Jurisprudentiol – Wednesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Service Tax

Service Tax on Charter of Aircrafts - Board Instructions Challenged – No Coercive steps before adjudication - validity of circular is kept open: HC

FACTUAL matrix in each case has to be examined. High Court cannot examine and decide the issue in a vacuum. Adjudication should take place first and till the adjudication is made, no coercive steps shall be taken against the members of the petitioner-association. In case members of the petitioner-association are aggrieved by any kind of adjudication, they can challenge the same before the appropriate forum in accordance with law. The issue pertaining to the validity of the circular is kept open.

Income Tax

Whether when assessee enters into restrictive covenant not to use own trademark but allowed to manufacture and sell products, payment received for loss of income source is to be treated as revenue receipt - NO, rules Madras HC

ASSESSEE is a company carrying on business in manufacturing mosquito repellents and selling it in the name and style of 'Banish Mats', a patent owned by its sister concern. It had an agreement with M/s Bayer India Limited for manufacture and sale of insecticides, including household insecticides at an agreed price. Upto the year 1995-96, the assessee was selling its products manufactured under its trademark, apart from the agreement with Bayer India Limited to manufacture and sell mats under contract basis.

Foreign Trade policy

DEPB Rates - Reduction in DEPB rates - Only prospective - beneficial circular has to be applied retrospectively while oppressive circular has to be applied prospectively- promissory estoppel is principally evolved on equity and to avoid injustice: HC

WHEN a Government makes a promise intending or intended that it would be acted upon by the promisee and the promisee acts by relying upon the promise and alters his position, the Government should be held to be bound by the promise and the promise would be enforceable notwithstanding that there was no consideration and no formal contract was executed. However, the said doctrine is based on equity and when over-riding equity in form of “public interest” requires that the plea of promissory estoppel should not be applied, the Courts would not issue a writ.

See our columns Tomorrow for the judgements