Delhi High Court, in Home Solution Retail, that the pure act of renting wouldn’t amount to a taxable service, since there is no value-addition involved.

It also sent signals to the Supreme Court, before whom a petition on that issue was pending, that the power of the Government to levy a tax under the Constitution is extremely wide. A bevy of petitions before the Mumbai High Court were disposed off recently, disagreeing with the opinion of the Delhi High Court.


In Retailers Association of India Vs Union of India and Ors, the Mumbai High Court reconsidered the constitutional validity of a service tax on rentals.

It noticed that the Supreme Court had an occasion to consider similar petitions in four landmark cases against the Union of India — Tamil Nadu Kalyana Mandapam, Gujarat Ambuja Cement, All India Federation of Tax Practitioners and Association of Leasing and Financial Services Companies. Considering a plethora of other Apex Court decisions, the Mumbai High Court held that the legislative basis that has been adopted by the Parliament in subjecting taxable services involved in the renting of property to the charge of service tax cannot be questioned.

The assumption by a legislative body, that an element of service is involved in the renting of immovable property is certainly not an assumption which can be regarded by the Court as being so manifestly perverse as to lead to an inference that the Parliament had treated as a service, an item which in no rational sense could be regarded as involving service.

But more significantly, even if the Court were to proceed on the basis, suggested by the petitioners, that no element of service is involved, that would not make the legislation beyond the legislative competence of Parliament.

As long as the legislation doesn’t trench upon a field which has been reserved to the State legislatures, the only conclusion that can be drawn is that the law must be treated as valid and within the purview of the field set apart for Parliament.

The petitioners were also irked by the retrospective application of the law. The Mumbai High Court was of the opinion that Parliament has the plenary power to enact legislation on the fields, which are set out in List I and List III of the Seventh Schedule.


The plenary power of Parliament to legislate can extend to enacting legislation both with prospective and with retrospective effect. That, however, is subject to the mandate of Article 14 of the Constitution, which states that the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.

The Mumbai High Court agreed with the decision of the Supreme Court held in Bakhtawar Trust Vs M. D. Narayan, wherein it was held that it is open to the legislature to alter the law retrospectively, provided the alteration is made in such a manner that it would be no more possible for the Court to arrive at the same verdict.


The decision of the Mumbai High Court follows the pattern of a host of High Courts, agreeing to disagree with the logic of the Delhi High Court in Home Solution Retail — the Punjab and Haryana High Court in Shubh Timb Steels, Orissa High Court in Utkal Builders and the Ahmedabad High Court in Cinemax India.

These decisions, along with the fact that renting of immovable property is not in the initial list of negative services, would be food for thought for the Supreme Court.

While all the developments post-Home India point to validating the levy, the Supreme Court could think of constitutional precedents and judicial cases to rule that the tax is applicable only from 2010 onwards, and not 2007.


(The author is a Bangalore-based chartered accountant.)



Judicial activism Of corrupt individuals, media trial and justice

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Supreme Court of India - Central Wing

