Trade Mark – Classification of goods and services

Commentaries / Editorials – Dated:- 13-6-2009 – THE FOURTH SCHEDULE TO TRADE MARKS RULES, 2002 Classification of goods and services – Name of the classes (Parts of an article or apparatus are, in general, classified with the actual article or apparatus, except where such parts constitute articles included in other classes). Class 1. Chemical used in industry, science, photography, agriculture, horticulture and forestry; unprocessed artificial resins, unprocessed plastics; manures; fire extinguishing compositions; tempering and soldering preparations; chemical substances for preserving foodstuffs; tanning substances; adhesive used in industry Class 2 . Paints, varnishes, lacquers; preservatives against rust and against deterioration of wood; colorants; mordents; raw natural resins; metals in foil and powder form for painters; decorators; printers and artists Class 3 . Bleaching preparations and other substances for laundry use; cleaning; polishing; scouring and abrasive preparations; s

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l implements other than hand-operated; incubators for eggs Class 8 . Hand tools and implements (hand-operated); cutlery; side arms; razors Class 9 . Scientific, nautical, surveying, electric, photographic, cinematographic, optical, weighing, measuring, signalling, checking (supervision), life saving and teaching apparatus and instruments; apparatus for recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs; automatic vending machines and mechanisms for coin-operated apparatus; cash registers, calculating machines, data processing equipment and computers; fire extinguishing apparatus Class 10 . Surgical, medical, dental and veterinary apparatus and instruments, artificial limbs, eyes and teeth; orthopaedic articles; suture materials Class 11 . Apparatus for lighting, heating, steam generating, cooking, refrigerating, drying ventilating, water supply and sanitary purposes Class 12 . Vehicles; apparatus for locomotion by land, air or water Clas

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metal Class 18 . Leather and imitations of leather, and goods made of these materials and not included in other classes; animal skins, hides, trunks and travelling bags; umbrellas, parasols and walking sticks; whips, harness and saddlery Class 19 . Building materials, (non-metallic), non-metallic rigid pipes for building; asphalt, pitch and bitumen; non-metallic transportable buildings; monuments, not of metal. Class 20 . Furniture, mirrors, picture frames; goods(not included in other classes) of wood, cork, reed, cane, wicker, horn, bone, ivory, whalebone, shell, amber, mother- of-pearl, meerschaum and substitutes for all these materials, or of plastics Class 21 . Household or kitchen utensils and containers(not of precious metal or coated therewith); combs and sponges; brushes(except paints brushes); brush making materials; articles for cleaning purposes; steelwool; unworked or semi-worked glass (except glass used in building); glassware, porcelain and earthenware not included in ot

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pioca, sago, artificial coffee; flour and preparations made from cereals, bread, pastry and confectionery, ices; honey, treacle; yeast, baking powder; salt, mustard; vinegar, sauces, (condiments); spices; ice Class 31. Agricultural, horticultural and forestry products and grains not included in other classes; live animals; fresh fruits and vegetables; seeds, natural plants and flowers; foodstuffs for animals, malt Class 32 . Beers, mineral and aerated waters, and other non-alcoholic drinks; fruit drinks and fruit juices; syrups and other preparations for making beverages Class 33 .Alcoholic beverages(except beers) Class 34 . Tobacco, smokers articles, matches SERVICES Class 35 .Advertising, business management, business administration, office functions. Class 36 .Insurance, financial affairs; monetary affairs; real estate affairs. Class 37 . Building construction; repair; installation services. Class 38. Telecommunications. Class 39. Transport; packaging and storage of goods; travel ar

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Livingstones Jewellery (P.) Ltd. Versus Deputy Commissioner of Income-tax, Range 5(2), Mumbai

2009 (5) TMI 617 – ITAT MUMBAI – [2009] 31 SOT 323 (MUM.) – – Free Trade Zone – IT APPEAL NO. 187 (MUM.) OF 2007 Dated:- 12-5-2009 – R.S. SYAL AND D.K. AGARWAL, JJ. K. Gopal for the Appellant. R.S. Srivastava for the Respondent. ORDER R.S. Syal, Accountant Member. – This appeal by the assessee arises out of the order passed by the Commissioner of Income-tax (Appeals) on 18-11-2006 in relation to the assessment year 2003-04. 2. The only issue raised through various grounds is against the denial of claim of the assessee for deduction under section 10A on the interest income of Rs. 9,00,961. Briefly stated the facts of the case are that the assessee was carrying on the business of manufacturing and export of stubbed and plain jewellery of gold and platinum. It had its factory at Gem & Jewellery Complex III, SEEPZ, Andheri (East), Mumbai-400 096. Return was filed declaring total income at Rs. 18,02,187. The assessee had claimed deduction under section 10A. On the perusal of the d

