1. Advocate – Duty of Advocate – Bring to the notice of the Tribunal, any pendency of appeal filed in the Supreme Court and other material facts – Non-disclosure leads to obtainment of the Tribunal’s order by fraud – Void-ab-initio.[Central Excise Act, 1944, Section 35C(2)]
Dewsoft Overseas (P) Ltd. vs. Commissioner of Service Tax, New Delhi 2016 (341) E.L.T. 321 (Tri – Del.)
As per facts on record, the dispute related to classification of the services provided by the appellant. The Tribunal vide its Final Order, by adopting the Larger Bench decision in the case of Great Lakes Institute of Management Ltd., rejected the appeal on merits. Thereafter, the said order of the Tribunal was appealed against by the appellant before the Hon’ble Supreme Court, who vide their order, granted leave to appeal in the matter. It is seen that the Hon’ble Supreme Court was also pleased to grant stay of recovery of penalty, subject to the appellants depositing the service tax along with interest within a period of two months.
Prior to the filing of appeal before the Hon’ble Supreme Court, the appellant had also moved an application for rectification of mistake before the Tribunal in terms of section 35C(2) of the Central Excise Act, 1944 on the ground that the Tribunal disposed of the appeal only on merits and did not consider the plea of limitation raised before it. It was contended that the non-consideration of limitation issue amounted to mistake on the part of the Tribunal, thus requiring rectification. The fact of filing of application for rectification before the Tribunal was also disclosed before the Hon’ble Supreme Court in the memo of appeal filed before the Hon’ble Apex Court.
The Assessee failed to bring to the notice of the Tribunal during the course of proceedings of the Miscellaneous Application, about the pendency of the appeal filed by the Assessee in the Apex Court. The Assessee had also failed to produce the material fact about the payment of service tax done on the directions of the Apex Court.
The Revenue’s case is limited to the point that the order of the Tribunal was obtained by fraud since the material facts were not disclosed before the Tribunal by the Assessee, even after being aware of the same, since the same law firm was handling the matter in appeal before the Supreme Court.
It was held by the Apex Court that the Advocate was under legal duty to bring to the notice of the Bench, at the time of disposal of Miscellaneous application, the above factual developments irrespective of the fact as to whether the Tribunal in that case would have decided or not decided the Miscellaneous application. It is a well-settled principle that one who comes to the Court seeking justice must come with clean hands. The fraud vitiates everything and the fact of non-disclosure of the order of the Hon’ble Supreme Court has the effect of making the order in Miscellaneous Application void ab initio.
Intentionally or unintentionally, the fact remains that the Bench was not appraised of the order of the Hon’ble Supreme Court. Non-disclosure of the relevant facts and obtaining of a favourable order by not bringing the relevant facts to the notice of the Bench abuses the due process of law and vitiates the very order so obtained. As such, the Court deemed it fit to recall the order passed.
2. Document – Memorandum of Partition – Creating or affecting the rights of any party – Required to be mandatorily registered – If unregistered – Inadmissible as evidence [Contract Act 1872, Section 8; Registration Act 1908, Section 17; Stamp Act 1899, Section 35]
Bhanwari Devi vs. Arvind Kumar and Ors. AIR 2016 RAJASTHAN 198 (Jaipur Bench)
Brief facts stated that a suit was filed by the petitioner for possession of the property on the ground that a property along with other properties came into the possession of the petitioner’s father-in-law, as a result of a family settlement between her father-in-law and the father-in-law’s son.
However, it was contested by the defendant-respondent that the document in question cannot be presented as evidence as it was not registered and no stamp duty had been paid.
The question to be resolved by the Hon’ble Court was whether the said document was a mere memorandum of the partition already done, stating the events which is factual in its nature, and would be an admissible evidence? Or whether the document was in the nature of giving rise to a title or right or any extinguishment of a right, by itself, hence attracting the provisions of the Registration Act, 1809, whereby the registration was compulsory and in case of non-registration, could not be admissible as evidence in the court of law?
The Court held that from the language used in the document, the court was convinced that the document was not merely a memorandum or record of a prior partition/family settlement/family arrangement but it was an instrument of partition requiring compulsory registration and for want of registration it was inadmissible in evidence and it could not be admitted in evidence.
3. Ejusdem Generis – Principle cannot be applied ignoring the natural meaning of the words used by the Legislature. [West Bengal Value Added Tax Act, 2003; Section 2(11)]
Tata Motors Finance Limited, ICICI Bank Limited and Family Credit Limited and Another vs. Assistant Commissioner of Sales Tax, Joint Commissioner of Sales Tax and Assistant Commissioner of Sales Tax Salt Lake Charge and Others [2016] 88 VST 227 (Cal) (HC)
Petitioners were a banking company and non-banking finance company. Petitioners granted loans to persons intending to purchase vehicles against hypothecation of vehicles by way of security under loan-cum-hypothecation agreements. The Tribunal held that Petitioners were dealers as per definition u/s. 2(11) of the West Bengal Value Added Tax Act. Hence, the present Petitions.
The question which required consideration by the court was, whether in respect of disposal of vehicle for recovery of loan, petitioners were liable for tax as dealers as per definition in section 2(11) of Act?
Under section 2(11), the term ‘Dealer’ was defined as under:
“‘Dealer’ means any person who carries on the business of selling or purchasing goods.
(b) Government, a local authority, a statutory body, a trust or other body corporate…etc”
Since the section was clear, the principles of Ejusdem Generis need not be resorted to.
It was held by the Court that the word used in clause(b) particularly the word “a trust” does not appear nor was shown to have anything in common with the preceding word “a statutory body”. Similarly, the word “body corporate” was not shown to have any common characteristic with the preceding word “trust”. The theory of ‘ejusdem generis’ cannot be applied in construing clause(b) of sub-section11 of section 2 of the aforesaid Act.
4. Precedent – Reference made by the co-ordinate bench to a larger bench – Would not amount to stay of earlier verdict – nor would it amount to the earlier verdict being inoperative. [Constitution of India, Article 141; Section 140, Section 163A, Motor Vehicles Act, 1988]
New India Assurance Co. Ltd. vs. Vinod C.s. & Ors.air 2016 (Noc) 766 (H.p.)
The main issue was whether a person would be entitled to take shelter u/s. 163A of the Motor Vehicles Act, 1988, where the person involved in the accident, was a victim due to his own rash and negligent actions or due to someone else’s acts or some other reason.
Various cases were cited before the Honourable Court wherein the issue that under sub-section (4) of section 140, there is a specific bar, whereby the concerned party (owner or insurance company) is precluded from defeating a claim raised u/s. 140 of the Act, by ‘pleading and establishing’, ‘wrongful act’, ‘neglect’ or ‘default’, but there is no such or similar prohibiting clause in section 163A of the Act. It was mentioned that the earlier verdict was not accepted by the later bench and hence was placed before the learned Chief Justice of India for referring the matter to a larger Bench for a correct interpretation of the scope of section 163A of the Motor Vehicles Act, 1988.
It was held by the High Court that merely because a verdict of the earlier bench is doubted by a subsequent co-ordinate bench, the earlier order does not become inoperative. It would also not amount to stay of the earlier verdict.
Unless and until the earlier decision is varied, it remains intact and the reference made by the subsequent co-ordinate bench cannot have any adverse consequence insofar as the declaration of the law is concerned.
