Taxation Law – Central Sales Tax Act, 1956 – Dispute over classification of transactions as Inter-State Sales or Stock Transfers – Challenge to assessment by State of Haryana imposing tax on transactions treated as inter-State sales – High Court examines whether movement of goods from Haryana to Bihar under an agreement constituted a sale or stock transfer – Held: Supply of goods pursuant to a prior contract with the Government of Bihar constituted an inter-State sale under the CST Act – Petitioners already assessed for local sales tax in Bihar cannot claim exemption from inter-State tax in Haryana – Dismissal of writ petitions, affirming the validity of Haryana’s tax demand. [Paras 1-16]

Inter-State Sales vs. Stock Transfer – High Court relies on precedents to determine that movement of goods occasioned by a contract of sale constitutes an inter-State sale – Reliance on Supreme Court’s ruling in Sahney Steel and Press Works Ltd. vs. Commercial Tax Officer, and Bharat Electric Ltd. vs. Union of India – The issuance of Form F by Bihar for stock transfer did not absolve the petitioner from the obligation to pay inter-State sales tax in Haryana – Tax Tribunal’s findings upheld – Claims of double taxation refuted. [Paras 8-14]

Decision – Dismissal of Writ Petitions – Held: Petitioner’s arguments regarding double taxation and erroneous classification as inter-State sales rejected – Haryana entitled to impose Central Sales Tax on transactions – Refund claims to be pursued per Tata Motors Ltd. vs. CST Appellate Authority ruling – Interim orders vacated – Final judgment dismisses all petitions and pending applications. [Paras 15-19]

Criminal Law – Petition under Section 482 Cr.P.C. for quashing of defamation charges – Accusations against the petitioners (including the Chief Minister of Delhi) for imputing that BJP had orchestrated deletion of voter names from specific communities – The High Court examined the validity of summoning orders issued by the Magistrate and upheld by the Sessions Court – Court found that the statements made by the petitioners were prima facie defamatory, targeting a determinable and identifiable group (BJP and its Delhi Pradesh unit) – Court emphasized that political parties are identifiable entities under law, capable of being defamed – Held that the allegations against BJP were made without factual basis, potentially swaying public opinion, and harming BJP's reputation – The petition under Section 482 Cr.P.C. was dismissed. [Paras 14-33].

Defamation Law – Evaluation of Evidence for Defamation – The Court held that even though the initial evidence was derived from newspaper reports and video clippings (generally considered hearsay), it was supported by certificates under Section 65B of the Indian Evidence Act, making it admissible – Summoning orders were based on sufficient prima facie evidence, and the absence of witness testimony at the pre-summoning stage did not invalidate the summoning order – The scope of inquiry under Sections 202 and 204 Cr.P.C. was limited to determining if there was sufficient ground to proceed, not to ascertain the truth of the allegations conclusively – Reliance was placed on precedents that allowed the continuation of defamation proceedings even when initial evidence was not fully established at the pre-summoning stage – Petition dismissed. [Paras 23-26].

Decision – Dismissal of Petition – Held – The High Court dismissed the petition, confirming the maintainability of defamation charges against the petitioners – The Court found that the tweets and public statements made by the petitioners were defamatory, particularly as they accused BJP of engaging in unethical practices without factual support – The petitioners' defense that their statements were made in good faith and for public good was reserved for trial – The Court emphasized that reputation, particularly of political entities, is protected under law, and defamatory imputations without factual basis cannot be shielded under the guise of free speech – The Court directed the continuation of proceedings before the Trial Court. [Paras 32-42].

Taxation Law – Central Sales Tax – Inter-State Sales – The petitioner, a public sector undertaking, entered into an agreement with the Government of Bihar to supply energy food. The Sales Tax Tribunal upheld the assessment of the transactions as inter-state sales liable to tax under the Central Sales Tax Act, despite the petitioner's contention that these were stock transfers and not sales. The Tribunal relied on the principles laid down in Sahney Steel and Press Works Limited v. Commercial Tax Officer, where it was held that movement of goods pursuant to a contract of sale qualifies as inter-state sales [Paras 8-11].

Sales Tax Tribunal – Misconception in Classification of Transactions – The petitioner argued that sales tax had already been paid in Bihar and U.P., and thus, Haryana could not levy the tax again. The Tribunal rejected this claim, asserting that the payment of local sales tax in other states does not preclude the imposition of Central Sales Tax on inter-state sales [Paras 12-14].