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ave been derived from export of goods and merchandise. He took into consideration the distinction between the scope of derived from and attributable to with the help of certain judgments of the Hon ble Supreme Court and other High Courts. It was, therefore, held that the assessee was not entitled to deduction under section 10A in respect of interest earned on fixed deposits. No relief was allowed in the first appeal. 3. Before us the learned Counsel for the assessee contended that the assessee had rightly claimed deduction on the interest income as the parking of funds in FDRs was necessitated for availing the benefit of credit facilities from the bank. It was therefore stated that but for the making of FDRs the assessee could not have enjoyed the credit facility from the bank and hence the interest earned on such FDRs be rightly treated as eligible for deduction under section 10A. He also referred to the order in the case of Asstt. CIT v. Motorola India Electronics (P.) Ltd. [2008] 11

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which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee. On a careful perusal of the language of this section it is seen that prima facie only the profits and gains derived by an undertaking from the export of articles etc., are eligible for deduction. The expression used in this provision is derived from the export of articles . It is in contradistinction to the expression attributable to as employed in some other sections, which generally postulates that any income which has direct or indirect nexus with the stated undertaking or activity, can be considered as eligible for deduction. In such later cases, the income arising from any link, direct or indirect with the eligible activity, entitles the assessee to the benefit of deduction. However in order to be covered within the expression derived from , it is sine qua non that the income must spring directly from the

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the Electricity Board, in which again the expression derived from was employed. A plea was taken before the Hon ble Supreme Court that but for the deposit with the Electricity Board, the assessee could not have got the electricity connection and hence the interest on deposits with the Electri-city Board was to be considered as profits and gains derived from industrial undertaking. Repelling this contention, the Hon ble Supreme Court held that the words derived from in section 80HH must be understood as something which has a direct or immediate nexus with the appellant s industrial undertaking. Although electricity may be required for the purposes of the industrial undertaking, the deposit required for its supply is a step removed from the business of the industrial undertaking. The derivation of the profits on the deposit made with Electricity Board was held to be not flowing directly from the industrial undertaking itself. 5. Coming back to section 10A we find that sub-section (1) als

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the business carried on by the undertaking. Once the expression derived from having restricted scope has been specifically defined in the same section, then the meaning of such expression as understood in common parlance will not be applicable. Rather the specific meaning given to it will come into play. We further note that sub-section (4) has been worded on the pattern of section 80-IA, prior to its substitution with effect from 1-4-2000, which referred to profits and gains derived from any business of an industrial undertaking . In the context of section 80-IA, the Amritsar Bench of the Tribunal in the case of Dy. CIT v. Chaman Lal & Sons [2005] 3 SOT 333 [to which one of us, namely the AM, is party] held that in such a worded section, the benefit of deduction has to be made available in respect of purchase and sale which was part and parcel of the business of the industrial undertaking. Thus when sub-section (1) of section 10A is read in juxtaposition to sub-section (4), we ar

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Intimation for removal of re-made goods – Annexure – C

Returned Goods Central Excise – Annexure- C Intimation for removal of re-made goods [ Trade Notice No. 20/2003, dated 6-2-2003 – Commissioner of Central Excise, Ahmedabad-II] (1) Name of the assessee : (2) ECC No. : (3) Jurisdictional Central Excise Range and Division : (4) Date on whi

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Accountal of returned goods – Annexure- B

Returned Goods Central Excise – Annexure- B Accountal of returned goods [ Trade Notice No. 20/2003, dated 6-2-2003 – Commissioner of Central Excise, Ahmedabad-II] Sr. No. Name and address, ECC No. of manu-facturing unit Details of duty paying documents Description, Qty. of goods received Identification Marks Name, address, ECC No. if any of the person/ unit from whom goods are received Purpose for which received Process carried out Whether any excisable goods are used in repairs/ replace-ments Duty paid on such additions/ replacements CENVAT Credit availe