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The recent past has witnessed a good measure of writs, orders and directions from the Supreme Court of India which could be termed classical examples of Judicial Activism, an expression used invariably to connote meaning when courts pronounce on matters which usually and in the ordinary course of things do not fall within their well defined areas of operation or jurisdiction. Legally the courts in these matters may not be lacking jurisdiction totally, but as a matter of practice which over a long period of time has hardened into an unwritten rule, the courts do not interfere in such matters as are best left to the discretion or powers of the Executive or Legislature.
There might have been instances of judicial activism in the country in the past but then the constitutional doctrine of separation of powers was never lost sight of. The Supreme Court of India while dealing with various matters and while giving new dimensions to the concept of rule of law and taking the concept of rule of law to higher legal heights had always refrained from making pronouncements on matters of public policy followed by the executive. Thus the often spoken about doctrine-of-separation of powers between the judiciary, executive and parliament was respected and clearly kept in mind.
Without going into finer details as to what could be termed as judicial activism or pure judicial functioning and not trying to lay down lines of distinction between the two, let us come straight way to the recent unusual decisions or directions of Supreme Court which have once again brought the debate to the fore. All this started when in the recent past Mr. Subramanium Swami approached the Supreme Court of India seeking directions on to CBI to probe in to the 2 G Scam. In his petition Mr. Swami maintained that he had written to the Prime Minister of India to grant sanction for the prosecution of Mr. Raja the then Telecom Minister but the Prime Minister did not grant the same, he further said that he had written to the Prime Minister in this connection in November, 2008. Till then no FIR was lodged in 2G Scam. One wonders as to how the Prime Minister could grant sanction to prosecute Mr. Raja merely on the petition of Mr. Swami. However, an FIR was lodged in 2G Scam in October, 2009 and the Supreme Court started to monitor investigation into the case. What followed is history.
The accused in 2G Scam where subjected to media trial on the one hand and on the other hand the Supreme Court of India while monitoring the investigation acted in a method and manner, that gave rise to many legal ponderables, for instance that one of the cardinal principles of criminal jurisprudence, ‘an accused is presumed to be innocent till his guilt is proved beyond doubt at the trial of the case’ was given a burial and an impression was created that whatever the investigating agency comes forthwith is the gospel truth and that as if the guilt of the accused was already proved, so much so that the concession of bail to the accused persons was also denied to them. Though the case even if proved, does not carry death penalty not even life imprisonment as punishment. In thousands of cases across the country which are heinous in nature and where the allegations are grave, but do not carry death penalty as punishment accused are enjoying the benefit of bail because in the legal system in this country bail and not jail is the rule, especially at the pre-trial stage. However, in the case under discussion again the cardinal principal of law relating to bail that (bail is not to be with held as a matter of punishment) was given a good bye. That the accused is presumed to be innocent and the presumption of innocence is in favour of the accused till proved guilty beyond any shadow of doubt and he has right to remain on bail as a presumable innocent person, all this and many other principles of criminal jurisprudence and criminal justice system received a burial.
Any one belonging to legal profession with even slight understanding of the criminal jurisprudence and criminal justice system, can safely say that in the heat and dust created by such cases as 2G Scam, the courts of the country have allowed the long respected cardinal principles of criminal justice system to become a causality and in fact have made these so.


A pertinent question stares one in his or her eye that as to what purpose of law and justice is served by keeping Kalanmozi in continued judicial custody, would she flee justice if she was allowed bail? Women are allowed bail even in cases which involve death penalty or life imprisonment as punishment. Kalanmozi is an ML P. and very well known person in her own rights and has very strong roots in society. Therefore, there is no reason in law to withhold her bail.
Another disturbing instance is Hassan Ali’s case, why is he still in jail, when the allegations against him are failing apart in spite of what the investigating agency had to publicize about him and in spite of very strong observations of the Supreme Court in his case. He was put to media trial much before his actual trial in a court of law would start and people were given to believe that Hassan Ali is involved in money laundering in a big way and that he is the king pin in the matter of stashing black money in foreign banks. He was publicized to be owing Rupees Seventy Two Thousands crores of income tax to the country by the investigating agency and in a rush perhaps the Supreme Court not only formed a S.I.T. to investigate the black money stashed in foreign banks but also at one point in time observed that why shouldn’t the government invoke terror laws against him. His bail was cancelled and he was jailed. His rights which the Constitution gives him were violated by the very judiciary which is supposed to protect tire fundamental rights of the citizens, which includes the accused persons also.
(The author is advocate J&K High Court)


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“As the examining bodies have not been exempted, and as the examination processes of examining bodies have not been exempted, the examining bodies will have to gear themselves to comply with the provisions of the RTI Act,” a Bench of Justices R V Raveendran and A K Patnaik said. The apex court made the observations while directing the Institute of Chartered Accountants of India (ICAI) to reveal “standard criteria” relating to moderation, employed by it, for the purpose of making revisions to a candidate.