Refund and Double Taxation – In light of Tata Motors Limited v. Central Sales Tax Appellate Authority, the court recognized the issue of double taxation and allowed the petitioner the liberty to seek a refund of the amount already paid to the concerned states. However, the petition was dismissed, upholding the imposition of Central Sales Tax by Haryana [Paras 15-17].

Decision: Writ petitions dismissed. The court granted the petitioner the right to claim a refund for taxes paid to other states but upheld the tax demand by Haryana.

Criminal Law – Quashing of FIR under Sections 498A, 406, 420, 506(2), 114 IPC and Sections 3, 7 of the Dowry Prohibition Act – High Court quashed the FIR and all consequential proceedings against the accused (father-in-law and mother-in-law) under Section 482 CrPC – The complainant filed a case alleging harassment after marriage, but the Court found the allegations to be general and unsubstantiated – The Court held that the complainants had falsely implicated the applicants in order to pressure the family into a settlement – Court observed the applicants, aged 90 and 80, had no involvement in the alleged offences [Paras 1-7, 17].

Abuse of Process – Court found that the FIR was an abuse of the legal process, aimed at harassment rather than the pursuit of justice – Referring to multiple precedents, including Preeti Gupta v. State of Jharkhand and Geeta Mehrotra v. State of Uttar Pradesh, the Court emphasized caution in matrimonial disputes, especially when extended family members are implicated without specific evidence – It was noted that the marriage had dissolved via divorce, and there was no substantial proof of harassment against the in-laws [Paras 6-7, 13].

Decision – FIR Quashed – Held – The application under Section 482 CrPC was allowed – The Court quashed the FIR and all subsequent proceedings against the petitioners, ruling that their implication in the case was motivated by personal grievances rather than actual evidence of wrongdoing [Paras 15-17].

Civil Procedure – Second Appeal – Scope of Interference – Court reiterated the limited scope of interference in second appellate jurisdiction under Section 100 CPC – Findings of fact by lower courts cannot be disturbed unless there is clear perversity – Appeal dismissed as no substantial question of law arose [Paras 16-22].

Specific Performance – Registered Agreement – Execution and Validity – Defendant's plea that the agreement was fraudulently executed was rejected due to lack of sufficient evidence – Registered agreement and payment endorsements made by the Sub-Registrar were presumed correct under law – Concurrent findings of lower courts upholding the specific performance decree were affirmed [Paras 8-14].

Decision: Second Appeal dismissed at the stage of admission. The concurrent judgments and decrees of the lower courts were upheld, and no substantial question of law was found to warrant interference.

Service Law – Pay Scale Parity – Appellants challenged the Single Judge’s order granting higher pay scales and benefits to the respondents, similar to those awarded to another set of petitioners in a prior case – Appellants argued the respondents were “fence sitters” and their claims were time-barred due to delay, waiver, and acquiescence – High Court set aside the impugned order, holding that the respondents failed to approach the court in a timely manner and were not entitled to claim benefits granted in previous proceedings involving different parties – Appeal allowed, writ petition dismissed [Paras 1-27].

Delay and Laches – Applicability of Arvind Kumar Srivastava Principle – Court held that although similarly situated employees should normally be treated alike, the respondents’ significant delay in approaching the court disqualified them from claiming benefits granted to others in earlier judgments – Cited Tarsem Singh and T.T. Murali Babu to emphasize the importance of promptness in seeking legal redress [Paras 20-27].

Decision: Appeal allowed – Impugned judgment and order set aside – Writ petition dismissed – No costs awarded [Paras 27-28].

Income Tax Law – Reopening of Assessment – Sections 147 and 148 of the Income Tax Act, 1961 – Whether reopening based on "change of opinion" without new tangible material is valid – Held, reopening was invalid due to lack of new material. The Court referred to CIT v. Kelvinator of India Ltd., noting that mere change of opinion cannot justify reopening an assessment under Section 147 without tangible material – [Paras 29-31]​.

Reassessment and Change of Opinion – Difference Between Short-Term Capital Gain and Adventure in the Nature of Trade – The Assessing Officer initially treated the income as short-term capital gain, but later classified it as "adventure in the nature of trade" without any fresh notice or valid reasoning – The Court found this change arbitrary and unsustainable as there was no new material to substantiate the reassessment – [Paras 35-40]​.

