Facts:

The appeals involve a pharmaceutical company (formerly known as Eskayef Pharmaceuticals, now SmithKline Beecham Pharmaceuticals (India) Ltd.) and the Commissioner of Income Tax, Karnataka-II Bangalore. The main issues revolve around deductions under the Income Tax Act and the nature of expenditure related to the distribution of physician's samples by the appellant.

Issues:

Whether the liability to pay surtax is an admissible deduction in computing the total income.

Whether the expenditure incurred on the distribution of physician's samples by the pharmaceutical company qualifies as advertisement expenditure and is subject to the restrictions of Section 37(3A) of the Income Tax Act or is exempt as expenditure incurred exclusively for business purposes.

Held:

In this judgment, the Court addressed the first issue by referring to a previous decision in the appellant's case, concluding that the liability to pay surtax is not an admissible deduction in computing the total income.

Regarding the second issue, the Court held that the distribution of physician's samples by the pharmaceutical company to the medical profession constitutes a form of publicity and sales promotion aimed at persuading doctors to prescribe these drugs. Consequently, the expenditure incurred on such samples should fall under the scope of Section 37(3A) of the Income Tax Act and be subject to limitations on deductibility.

The Court emphasized that there was no evidence presented to support the company's claim that the distribution of samples was primarily for obtaining feedback from medical practitioners regarding the efficacy of the drugs.

Facts:

The first appellant was a member of Dalamal Tower Premises Co-operative Society Ltd. and held 5 shares with distinctive numbers.

The first appellant transferred these 5 shares to appellants 2, 3, 4, 5, and 6 for a consideration of Rs. 9,46,900 through an instrument of transfer.

The instrument of transfer stated that the transferor had the right to occupy specific office premises in Dalamal Tower, and for consideration, the transferor was transferring the shares to the transferees.

Issues:

Whether the transfer of shares in a cooperative society is subject to levy of stamp duty under the Bombay Stamp Act, 1958.

Whether the State Legislature has the legislative competence to levy stamp duty on the transfer of shares.

Held:

The question of whether a transfer of shares in a cooperative society is subject to levy of stamp duty on the basis that it is a conveyance has already been answered by a previous judgment (Veena Hasmukh Jain and Another Vs. State of Maharashtra and Others). The previous judgment held that such agreements to transfer shares in a cooperative society would be covered by Article 25 of the Bombay Stamp Act, 1958, and stamp duty would be leviable as if it is a conveyance. These agreements are, in effect, agreements to sell immovable property, and thus, they must be deemed to be conveyances. Therefore, question (a) is answered by the previous judgment.

Since it is held that the instrument of transfer is not an instrument of transfer of shares but a conveyance, question (b) regarding the legislative competence of the State no longer survives. The stamp duty is levied on the basis that the agreement is a conveyance, and there is no dispute that the State Government has legislative competence to levy stamp duty on a conveyance of property.

Facts:

Appellant Motilal Jain entered into a contract with the respondent, Ambika Prasad Ram, to purchase immovable property.

The contract specified a consideration and required the execution of a registered sale deed within five months.

Appellant alleged that respondent was evading payment of the balance consideration and execution of the sale deed.

Appellant sent notices to the respondent through his advocate.

Appellant filed a suit for specific performance of the contract and alternatively claimed damages.

Issues:

Whether the delay in filing the suit was justifiable.

Whether the plaintiff (appellant) demonstrated readiness and willingness to perform.

Whether the alternative claim for damages disentitled the plaintiff from specific performance.

Held:

The High Court incorrectly noted the delay, which was not substantial, and did not warrant denying specific performance. Delay beyond the limitation period or other equitable considerations were not applicable in this case.

The pleading of readiness and willingness need not follow specific wording and should be determined based on the entirety of facts and circumstances. In this case, the plaint averments indicated the plaintiff's readiness and willingness to fulfill the contract.

The alternative claim for damages did not disentitle the plaintiff from specific performance. The plaintiff was entitled to both remedies.

Facts:

The appellant, engaged in shipbuilding, entered into contracts with ship owners. The assessing authority classified these transactions as sales, making the appellant liable for sales tax under Section 2(n) of the A.P. General Sales Tax Act. The Tribunal, however, categorized these contracts as works contracts as defined in Section 2(t) of the Act. The High Court upheld the classification of these transactions as sales, leading to the present appeal.