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Intimation in respect of duty paid excisable goods brought into the factory premises under Rule 16 sub rule 3 of Central Excise Rules 2002 – Annexure- A

Returned Goods Central Excise – Annexure- A Intimation of Receipt of Duty Paid Goods into the Factory Premises [ Trade Notice No. 20/2003, dated 6-2-2003 – Commissioner of Central Excise, Ahmedabad-II] To: The Superintendent of Central Excise, _____________ Range. Sir, I/We hereby declare that the under mentioned duty paid excisable goods have been received into our registered factory premises on (date) __________ at (address) ___________________________________________ for purpose of _____________________. Name and address of the manufacturing Factory No. and date of invoice under which duty has been paid Description and variety of goods

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Demand of Service Tax on CBFC – reg.

F.No.V/DGST/30-Misc.185/2008/409 Dated:- 16-1-2009 Order-Instruction – Circulars – Service Tax – F.No.V/DGST/30-Misc.185/2008/409 DIRECTORATE GENERAL OF SERVICE TAX 1st Floor, Piramal Chambers, Jijibhoy Lane , Parel, Lalbaug, Mumbai – 400 012. Dated : January 16, 2009 Subject : Demand of Service Tax on CBFC – reg. An instance has come to the notice of the Board in respect of a field formation whereby a Show Cause Notice has been issued demanding Service Tax from Central Board of Film Certification under the category of 'Technical Testing and Analysis Service' and/or 'Technical Inspection and Certification Service' on account of services provided by Central Board of Film Certification by way of certification of

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ted public exhibition or for public exhibition restricted to adults, he shall be punishable with imprisonment for a term which may extend to three years, or with fine which may extend to one lakh rupees, or with both, and in the case of a continuing offence with a further fine which may extend to twenty thousand rupees for each day during which the offence continues. Hence certification by Central Board of Film Certification is a statutory requirement. CBEC vide Circular No.96/7/2007-ST dated 23.08.2007 has clarified that any activity assigned to and performed by a sovereign/public authority under the provisions of any law, do not constitute taxable services. Any amount/fee collected in such cases are not to be treated as consideration fo

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Amendments in Schedule-I (Imports) to the ITC (HS) – Articles of cement, of concrete or of artificial stone, whether or not reinforced Tiles, flagstones, bricks and similar articles

DGFT – 77 (RE-2008)/2004-2009 – Dated:- 9-1-2009 – Amendments in Schedule-I (Imports) to the ITC (HS) Classifications of Export and Import Items, 2004-09. TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY PART-II, SECTION-3, SUB SECTION (ii) GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT OF COMMERCE NOTIFICATION No. 77 (RE-2008)/2004-2009 NEW DELHI: Dated: 9th January, 2009 S.O. (E) – In exercise of powers conferred under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with paragraph 2.1 of the Foreign Trade Policy, 2004-09, the Central Government hereby makes the following amendments in Schedule-I (Imports) to the ITC (HS) Classifications of Export and Import Items, 2004-09: 1. The Policy

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value is US$ 50 and above per square meter 6810 19 Other: 6810 19 10 Cement tiles for mosaic Free However, import of rough blocks and slabs of agglomerated / artificial stones shall be restricted. Import of processed tiles /slabs of agglomerated / artificial stones shall be permitted freely, provided cif value is US$ 50 and above per square meter. 6810 19 90 Other Other articles : Free However, import of rough blocks and slabs of agglomerated / artificial stones shall be restricted. Import of processed tiles /slabs of agglomerated / artificial stones shall be permitted freely, provided cif value is US$ 50 and above per square meter. 6810 91 00 Prefabricated structural components for building or civil engineering Free However, import of roug

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Provisions relating to export and import of goods and services, shall come into force w.e.f. 01/04/2008

DGFT – 70 (RE-2008)/2004-2009 – Dated:- 8-12-2008 – Provisions relating to export and import of goods and services, shall come into force w.e.f. 01/04/2008 NOTIFICATION No. 70 (RE-2008)/2004-2009 DATED 8th December, 2008 S.O.(E) In exercise of powers conferred by Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 read with paragraph 1.3 of the Foreign Trade Policy (FTP), 2004-2009, as amended, the Central Government hereby makes the following amendments in FTP, 2004-2009 (R