“The RTI Act does not bar or prohibit the disclosure of question papers, model answers (solutions to questions) and instructions if any given to the examiners and moderators after the examination and after the evaluation of answerscripts is completed, as at that stage they will not harm the competitive position of any third party,” the court said.

No burden

The bench rejected the contention of ICAI that it would burden the examination body with extra work. “Additional workload is not a defence. If there are practical insurmountable difficulties, it is open to the examining bodies to bring them to the notice of the government for consideration so that any changes to the Act can be deliberated upon.”

“Examining bodies like ICAI should change their old mindsets and tune them to the new regime of disclosure of maximum information.

Public authorities should realise that in an era of transparency, previous practices of unwarranted secrecy have no longer a place. Accountability and prevention of corruption is possible only through transparency. Attaining transparency no doubt would involve additional work with reference to maintaining records and furnishing information,” the court said. The bench also noted that the Parliament has enacted the RTI Act providing access to information, after great debate and deliberations by the Civil Society, and in its wisdom, has chosen to exempt only certain categories of information from disclosure and certain organizations from the applicability of the Act.


Panel probing judges can probe more charges: Supreme court

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The Supreme Court Friday held that a committee set up under the Judges Inquiry Act can go beyond the charges contained in the notice of motion admitted in the Lok Sabha or Rajya Sabha and forwarded to the committee in pursuance of an impeachment motion against a judge.

’It will be naive to contend that the committee has no discretion in the matter of framing charges. Rather, the committee is duty bound to carefully scrutinise the material forming part of the notice of motion and then frame definite charges,’ said the bench of Justice G.S. Singhvi and Justice Chandramauli Kumar Prasad in their judgment.

Speaking for the bench, Justice Singhvi said: ‘We hold that the procedure adopted by the committee cannot be faulted on the ground that it made a preliminary inquiry before framing charges against the petitioner and relied upon the material received from various sources and recorded statement of some persons.’

The court said this while dismissing the petition by former chief justice of Sikkim High Court, P.D. Dinakaran (since resigned), challenging the judges inquiry committee headed by apex court judge Justice Aftab Alam holding preliminary inquiry and framing charges that were beyond those contained in the notice of motion.

Justice Dinakaran had also contested the committee’s action in seeking more information from the those who briefed the Rajya Sabha members before the motion of impeachment was initiated.

In the notice of motion sent to the Judgers Inquiry Committee, there were 12 charges which were increased to 14 by the probe committee headed by Justice Alam.

The committee, the judgment said, can also receive other material which may support or contradict the allegations enumerated in the notice of motion.

In an appropriate case, the committee can require any person including the one who may have supplied material to the members of the Lok Sabha or the Rajya Sabha, as the case may be, to give clarification on any particular point or make available authentic copies of the documents, the judgment read.

The committee can also call upon such person to file affidavit or make a statement and summon him at the stage of investigation so that the judge may get an opportunity to cross-examine him, the judgment added.



Indian Supreme Courts new norms:Law degree compulsory for legal correspondents

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The supreme court of india. Taken about 170 m ...

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Sabir shah in THE NEWS

If the widely anticipated new Indian Supreme Court reporting norms are enforced in true letter, the new ruling is likely to disqualify at least 80 per cent of the journalists covering the Apex Court proceedings in the world s biggest democracy.
According to Thursday s (August 25, 2011) web edition ( of India s Daily Mint, a business newspaper published by Hindustan Times Media (the publishers of The Hindustan Times) in collaboration with the prestigious American broadsheet Wall Street Journal, the recently promulgated Supreme Court s revised norms for accreditation of the legal correspondents in the Indian apex court makes a law degree mandatory for journalists covering the top court proceedings.

The website states: Issued by the court on Saturday, the norms require that permanent and temporary accredited print journalists have a professional law degree and at least seven years of experience. Electronic media reporters need, apart from the law degree, at least three-and-a-half-years of experience. The circular did not set a deadline for the norms to come into force. Court officials didn t throw light on when the circular would come into effect, when asked on Tuesday. The new norms follow instances in which faults were found in coverage. Two of these arose from coverage of the Vodafone tax dispute. Vodafone lawyer Harish Salve complained to the Supreme Court that a Press Trust of India (PTI) report on 10 August had misquoted him.