Issues:

Whether the shipbuilding contracts should be considered sales or works contracts for the purpose of sales tax liability under the A.P. General Sales Tax Act.

Held:

The distinction between a contract of sale and a works contract is challenging, and no fixed formula exists to determine this classification. The intention of the parties should be ascertained by considering all the terms and conditions of the contract. It is essential to avoid interpreting individual clauses in isolation but to analyze the overall nature of the transaction.

The contracts in question involve the sale of vessels, as property in the vessel passes to the buyer upon delivery, and the contracts are for an ascertained price. Therefore, they fall under the definition of sale in clause (n) of the A.P. General Sales Tax Act, 1957, and are not merely works contracts as defined in clause (t). Hence, these transactions are subject to sales tax.

While a clause in the contract suggests that property in the vessel passes to the buyer with the payment of the first installment, the true intention of the parties should be determined, and this clause should not be taken at face value.

Payments made by the buyer are directed toward the vessel itself, not its components. The vessel is available for sale to another party by the builder if the contract falls through. The importance of the vessel's components, such as the hull, machinery, and engine, outweighs that of labor.

The buyer gains the right to mortgage their interest in the vessel to the extent of payments made but subject to the builder's lien for the unpaid portion of the price.

If the builder defaults on contract obligations, the buyer has the right to take possession of the vessel in its current state and complete the remaining work elsewhere, with any additional costs borne by the builder.

The builder is responsible for obtaining insurance in joint names with the buyer. Any loss or damage to the vessel before delivery is the builder's responsibility, and reimbursement can be sought through an insurance claim.

Facts:

The appellant, a biscuit manufacturer, entered into an agreement with Britannia on December 15, 1986, to manufacture biscuits for Britannia. Britannia supplied ingredients and recipes, and the appellant manufactured and packaged biscuits as per Britannia's instructions. The agreement expressly stated a principal-principal relationship, allowing the appellant to manufacture biscuits under other brands.

A dispute arose when the Assistant Collector proposed assessing the value of the biscuits based on Britannia's wholesale price.

Issues:

Whether the assessable value of the biscuits manufactured by the appellant should be determined based on Britannia's wholesale price.

Held:

After reviewing the case and referring to the judgment in Ujagar Prints Vs. Union of India (UOI), it was established that for assessing the value of goods for excise duty purposes, post-manufacturing expenses should not be considered.

Processing houses, like the appellant, were liable for excise duty not because they owned the goods, but because they caused their manufacture. Therefore, the assessable value should include the value of raw materials, job work, manufacturing profit, and manufacturing expenses, determined at the factory gate when goods leave the factory.

Post-manufacturing profits or expenses, such as those incurred by Britannia, should not be included in the assessable value.

The appeal was allowed, and the excise authorities were directed to determine the excise duty amount in accordance with this principle.

Facts:

The case involves an accident that took place at 11:30 a.m.

There is a dispute between the insurance company (appellant) and the insured owner (respondent) regarding the time of policy issuance.

The insurance company claims the policy was issued at 4:45 p.m. on the same day as the accident, while the insured owner asserts it was issued at 10:00 a.m. on the same morning.

The Tribunal had initially ruled that the policy covered the liability from the previous midnight of the same date.

Issues:

The primary issue is whether an insurance policy issued after the time of an accident on the same day provides coverage for the insurer.

A secondary issue concerns the disputed time of policy issuance, with the insurer claiming 4:45 p.m. and the insured owner claiming 10:00 a.m.

Held:

The Supreme Court did not resolve the dispute over the time of policy issuance but remanded the case to the Tribunal for this determination.

The Court ordered both the insurance company and the insured owner to share half of the decretal amount, which should be deposited before the Tribunal within four weeks from the date of the judgment.

It was emphasized that once the Tribunal determined liability, the party succeeding in the case would have the right to recover any balance amount from the other party.

Facts:

The Food Inspector filed a complaint against the respondent for selling adulterated Toor Dal.

The sample analysis initially indicated adulteration with Kesari Dal, but a later certificate from the Director of the Central Food Laboratory pointed to synthetic Coal Tar Dye.

The respondent challenged the charge, arguing that a fresh sanction was needed due to the change in analysis results.

Issues:

Whether a fresh consent is required for prosecution when the Director's certificate supersedes the Public Analyst's report.