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Import policy amended for Import of Articles of cement, of concrete or of artificial stone, whether or not reinforced Tiles, flagstones, bricks and similar articles

Commentaries / Editorials – Dated:- 20-9-2008 – Vide notification no. 41(RE-2008)/2004-09 dated 18-9-2008, Import policy relating to Articles of cement, of concrete or of artificial stone, whether or not reinforced Tiles, flagstones, bricks and similar articles amended. The amended export policy is under: Chapter 68 of ITC – HS code – Import Policy 6810 Articles of cement, of concrete or of artificial stone, whether or not reinforced Tiles, flagstones, bricks and similar articles : Building blocks and bricks: 6810 11 Building blocks and bricks : 6810 11 10 Cement bricks Free However, import of rough / unprocessed blocks and slabs of agglomerated / artificial stones shall be restricted. Import of processed tiles /slabs of agglomerated / art

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ough / unprocessed blocks and slabs of agglomerated / artificial stones shall be restricted. Import of processed tiles /slabs of agglomerated / artificial stones shall be permitted freely, provided cif value is US$ 50 and above per square meter. Other articles : 6810 91 00 Prefabricated structural components for building or civil engineering Free However, import of rough / unprocessed blocks and slabs of agglomerated / artificial stones shall be restricted. Import of processed tiles /slabs of agglomerated / artificial stones shall be permitted freely, provided cif value is US$ 50 and above per square meter. 6810 99 Other : 6810 99 10 Concrete boulder Free However, import of rough / unprocessed blocks and slabs of agglomerated / artificial s

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Assam Roller Flour Mills Association and Ors. Versus State of Assam and Ors.

2008 (9) TMI 1012 – GAUHATI HIGH COURT – TMI WP No. 5491/2001 Dated:- 12-9-2008 – Jasti Chelameswar, C.J. And Amitava Roy, J. JUDGMENT Amitava Roy, J. 1. This batch of writ petitions register an identical challenge to the constitutional validity of Section 3D, 3E, Clause (ii) and (iii) of Explanation-1 to Section 21 as well as Section 21(1), 21(2), 21(3), 21A, 23 and 25(xiii) of the Assam Agricultural Produce Market Act, 1972 as amended by Assam Agricultural Produce Market (Amendment) Act, 2000 and the Assam Agricultural Produce Market (Amendment) Act, 2006 with the consequential relief of refund of the cess collected thereunder by the respondents together with the interest @ 15% thereon for the period 13.08.2001 to 08.12.2005 and till such time the same is exacted from the petitioners. 2. The contextual facts though vary minimally, the spectrum of assailments being strikingly common in the cases, these petitions were analogously heard and this adjudication w

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pugned legislations, before venturing into the thick of the impeachment need be made. 5. The petitioner in WP(C) No. 5491/ 2001, Assam Flour Roller Mills Association is a registered association of roller flour mills situated throughout the North Eastern Region of the country and represents to espouse the collective interest of such mills and thus claim to be competent to air their grievances to protect and enforce the constitutional and legal rights of their members who are engaged in producing flour (Maida), Semolina (Suji), Atta, Whole meal Atta and Wheat bran by manufacturing those in their respective units. The wheat for manufacturing the aforesaid products, is purchased by the members of the association from several states in North India namely, Punjab, Haryana and Uttar Pradesh. The products purchased are made by paying market cess to the Market Committees of the respective places and thereafter the goods are dispatched to Assam by road and/or rail at the risk of the members/c

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ning of the Assam Agricultural Produce Market Act, 1972 as amended (hereafter referred to as the 'Act') and no cess under the Act is leviable thereon. Further, the said goods are transferred to its unit at Jorhat from those at Kanpur or Ahmedabad and since the same are purchased by it at those places, no cess under the Act can be levied at Jorhat or any other place in Assam. 7. The petitioner in WP(C) No. 1794/ 2001and 5775/2006, M/s. Shalimar Chemical Works Limited is a company registered under the Companies Act, 1956 with its registered office at Kolkata in the state of West Bengal and branch offices amongst others at Guwahati in the District of Kamrup, Assam. It has maintained that it inter alia is engaged in the business of manufacturing, marketing and selling of coconut oil under its registered brand or trade marks Shalimar Coconut Oil , Rajat Coconut Oil and Shalimar Mustard Oil and spices under the brand name Shalimar Chef Spices . It is a registered dealer unde