It further said: Salve had argued that Vodafone could avoid tax as tax avoidance was permissible under law. Indian income-tax authorities have alleged that Vodafone evaded tax by structuring its $11.2 billion transaction to buy out Hutchison s Indian cellular business through tax-saving routes. Salve spent more than a day demonstrating to the bench the difference between tax avoidance and evasion, and that his client had acted in accordance with the law. The court sought a response from PTI on an application made by Salve after the agency s report.

The reported: Chief Justice S.H. Kapadia s three-judge bench asked PTI to file a detailed affidavit explaining whether its reporter was present in the court at the time Salve made his argument. The court reportedly observed that norms for journalists needed to be revisited in light of the incident and what it said were other recent inaccurate reports. Previously, Kapadia had expressed displeasure at a 15 December news report in a national daily that said the judiciary wanted to retain one per cent of the Rs2,500 crore deposit made by Vodafone to the court s registry.

It further read: The report suggested that a cash-strapped judiciary was trying to source funds from novel methods such as these. Kapadia had then said: People write whatever they want. But the court did not initiate any action against the reporter or the newspaper. Different benches of the court have, in the past, pointed to inaccurate or sensational news reports. However, Mint could not immediately ascertain the immediate reasons for the revision of the norms.

It is noteworthy that it is for the first time in the Indian journalism and the judicial history that a law degree has been declared mandatory for all reporters covering the Apex Court proceedings, as till now, reporters without a law degree were entitled to get a temporary six-month pass and cover the court proceedings.

While Clause 6 of the rules deals with temporary accreditation for working journalists desiring to report regularly the Supreme Court proceedings, Clause 8 deals with temporary reporting facility for journalists who can access the court for a day/short duration or for a specific case.

Clause 10 says grant of accreditation will be the sole discretion of the Chief Justice of India and his decision in this regard shall be deemed final and binding on all.

Meanwhile, Clause 11 says that the accreditation, whether permanent or temporary, can be withdrawn, at any time, without assigning any reason.

The new requirement of the Indian Supreme Court has evoked mixed response from leading journalists and solicitors across the border.

The Bar and Bench News Network of India, a comprehensive news and analysis portal for the country s legal professionals, states in one of its recent editions: R. Jagannathan, Editor-in-Chief, Firstpost said: The requirement that Supreme Court proceedings can only be covered by people with a law degree defies common sense. If only chartered accountants can comment on company results, if only doctors can report on medicines and hospitals, all reporters would need to do another five years of specialised courses – which is a waste.

The portal of the Indian legal professionals, further quotes R. Jagannathan as saying: You do an MBBS to become a doctor, not to write about medicine. Restricting court reporting to law degree holders would mean restricting the profession to a closed cabal of law insiders. The law expert can also miss the obvious – since ultimately court decisions need to pass the common sense test, which requires no law degree. If the reasoning behind this new requirement is that reporters sometimes misrepresent what the court says or rules, maybe the Supreme Court should mandate a short, one-day course for court reporters which focuses on the do s and don ts or court reporting. A law degree is a waste of everybody s time.

The portal maintained: Speaking to Indian Express former Chief Justice of India V N Khare said: This is not fair. When on one side you are talking of transparency…why is even a law degree necessary? You, as a correspondent, are not going to the SC to argue a case but to report. Journalism is a profession by itself. So when you report a matter concerning engineering, do you as a reporter need to have an engineering degree? So how many degrees do you need?

It quoted P. George Giri, Advocate-on-Record in Supreme Court, as viewing: It is a good move on the part of the Supreme Court of India. Prevention is better than cure. The norms introduced by the Supreme Court are only a reasonable restriction on the press freedom. Otherwise, there is every possibility to spread unwanted news by the media; by the reports of the young and energetic journalists, without properly understanding the court procedures.