Held:

The court observed that the institution of prosecution under the Prevention of Food Adulteration Act can be validly done with the consent of the appropriate authority.

The certificate from the Director, replacing the Public Analyst's report during the trial, does not necessitate a fresh consent for prosecution.

The court emphasized that the purpose of obtaining consent is to prevent unnecessary or frivolous prosecution, and once validly instituted, the judicial functionary can control further proceedings.

Section 216(5) of the CrPC, dealing with alteration of charges, does not require a fresh sanction if the altered charge is based on facts for which consent was already obtained.

The court concluded that once validly instituted, neither new data nor added reasons in the Director's certificate can annul the original sanction, and the trial must proceed with the existing certificate.

Facts:

The Forest Tribunal, under the Kerala Private Forests (Vesting and Assignment) Act, 1971, issued an order on 11.8.1982, asserting that the disputed land did not vest in the Government. The State of Kerala's appeal to the High Court against this order was dismissed on 17.12.1982. With no statutory remedy for appeal, revision, or review against the High Court's order, the State filed an SLP before the Supreme Court, which was dismissed on merits on 18.7.1983. Subsequently, Section SC was inserted into the 1971 Act, empowering the government to file appeals or review applications in specific cases. In January 1984, the State sought a review of the High Court's order.

Issues:

The maintainability of the review petition after the dismissal of the SLP. The petitioner contended that the High Court's order had merged into the Supreme Court's order, rendering a review petition misconceived.

Held:

The High Court's order of 17.12.1982 did not merge with the Supreme Court's order of 18.7.1983. Therefore, the High Court had the authority to review its earlier decision. The right of review was statutorily conferred on the High Court by sub-Section (2) of Section SC of the Kerala Act.

Article 136 of the Constitution grants the Supreme Court sweeping jurisdiction. The exercise of this jurisdiction involves two steps: granting special leave to appeal and hearing the appeal. Dismissing an SLP, even if by a non-speaking order, does not result in the merger of the impugned order into the Supreme Court's order.

An order dismissing an SLP, whether by a non-speaking or speaking order, does not attract the doctrine of merger. A non-speaking order does not substitute itself for the order in issue or declare law under Article 141.

Mere pendency of an application for leave to appeal does not jeopardize the finality of the decree or order under challenge. The finality is at risk only if leave to appeal is granted and the appeal is pending, reopening the issues decided.

The doctrine of merger is not universally applicable and depends on the nature of jurisdiction exercised and the subject matter of challenge. It is a common law doctrine based on principles of propriety.

The right of review is available when an SLP is dismissed. The review can be preferred in the High Court before special leave is granted but not after it is granted. Once special leave is granted, the Supreme Court's jurisdiction is invoked.

FACTS:

The plaintiff, a tenant, filed a suit for specific performance of a contract for the sale of a property by the first defendant. The first defendant, having entered into an agreement with the plaintiff, later sold the property to defendants 2 to 5. The plaintiff claimed that the subsequent sale was not bona fide, and he sought specific performance of the original contract.

ISSUES:

Whether defendants 2 to 5 are bona fide purchasers without notice of the original contract?

Whether defendants 2 to 5 were required to make an inquiry into the nature of possession or title of the plaintiff at the time of the subsequent sale?

HELD:

The court held that defendants 2 to 5 were not bona fide purchasers in good faith for value without notice of the original contract. The court emphasized the duty of a subsequent purchaser to make an inquiry into the title and interest of the person in actual possession. The actual possession itself is deemed notice of the title, and a subsequent purchaser must inquire into further interests, nature of possession, and title when entering into a sale transaction.

DECISION: The appeal was dismissed, and the judgment and decree of the trial court were confirmed. Defendants 1 to 5 were directed to execute and register the sale deed in favor of the plaintiff for the suit property.

REFERRED CASES:

Veeramalai Vanniar (Died) and Others Vs. Thadikara Vanniar and Others, AIR 1968 Mad 383 : (1968) ILR (Mad) 511 : (1968) 81 LW 90 : (1968) 1 MLJ 437

Dr. Govinddas and Another Vs. Shrimati Shantibai and Others, AIR 1972 SC 1520 : (1972) 74 PLR 227 : (1973) 3 SCC 418 : (1972) 4 UJ 543