LEGAL DIGEST
>Companies can'tbuy Dalitland
The Supreme Court last week ruled that land belonging to scheduled
castes (SCs) or tribes (STs) cannot be bought by companies and
non-Dalits and such transactions are illegal. The Rajasthan High Court
had held all along that such sale to a company or body corporate was
legal as they were not humans but 'juristic persons'. On the appeal of
the state government, the Supreme Court reversed that view and held
that the purchase of SC land by a company, Aanjaney Organic Herbal Pvt
Ltd, was not valid. It upheld the refusal by the state authorities to
recognise or grant mutation to the purchase of a plot by the company
from a person belonging to SC. Section 42 (b) of the Rajasthan Tenancy
Act barring such transactions is a "beneficial legislation which takes
special care to protect the interest of the members of SC/ST," the
judgment said and explained that the provision is a safeguard against
the exploitation of the SC/ST.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Contingency deposittaxable
The Supreme Court has dismissed a tax appeal of Sundaram Finance Ltd,
a non-banking finance company engaged in the business of hire,
purchase, equipment leasing and allied activities. It has been
collecting certain sums as 'contingency deposit' from leasing/hire
purchase customers to protect itself from sales tax liability. These
amounts were collected on ad hoc basis. It did not pay tax on it on
the ground that such sums were collected as contingent deposits. It
argued that the collection was in anticipation of sales tax liability,
which was disputed. The tribunal held it was income. On appeal, the
Supreme Court affirmed the decision, and said that the amount
collected was part of the turnover and tax should be paid.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Intereston delayed taxrefund
A bench headed by the Chief Justice of India has referred an important
question in income tax law to a larger bench as an earlier judgment
was felt to be incorrect. The question, formulated in the case, CIT vs
Gujarat Flouro Chemicals, is whether interest is payable by the
revenue department to the assessee if the aggregate of instalments of
Advance Tax/TDS paid exceeds the assessed tax. This controversy arises
in a number of cases pending before the court, the order said. The
company relied on a 2006 case called Sandvik Asia Ltd vs CIT in which
interest was ordered to be paid for 17 years' delay. The present order
cast doubts on the correctness of that decision. It maintains that
"Section 214 of the Act does not provide for payment of compensation
by the Revenue to the assessee in whose favour a refund order has been
passed." >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Principal employerto pay PF
The Delhi High Court last week dismissed the appeal of MMTC Ltd and
accepted the view of the Regional Provident Fund Commissioner that the
employees of the transporter were those of MMTC for purposes of
provident fund. MMTC had contended that its transporter was carrying
his own business and without the transporter being held a contractor,
persons engaged by him will not fall within the definition of the
employee in the PF Act. It was a business deal and an agreement which
has been entered into between them and followed by other persons from
time to time and the workers of the third party could not be held to
be the workers of MMTC, it was argued. The high court stated that
there was ample evidence to show that the same employees continued
with different handling agents/contractors. Therefore the authorities
rightly held that MMTC was the principal employer and it was bound to
deposit PF contributions in respect of the workers of the contractors.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Honchos saved by unsigned cheque
The Madras High Court last week acquitted the managing director and
joint director of a company accused of sending a bouncer cheque
because it did not carry the signatures of both the authorised
persons. On a complaint under Sections 138 and 141 of the Negotiable
Instruments Act, the trial court had sentenced both of them to jail
for one year. Their wives and brothers who were directors of the
company were also sentenced the same way. On appeal, the sessions
court limited the conviction to the company and the top two
executives. On further appeal, the high court acquitted all of them
because of the defect in the cheque, which was not noticed by the
courts below. The judgment in the case, Kavikumar Spinning Mills vs
Saravana Traders, said that the cheque was signed only by one of the
authorised persons, and therefore it was neither a bill of exchange
nor a valid cheque.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Injunction on use of trade name
A division bench of the Delhi High Court last week dismissed the
appeal filed by the Morgardshammar India Ltd (MIL) challenging a
decree passed by a single judge permanently restraining MIL from using
the trade mark, trade name and corporate name 'Morgardshammar'. The
suit was filed by Morgardshammar AB, a subsidiary of the Danieli Group
of Italy in 2010 after it learnt of changes in the shareholding
pattern in MIL.
MJ ANTONY
THINKSTOCK
Centre plans powerdebtrecast butstates yetto make up mind
JYOTI MUKUL& SANJAYJOG
New Delhi/Mumbai, 23 September
The Union government may be planning to kick-start the next tranche of
reform measures by announcing a financial restructuring scheme for
power distributors this week, but all states are not enthused. Madhya
Pradesh has already successfully restructured the debt of distribution
companies. Haryana, expected to avail itself of the central scheme, is
yet to discuss it with distribution companies.