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respondent Board has been imposing and collecting market cess at Boxirhat and/or Sri Rampur Check Gate as soon as the goods enter the state of Assam in course of transit by road while proceeding to the petitioner's office/godown at Rehabari and Beltola at Guwahati from its factory and Head office at Hyderabad/Kolkata. The petitioner has further alleged that the respondents collect cess from it for the second time at its office at Rehabari and its godown at Beltola while the goods are in the process of transportation to their various dealers and distributors within the State. 8. The petitioner in WP(C) No. 7082/ 2001, M/s Gopiram Chetram though has projected itself to be a proprietorial concern with its place of business at Chirang Bazar at Tinsukia it has not disclosed the particulars of its business and the transactions relating thereto for which the market cess under the Act it being realized from it. 9. The petitioner in WP(C) No.8462/ 2001, Sri Kundanlal Sharma, Proprieto

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unauthorized. 10. The petitioner in WP(C) No. 2301/ 2001, M/s. Potato and Onion Merchant Association, Guwahati is an association of members engaged in the import and whole sale business of Potato, Onion and Garlic. While contending that the association represents the collective interest of its member traders, it has asserted that the aforementioned agricultural produces are purchased from various markets outside the State of Assam, namely, West Bengal, Bihar, Uttar Pradesh etc., whereafter those are dispatched by traders of other States on commission basis to the members of the petitioner association. While purchasing those produces at different markets beyond the State of Assam, the members pay market cess to the concerned market committees of those markets and thereafter the consignments are dispatched to Assam by road and rail at the risk and cost of each consignee. The consignments are insured in the name of the consigners till the actual delivery thereof is made to the consign

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by designing Rule 21(7) so much so, that it was beyond the scope of the parent legislation. As, this led to random collection of cess by the respondent Board, vires of Rule 21(7) of the Rules was challenged by M/s. Assam Roller Flour Mills Association [petitioner in WP(C) No. 5491/2001] in WP(C) No. l453/ 1998 before this Court. By judgment and order dated 29.09.1999, the petition was partly allowed adjudging Rule 21(7) to be ultra vires. The learned Single Judge, however, left the other counts of impugnment undecided. 12. Being aggrieved, the petitioner, namely, Assam Roller Flour Mills Association, preferred Writ Appeal No. 378/1999 in respect of the reliefs unattended. The respondent Board as well as State Government also preferred separate appeals being Writ Appeal No. 392/1999 and 39/2000 respectively challenging the determination, vis-a-vis, the vires of Rule 21(7) of the Rules. During the pendency of these appeals, a learned Single Judge of this Court by order dated 17.8.1

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the scope of presumption by providing number of other factors beyond its legislative competency? (ii) Whether the Assam Agricultural Marketing Board (for short the Board ) has power to collect levy and cess of the agricultural produce in the market area as per Section 21 of the Act merely on the basis of Resolution adopted by the Board? (iii) Whether the Board and its employee are justified and empowered to realize cess on the agricultural produce at different Check-Gates on the National Highway in Assam, particularly erected at Srirampur, New-Guwahati, Jagiroad, Jorhat, Titabor Dergaon for such purposes? (iv) Whether the Respondents State Government may be directed to refund the cess already realized by it? By judgment and order dated 4.4.2001, the Full Bench decided the aforesaid question Nos. (i), (ii) and (iii) in favour of the petitioner holding Rule 21(7) to be ultra vires the Act and that the Board had no authority to levy and collect cess at Srirampur Check Gat

