Best of the Rest
- Acknowledgment of the debt in Balance Sheet
of Company makes sufficient ground for winding-up on inability to pay the debt
Facts
The respondent filed the
Petition u/s. 433 of the Companies Act for winding up of the appellant company
on the inability to pay the debt after notice. The appellant company had also
not replied to the statutory notice denying the liability.
Held
The Hon’ble Court noticed that the principal claim for the goods supplied was
reflected in the balance sheet of the company, therefore that was sufficient
cause for instituting the remedy u/s. 433(e) of the Act.
Electron Ind. Ltd. vs. Soham Polymers P. Ltd.
(2006) 133 Comp Cas 3 (SC)
- No recovery of excise duty can be made from
a company declared as sick unit and operating agency appointed
Held
The petitioner company was
declared a sick unit and SBI was appointed as its operating agency u/s. 17(3)
of the Sick Industrial Companies Co. (Special Provisions) Act, 1985. As the
Scheme was under preparation, the Excise department could not have attached
the property belonging the sick company nor the Excise dept. could enforce
their claims to recover the excise duty.
Bharat Heavy Plate & Vessels
Ltd. vs. Asstt. Commissioner of Central Excise Division II and Anr. (2006) 133
Comp. Cas 41 (AP)
-
(a) Acknowledgment of debt by
e-mail in unambiguous and categorical term by managing director. Limitation
would start from the date of email – Limitation Act, Sec. 18
Held
The liability to pay the dues
had been admitted in an unconditional manner and in unambi-guous and
categorical terms in the e-mail letter of the managing director of the
company. This was an acknowledgment of debt u/s 18 of the Limitation Act, and
three years for the purpose of computing the limitation period would start
from the date of email.
(b) Erstwhile employee whose
salary and terminal dues have not been paid is a creditor, entitled to seek
windingup: Companies Act, 1956 secs. 433(e), 434 and 439
Held
A worker per se may not have
the right to file a winding up petition. But when he becomes a “creditor” he
will have the right to file the petition as a “creditor” which category is
stipulated in section 439(1)(b) of the Act.
Non payment of
salary/terminal dues would give a right to an employee to bring an action
against the employer, i.e. an actionable claim. Therefore, the dues, which are
recoverable by the employee from the employer company, are “debts” and the
employee whose debts are not paid shall have to be treated as a “creditor”.
The Hon’ble Delhi High Court relied on the decision of Apex court in the case
of Kesoram Industries and Cotton Mills Ltd. vs. CWT (1966) 59 ITR 767 (SC).
Argha Sen and Abeer
Chakravarty vs. Interra Information Technologies (India) P. Ltd. (2006) 133
Comp Cas 49 (Del.)
- Manner of disposal of appeal by Tribunal
Held
The Hon’ble Apex Court
showing its dissatisfaction over the manner in which the appeals are disposed
by the Customs, Excise and Gold (Control) Appellate Tribunal observed that the
Tribunal must decide the appeal on merits after hearing the arguments of each
party. The Tribunal should also give reasons for accepting or rejecting the
submission and must consider all contentions of the parties and deal with each
contention
Commissioner of Central
Excise vs. Andaman Timber Ind. Ltd. (2006) 6 RC 431
- A valid power of attorney must bear the date
and place of execution by the person and must contain specific authorization
Held
Dismissing the petition filed
u/s. 433(e) of the Companies Act, 1956 through the power of attorney holder
the Court held that the power of attorney filed on behalf of the petitioner
did not bear the date and place of execution, secondly the power of attorney
empowered the holder to file a suit for recovery of any debt or any legal
proceeding for such recovery. The Hon’ble Court relying on the decision of
Bombay High Court in the case of Shantilal Khushaldas & Bros. P. Ltd. vs.
Chandanbala Sughir Shah 1993 (77) Comp 253 (Bom) held that the said clause in
power of attorney cannot be construed to empower the power of attorney holder
to file company petition for winding up.
Vimal C. Sodhani vs. Parag
Fans & Cooling System Ltd. & Ors. (2006) 133 Comp Cas 286 (MP)
- Difference between fees, cesses and taxes
Held
Ordinarily a cess is also a
tax, but it is a special kind of tax
Generally tax raises revenue
which can be used generally for any purpose by the State. For example, the
income tax or excise tax or sales tax are taxes which generate revenue which
can be utilized by the Union or the State Governments for any purpose; i.e.,
for payment of salary to the members of the armed forces or civil servants,
police, etc. or for development programmes, etc. However, cess is a tax which
generates revenue which is utilised for a specific purpose. For example,
health cess raises revenue which is utilized for health purposes e.g.,
building hospitals, giving medicines to the poor, etc. Similarly, education
cess raises revenue which is used for building schools or other educational
purposes.
However, in such matters
nomenclature is not very important and one have to see the nature of the levy.
Hence, what is called a cess may be in reality a fee depending on its nature.
It is well settled that the
basic difference between a tax and a fee is that a tax is compulsory exaction
of money by the State or a public authority for public purposes, and is not a
payment for some specific services rendered. On the other hand, a fee is
generally defined to be a charge for a special service rendered by some
governmental agency.
Subsequently there has been a
sea change in the concept of a fee and now it is no longer regarded necessary
that (i) some specific service must be rendered to the particular individual
or individuals from whom the fee is being realised, and what has to be seen is
whether there is a broad and general correlationship between the totality of
the fee on the one hand, and the totality of the expenses of the services on
the other.
Vijayalakshmi Rice Mills &
Ors vs. Commercial Tax Officers, Palakol & Ors. 2006 (6) SCC 763