Constitutional Law – Article 226 – The Court exercised its discretion to entertain the writ petition under Article 226 despite the existence of an alternative remedy, as the reassessment proceedings were arbitrary and without jurisdictional basis. The alternative remedy rule does not apply when reassessment is based on procedural irregularity or arbitrary exercise of power – [Paras 14-16]​.

Decision: Writ petition allowed – Reassessment proceedings quashed – All orders dated 29.09.2021, including the demand notice, were set aside – [Paras 41-42]​.

Income Tax – Final Assessment Order – Draft Assessment Order Requirement – Petitioner contended that the final assessment order passed by the Assessing Officer (AO) was invalid as it was not preceded by a draft assessment order, violating Section 144C of the Income Tax Act, 1961 – Court held that the failure to issue a draft assessment order during remand proceedings as mandated by Section 144C rendered the final assessment order invalid – Assessment and demand notices quashed [Paras 1-6, 14].

Jurisdictional Error – Procedural Compliance – Court emphasized the mandatory nature of the procedural requirement under Section 144C, underscoring that any final assessment order passed without adherence to this process, particularly in remand cases, is legally untenable [Paras 4-5, 51-52].

Procedure under Section 144C – Scope of "In the First Instance" – The respondents argued that the expression "in the first instance" in Section 144C obviates the need for a draft assessment order upon remand – The Court rejected this argument, affirming that the draft order requirement is mandatory regardless of whether the proceedings are initiated anew due to remand by the Tribunal [Paras 14-16, 19-23].

Comparative Analysis – Section 144B vs. Section 144C – The Court found that Section 144C establishes a distinct and comprehensive assessment regime for eligible assessees, which differs fundamentally from the earlier Section 144B. Section 144C involves multiple levels of review and corrective mechanisms that are not merely procedural but essential to ensuring a fair assessment process [Paras 36-45].

Limitation and Remand – Statutory Period – The Court rejected the respondents' contention that the assessment could be remanded for fresh proceedings despite the lapse of the statutory period under Section 153. The Court held that extending the limitation period or condoning the delay in such cases would be impermissible [Paras 54-60].

Decision:
Writ Petition allowed. The impugned final assessment orders and consequent demand and penalty notices were quashed due to non-compliance with Section 144C. The petitioners were entitled to all consequential reliefs.
 

Limitation Act Applicability – Section 31 of the State Financial Corporation Act – The appellant argued that the Limitation Act does not apply to enforcement against the surety under Section 31 of the State Financial Corporation Act, 1951 – Held: The court rejected this argument, stating that unless there is an express provision excluding the Limitation Act, it is applicable – The application under Section 31 is not a suit but a claim application, and Article 137 of the Limitation Act applies, which prescribes a three-year period – The appellant’s contention that Article 112 applied was also rejected, as the proceedings under Section 31 are not considered a suit [Paras 8-12].

Commencement of Limitation – Right to Sue and Enforcement Against Surety – The appellant sought to enforce the guarantee after selling the mortgaged property of the principal borrower – Held: The right to claim from the surety arises after the assets are sold, as per Article 55 of the Limitation Act – In this case, the sale occurred on 11.08.2003, and the application was filed on 07.12.2009, making it barred by limitation – The court referred to precedents, including Deepak Bhandari v. H.P. State Industrial Development Corpn. Ltd., and H.P. Financial Corpn. v. Pawna, to establish the three-year period [Paras 10, 13].

Provisions of the Limitation Act – Articles 136, 137, and 55 – The court analyzed the applicability of different articles of the Limitation Act – It concluded that Article 136, which applies to the execution of decrees, was not applicable to proceedings under Section 31, as established in Maharashtra State Financial Corpn. v. Ashok K. Agarwal – Article 137, which provides a three-year limitation period from the date the right to apply accrues, was applicable – The right to sue on a contract of indemnity arose after the sale of assets, making the claim barred [Paras 11-12].

Delay in Filing – Laches and Vigilance – The court found that the appellant corporation failed to act promptly and was not vigilant in enforcing its rights – The corporation took possession in 1996 but filed the application only in 2009, after several unsuccessful auction attempts – The court applied the principle “vigilantibus et non dormientibus jura subveniunt” (the law assists those who are vigilant with their rights and not those who sleep on them) to deny the appeal [Paras 13-14].

Decision – Appeal Dismissed – The court dismissed the appeal, upholding the trial court’s decision that the claim under Section 31 was barred by limitation – It held that the appellant corporation's application was filed beyond the permissible period under Articles 55 and 137 of the Limitation Act [Paras 15-16].