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ry. 16. On the prayer made by the petitioners in the pending petitions for updating the challenge in view of the Act, 2006, the same was allowed. WP(C) No. 2301/2007, then joined the fray. It would be expedient to note at this stage the relief's prayed for in the writ petitions which as alluded hereinabove are identical: a writ in the nature of mandamus or any other appropriate writ or directions or orders should not be issued to strike down the following provisions of the enactment inserted by the Assam Agricultural Produce Market (Amendment) Act, 2000 and Assam Agricultural Produce Market (Amendment) Act, 2006. (i) Sub-Sections (3D) and (3E) of Section 8 of the Assam Agricultural Produce Market (Amendment) Act, 2000, whereby a provision has been made for all the Market Committees to contribute 50% of its annual gross income under the Act to meet the expenses of establishment of the Board; (ii) Section 13 of the Assam Agricultural Produce Market (Amendment) Act, 2000,

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Act, which contains in general terms the power of the Board to entrust any matter to the Market Committees. (vii) Sub-Section (5A) of Section 7 of the Assam Agricultural Produce Market (Amendment) Act, 2006, which provides for sale of specified agricultural produce at private market yards. (viii) Sub-Section (5B) of Section 7 of the Assam Agricultural Produce Market (Amendment) Act, 2006 which provides for establishment of private market yards and direct purchase of agricultural produce from agriculturist. (ix) Sub-Section (5C) of Section 7 of the Assam Agricultural Produce Market (Amendment) Act, 2006 which provides for establishment of consumer/farmer market (direct sale by the producer). (x) Sub-Section (5D) of Section 7 of the Assam Agricultural Produce Market (Amendment) Act, 2006, which provides for grant/renewal of registration. (xi) Section 10 of the Assam Agricultural Produce Market (Amendment) Act, 2006 whereby Section 21 of the Principal Act has been amended b

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f records may be pleased to make the Rule absolute and further declare that in total absence of quid pro quo the realization of the Cess by the Board and the Market Committees are illegal and the realization of Cell to be stopped forthwith and/or may pass such further or other order/orders as Your Lordships may deem fit and proper in the facts and circumstances of the case. 17. The petitioners in unison, have with reference to Section 3D, 3E, 21, 21(A), 23 and 25 of the Act, have contended that the same are subversive of the objectives thereof. According to them, the market fee levied by the Market Committee, is sought to be treated as the income of such committees, a concept violative of the very purpose of the Act. Though, under the legislation, the fee realized, is required to be spent for the purposes contemplated by the Act, the purport whereof, is to provide necessary infrastructure and facilities thereby necessitating the existence of quid pro quo between the impost and the s

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to the Marketing Board Fund, would not be expended for the development of the market but would be diverted for purposes alien to the objectives of the Act, as is already being done. The enhancement of the rate of market fee from ₹ 1 to ₹ 2 has been assailed as excessive and arbitrary in absence of any service being rendered to the traders and farmers involved in the transactions. Apropos Section 21 of the Act, the petitioners have contended that the legal fictions introduced thereby, are not only out of context but have no nexus whatsoever with the sale or purchase of the agricultural produce in the market area. Though, no sale or purchase takes place within the area of Assam, the respondent Board has been levying and collecting market fee at the check gates on the basis of these legal fictions, which are thus ultra vires the Act. The validity of Section 21Ahas been impugned contending that in absence of any guidelines, the employees of the Market Committees and the Boa

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on the National Highway of the State without any authority of law and further to perpetuate such illegalities for all times to come. Section 21(2), authorizing the Board to set up composite check posts on behalf of the any or all marketing committee(s), has been questioned to be contrary to the other provisions of the Act and the general scheme thereof. According to the petitioners, Sub-section 5(A), 5(B), 5(C) and 5(D) of Section 7 are also antithetical to the framework of the principal Act, which does not envisage setting up of principal market yard by a private person or a group of persons. Relief's prayed for, have consequentially been oriented on the above assailments. 19. The State of Assam, in its affidavit, has questioned the maintainability of the writ petitions on the ground that the same precipitate disputed questions of facts bearing on the actual place of sale or purchase, state of the goods involved, nature of consumption thereof etc., which this Court in the exer

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ss on agricultural products bought and sold in the declared market areas and the traders including the petitioners, have been purposefully resorting to wasteful litigations on one pretext on the other to evade the said impost. 20. It has been averred that the Act, 2000, has occasioned amendments to facilitate a balanced development of the agricultural marketing system all over the country and to streamline the functioning of the Board, vis-a-vis, the market committees and to regulate their activities pertaining to agricultural marketing in order to make them more effective. This has also been made with a view to provide better benefits to the market functionaries in general. The answering has respondent maintained that Section 21A had been inserted to specifically provide for establishment of check gates at different points to prevent evasion of cess. While affirming that Section 21 of the Act (as amended), has introduced a deeming provision to make certain transactions exigible to

