Jurisprudentiol – Friday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Merely because assessee, maybe, by mistake pays duty on exempted goods, does not mean that goods would become goods liable for duty under Act: SC

THE sum and substance of the reasoning of the Tribunal appears to be that merely because the assessee has paid the excess duty on those items which he was not supposed to pay in view of the exemption notification dated 1.3.1988 and merely because the assessee has not claimed the refund of the excess duty paid, that amount paid by him under the Notification dated 1.3.1988 requires to be taken for the purpose of computing the aggregate value of the clearances under the notification No.175/86-CE. Merely because the assessee, maybe, by mistake pays duty on the goods which are exempted from such payment, does not mean that the goods would become goods liable for duty under the Act.

Income Tax

Whether when bank purchases non-convertible debentures at discount and there is actual delivery, loss resulting from such transactions is speculative loss u/s 43(5) and not capital loss - NO, it's capital loss: Madras HC

THE erstwhile company viz., M/s New Ambadi Investments Private Limited, was merged with M/s New Ambadi Estates Private Limited with effect from 01.04.2006. The said erstwhile company was a private limited company carrying on the business of investments and the relevant assessment year is 1993-1994. For the said assessment year, the assessee filed its return of income on 31.12.1993 admitting the loss of Rs.10,08,121/-. The said return was processed under Section 143(1)(a) of the Income Tax Act on 22.07.1994 and later taken up for scrutiny and notice was issued under Section 143(2) of the Act and the assessment was completed under Section 143(3) of the Act and determined the total taxable income at 1,36,570/-. While computing the taxable income, the assessing officer rejected the contention that the loss at Rs.11,44,692/- claimed by the assessee as capital loss and held that it was only speculative loss under Section 43(5) of the Act and the same cannot be set off against capital gain.

Customs

Prosecution - Petitions under Section 482 Cr. P.C. for quashing of Complaint - Powers possessed by High Court under Section 482 of Code are very wide and exercise of inherent powers to quash proceedings is called for only in a case where complaint does not disclose any offence or is frivolous, vexatious or oppressive: HC

IT is trite that when a party approaches High Court for quashing of complaint and summoning order, it is not required to embark upon the sifting of the entire evidence and judge whether the accused is guilty or not. Only consideration at that stage before this Court should be whether there is prima facie indication of involvement of the accused in the case alleged or not.

The role of the petitioners as alleged in the complaint was that apart from preparing belated Bills of Lading, they did not mention the date of taking charge of the goods on the Bills of Lading prepared by them. In some cases, the Bills of Lading have been shown issued three/four months after the date of shipment so as to make the documents negotiable in the Bank under Article 23(ii) and Article 24(ii) of ICC Uniform Customs and Practice for Documentary Credits. Thus, it is alleged that the petitioners have actively connived with M/s Lindt. Exports and M/s High Tech Engineers in manipulating the export date on the documents and getting them negotiated in the Bank, which would have otherwise not been entertained by the Bank. The actions of the petitioners enabled M/s Lindt. Exports and M/s High Tech to negotiate the documents for remittances and claim drawback deceitfully.

See our columns Tomorrow for the judgements