Monday, August 17, 2015

[aaykarbhavan] Judgments and Infomration [3 Attachments]





No jurisdiction with Official Liquidator to ascertain Financial Corporation's claim, dismisses appeal

SC dismisses defaulter co's appeal, upholds HC Division Bench order confirming sale of co's mortgaged-assets by its secured creditors- State Financial Corporations ('respondent corporations'), pursuant to power of sale conferred to them by Section 29 of State Financial Corporations Act, 1959 ('SFC Act'); Rejects HC Single Judge observation that respondent corporations had to prove their claim before sale of assets to Official Liquidator ('OL'); Holds that OL has no jurisdiction to ascertain or adjudicate secured creditor's claim who has been permitted by Company Judge to stand outside liquidation proceeding with liberty to pursue statutory remedy under SFC Act; On appellant's contention that OL had to first quantify workmen's dues u/s 529A of Companies Act, 1956, holds that such provision does "impede statutory powers available to a secured creditor like SFCs.. but the impediment is indeed of a limited nature; its specific purpose being to protect the pari passu charge of the workmen's dues. After ensuring that this purpose is achieved or ensured, the State Financial Corporations can continue to enjoy their statutory rights as secured creditors"; Relies on SC ruling in A.P. State Financial Corporation v. OL, International Coach Builders Ltd. v. Karnataka State Financial Corpn. and Rajasthan State Financial Corpn. v. Official Liquidator and holds that OL can initiate appropriate civil proceedings to challenge claim/debt of a State financial corporationand "not to assume jurisdiction to sit in adjudication and decide entitlement of the financial corporation":SC


Apex court stays levy of Service Tax on lawyers for unconstitutionality

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The apex court has issued a stay against  an order  of the Hon'ble High Court of Bombay, dated 15.12.2014, in the matter of PC Joshi Vs. Union of India.  The petition before the High Court of Bombay had challenged the levy of service tax on lawyers.
The petitioner, before the High Court of Bombay,  raised the issue that there should be no levy of service tax on services provided by the advocates as stated in Section 65 of the Finance Act, 1994, which is violative of the constitutional provision of providing justice to all. The case was initially pending and finally an order was passed by the Hon'ble High Court on 15th December, 2014, dismissing Advocate P C Joshi's petition.
Section 65 (105) of the Finance Act, 1994: Levy of Service Tax
Rendering Services
(zzzzm) (i) to any person, by a business entity, in relation to advice, consultancy or assistance in any branch of law, in any manner;
(ii) to any business entity, by any person, in relation to representational services before any court, tribunal or authority;
(iii)to any business entity, by an arbitral tribunal, in respect of arbitration. Explanation:- For the purposes of this item, the expressions "arbitration" and "arbitral tribunal" shall have the meanings respectively assigned to them in the Arbitration and Conciliation Act, 1996 (26 of 1996);]
Eventually the impugned order was challenged by the Bombay Bar Association before the Supreme Court, who by virtue of Article 136 of the Constitution of India, took up the matter for hearing.
The petition stated that the imposition of the tax is oppressive, unjust, unreasonable and ultra vires (beyond legal authority) of the right to equality and freedom to carry on a trade or profession and  thus,  unconstitutional in nature. It argued that the relationship between a client and lawyer must not be seen as that of a service provider and a client as the lawyer is merely a representative of his client.
However, on such grounds of representation being made, the Supreme Court finally on 10th August, 2015 stayed the Bombay High Court order dismissing  the petition challenging  the levy of service tax on lawyers and the matter is listed for further court proceedings.
Please click on the below link to read the Bombay High Court Judgement.


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Posted by: Dipak Shah <djshah1944@yahoo.com>


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