Jurisprudentiol– Tuesday's cases

By Vijay Kumar

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Justice Hurried is Justice Buried: While justice delayed may amount to justice denied, justice hurried may in some cases amount to justice buried. Supreme Court

Procedural law so dominates in certain systems as to overpower substantive rights and substantial justice - No person has a vested right in any course of procedure. He has only the right of prosecution or defence – In an adversarial system, no party should ordinarily be denied the opportunity of participating in the process of justice dispensation. Unless compelled by express and specific language of the statute, the provisions of CPC or any other procedural enactment ought not to be construed in a manner which would leave the court helpless to meet extraordinary situations in the ends of justice.

Central Excise

Goods manufactured by a 100% EOU out of raw-materials received from another 100% EOU and cleared to DTA – whether eligible for benefit of exemption under Notification No. 8/97-CE, 23/2003-CE – Matter referred to Larger Bench.

The respondents had cleared goods such as readymade garments, rejects and waste on payment of Central Excise duty. The clearances were made after obtaining permission of the Development Commissioner. The department took a stand that respondents were required to discharge duty in terms of notification No.2 /95 CE, dt . 04.01.95 which exempts all goods produced or manufactured by 100% EOU and allowed to be sold in India as per Para 9.9 and 9.20 of Exim policy in excess of the duty calculated at the rate of 50% of each of the duties of customs. Thus the department required the respondents to pay differential duty of Rs.2 ,10,536 /-.

Income Tax

A transaction of loan can be without interest and a transaction of loan implies an agreement to repay the money – such loan cannot be added to income – ITAT

A transaction of loan can be without interest and a transaction of loan implies an agreement to repay the money – such loan cannot be added to income: the orders of Revenue Authorities appear to be passed on assumptions and presumptions and, particularly, when apparently, there exist no provision in the section 56(2 )( v) to treat loans, which may not be repaid, as income of the assessee. Several commercial considerations prevail in the business world for entering into business transactions of various types and if the Revenue Authorities tax such transactions in this manner, then, the conduct of business would become impossible. It is also pertinent, to mention here that '0'% interest loan or interest free loan have been institutionalized where the manufacturing, companies or marketing companies compensate the financing companies who give money to the customers interest free to buy the products and these types of loan result into a vibrant economy benefiting all concerned and if the view taken by the Revenue Authorities is accepted then, all such transactions can be taxed as-income, u/s. 56(2)(v) of the Act which cannot be the intention of the legislature.

See our columns tomorrow for the judgements