The Bar and Bench News Network of India also quoted Rohit Panikker, correspondent with the Times of India, as asserting: It s important that every journalist knows in depth about what he is reporting; and ideally, a law background enables them to give the story a better perspective over straight reportage. But then, that also brings forward the question of what would happen to those journalists who have built their reputation over the years in reporting SC proceedings without having a law degree. If that s the case, does a film reporter require a filmmaking degree to go about his work?

Supreme Court for free treatment of poor at private hospitals

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In a significant directive, the Supreme Court of India yesterday directed the private hospitals in Delhi to allocate 25% of their out-patient department capacity and 10% in patient department capacity for free treatment of poor and the needy.

It also asked the Delhi government to come up with a workable scheme for the 27 city private hospitals to provide free treatment to poor patients which they are obliged to in exchange for getting land at concessional rates. Mentionable that, under this scheme the private hospitals are to provide free treatment to patients from weaker sections at 10 percent of the hospital bed-strength.

The apex court bench of Justice R.V. Raveendran and Justice A.K. Patnaik issued the direction when Delhi government’s claim that 27 private hospitals were providing complete treatment to poor patients was disputed by Dharamshila Cancer hospital. The court also asked the Delhi government not to delay in implementing a scheme in this regard and also to appoint a nodal officer who would direct the poor patients to private hospitals for free treatment.

This directive has come as welcome news to the poor and the needy. Although the margin of only 10% bed strength free treatment to the poor can be contested as too low, this can be considered as first step. The social activists and different NGOs working for the poorer sections of the society have welcomed the decision.

Written by THE LAWFILE

August 28, 2011 at 3:51 pm

Horoscope weak proof of birthdate, rules Supreme Court

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The Supreme Court has held a horoscope to be a very weak piece of material to prove age of a person and the “heavy onus lies” on the person to prove the authenticity of the horoscope he is relying upon to prove a new date of birth.

“There must be strong, cogent and reliable evidence in support of the contention that the date of birth entered in the service records or in the SSLC (secondary school leaving certificate) was wrongly entered by a mistake,” said the Supreme court bench of Justice Mukundakam Sharma and Justice Anil R. Dave in a recent judgment.

Speaking for the bench, Justice Sharma said there could not be any bar to examine the authenticity and evidentiary value of the document for change of date of birth, which was being relied upon by a person to get an advantage which he may not be otherwise entitled to.

The Supreme court’s ruling came while upholding an appeal by the Registrar General, Madras High Court challenging the high court order upholding the claim of District Munsif-cum-Judicial Magistrate, M. Manickam that his actual date of birth is Nov 24, 1950, whereas it is wrongly entered in his service book as March 19, 1947. Manickam primarily relied on his family horoscope book to support his claim.

Manickam had contended that that due to the wrong entry of his date of birth in the service records, he would retire from the service 3 years, 8 months and 5 days before his actual date of superannuation.

He had joined the State Subordinate Judicial Service as district judicial magistrate on Nov 4, 1988, after qualifying in the Tamil Nadu Public Service Commission.

“We are of a firm opinion that respondent No.1 (Manickam) has failed to discharge his onus in proving the authenticity of the aforesaid horoscope on which reliance is placed,” the judgment said.

Setting aside the Madras High Court verdict, the judgment said the Supreme court has time and again cautioned civil courts and high courts against entertaining and accepting the claim made by the employees for correction of the recorded date of birth, long after entering into service.

Refuting Manickam’s claim that the horoscopes being produced in support of his later date of birth was contained in the note book that had the horoscopes of the family being maintained since 1939, the judgment observed that the said note book was distributed and published from Trichy-2. The court said that Trichy-2 pointed to postal zones which were not in existence before Independence.

The judgment also rejected the modified date of birth on the school leaving certificate saying it was not authenticated by the person who made the changes by hand.

That medical certificate to prove revised date of birth appears to have been got prepared for the purpose of adducing evidence at the time of hearing of the suit and not before, the judgment said.

“The document is also found to be unrealistic and unreliable. Considering the facts and circumstances of the case, it is very difficult to place any reliance on the authenticity and validity of the said age proof certificate,” the judgment said.