The Cabinet Committee on Economic Affairs (CCEA) is likely to approve
the package this week. To begin with, Rajasthan, Tamil Nadu, Haryana
and Uttar Pradesh are on the list of beneficiaries. To be part of the
exercise, states will need to conform to mandatory conditions such as
annual hikes in power tariffs, conversion of loans into equity and
bringing in private participation. As an incentive, the Centre will
provide them a transitional finance mechanism.
The restructuring scheme worked out after a year of deliberations is
being looked at as the next big step in dealing with the
~1.9lakh-crore consolidated debt of government-controlled distribution
companies. Some of the conditions could be politically difficult to
implement. Also, states are worried about their inability to adhere to
Fiscal Responsibility and Budget Management (FRBM) limits, especially
when 50 per cent of the liabilities of distribution companies are to
be borne by them for acertain period.
Under the scheme, the state government would take over the liability
during the next two-five years by issuing special securities to
lenders in a phased manner till half of the short-term loans have been
taken over. The entire exercise would be within the FRBM targets,
which bind the states to reduce their borrowings to a certain
percentage of their gross domestic product.
States have expressed inability to continuously make budgetary
provisions to subsidise the widening gap between tariffs and the cost
of purchase of power. In some states, the tariff approved by the
electricity regulatory commissions is up to 60 per cent. The cost of
power purchase ranges 70-150 per cent.
Madhya Pradesh, which had accumulated ~11,491-crore losses in the
power distribution business and was earlier in the Centre's list of
states in need of such a package, recently closed its restructuring
scheme. "There is no short-term exposure of banks to distribution
companies in our state. We have a loan only from Power Finance
Corporation," said a senior official in MP Power Management Company,
the holding company of three distribution companies in Madhya Pradesh.
A senior official in the Union ministry of power said if states did
not restructure debt, banks and other financial institutions might
stop lending to them. Rajasthan, which had a debt of ~37,200 crore
till last year, found itself in a fix when banks refused to extend it
a loan recently.
Bihar is one of the states looking forward to the package. Ajay Nayak,
Bihar's principal secretary for the energy department, said they would
examine the scheme. A Maharashtra energy department official said the
Centre must differentiate better performance, especially with regard
to collection efficiency and distribution loss reduction. The state
has losses of around ~3,000 crore.
RV Shahi, former power secretary, who also worked for the
Reliance-controlled power distribution company, BSES, said it was the
responsibility of the state regulators to ensure the sector became
commercially sustainable.
Mandatory pvt participation, annual tariff hikes, conforming to FRBM
limits seen difficult TOUGH DEAL
|Financial restructuring scheme for power distributors coming up this
week as part of govt's reform drive |States not immediately keen to
come on board owing to tough mandatory conditions |Exercise to be
within FRBM targets, which bind states to reduce borrowings to a
certain percentage of their gross domestic product |States unable to
make budgetary provisions to subsidise widening gap between tariffs
and cost of purchase of power
--
.
-
CS A RENGARAJAN,, B.Com ,FCS, LLB, PGDBM
Company Secretary, Chennai
email csarengarajan@gmail.com
http://www.csarengarajan.blogspot.com
http://companysecretarytalent.blogspot.com/
http://companysecretarybenevolentfund.blogspot.com/
http://csvacancies.blogspot.com/
mobile 093810 11200
CS Benevolent Fund is a collective effort towards extending the much
needed financial support to the community of Company Secretaries in
times of distress Let us lend support and join for noble cause.
SHARING KNOWLEDGE SKY IS THE LIMIT
This mail and its attachments (if any) are confidential information
intended for persons to whom the email is planned for delivery by the
sender. If you have received this mail in error please notify the
sender of the error by forwarding the email and its attachments (if
any) and then deleting the mail received in error and the relevant
email trail in this connection without making any copies or taking any
prints.
------------------------------------
receive alert on mobile, subscribe to SMS Channel named "aaykarbhavan"
[COST FREE]
SEND "on aaykarbhavan" TO 9870807070 FROM YOUR MOBILE.
To receive the mails from this group send message to aaykarbhavan-subscribe@yahoogroups.comYahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/aaykarbhavan/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/aaykarbhavan/join
(Yahoo! ID required)
<*> To change settings via email:
aaykarbhavan-digest@yahoogroups.com
aaykarbhavan-fullfeatured@yahoogroups.com
<*> To unsubscribe from this group, send an email to:
aaykarbhavan-unsubscribe@yahoogroups.com
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
No comments:
Post a Comment