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ing satisfactorily to achieve the contemplated purposes thereof. It has been emphatically averred that the market fee is levied in the market area only once and there is no multiple levy thereof. It has been contended in this context that payment of market fee to a Market Committee of a different State, is wholly irrelevant for the levy of cess under the Act, which is permissible once a transaction involving an agricultural produce satisfies the prerequisites of being 'bought or sold in the notified market area. 21. The State has claimed that the Act, 2006, had been enacted in alignment with the draft model legislation titled the State Agricultural Produce Marketing (Development and Regulation Act) 2003 (hereafter for short referred to as the 'Model Act 2003'), codified by a Committee set up by the Ministry of Agriculture, Government of India. The model legislation was drawn up to ensure nation wide integration of agricultural market facilities, establishment of competi

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es and the service rendered to the establishment envisaged by the Act. The answering respondent has emphasised that the cess collected, is being utilized wholly for authorized purposes as prescribed by the Act. 22. The Board, while generally ratifying the pleaded stand of the State, has underlined that the object of a market, as conceptualized by the Act, is to facilitate marketing activities by providing fair opportunities both to the buyers and sellers to strike a bargain and complete the deal, the primary purpose thus being to stifle unfair business and facilitate fair transactions. The legislation, thus, authorized the State to efficaciously intervene by regulating market practices and ensuring that the buyers and purchasers perform their functions strictly inconformity with the prescribed rules of behaviour. As the sale of agricultural produce involves a number of activities, such as assembling, storing, grading, weighment, standardization, transport and financing, the individu

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8'), following the recommendations of the High Powered Committee on agricultural marketing and study of the marketing Regulations and Acts of different States, to remove disparities therein and to bring forth their useful implementation. The answering respondent insisted that the purpose of the Model Act, was to provide guidelines for the different States to make appropriate provisions in the respective enactments, so as to facilitate a balanced development of the Agricultural Marketing System all over the country through coordinated implementation of the relevant legislations. Inconformity with the said guidelines, the Government of Assam occasioned amendments to the Principal Act for which Act 2000 was enacted. In the meantime, the Board being aggrieved by the judgment and order dated 04.04.2001 of the Full Bench of this Court, had preferred a Special Leave Petition before the Apex Court, registered as Civil Appeal No. 3969/2001, wherein, by order dated 13.08.2001, the operation

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li, is wholly unfit for human habitation with no link road. According to the answering respondent, ample facilities for development of markets in almost all the declared market areas, have been provided. It has been contended that the fees collected by way of market cess under the Act and the Rules, are regulatory in nature, hence the doctrine of quid pro quo, is not applicable, so much so that service to the individual contributors is not an essential precondition for the validity thereof. As under the Act and the Rules, the Board is required to perform various functions, which include supervision and imposition of penalty on the defaulter traders, those are regulatory in nature and its actions pursuant to the objectives of the Act, demonstrate a direct nexus between the realization of the fees and the service rendered to the infrastructure generally. The Board has reiterated that the edificial works and market developing facilities, which require major investments, have been successf

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s the end objective of the legislation is to protect the growers of agricultural produce from exploitation in the hands of dealers and to prevent distress sale at a lower price, provisions for transport of agricultural produce, dissemination of information about improved, techniques in cultivation, supply of agricultural essentialities etc., comprehended within the scheme of the Agricultural Development Fund, cannot be stated to be beyond the purview of the Act. The answering respondent also defended the hike in the rate of the cess on agricultural produce bought or sold in the market from rupee 1 to rupees 2 on account of rise in the price index since the enactment of the principal Act. While denying the allegations that the amendments have been effected to render ineffective the judgment of the Full Court, the Board has insisted that the same in fact, have been introduced in compliance of the said decision. The Board has maintained that the legal fictions introduced by the explana

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rpose of the legislation being similar to the Model Act, 1998 with updated provisions for meeting the growing situational demands pertaining to creation, sustenance and administration of agricultural markets in the national perspective. The Board has insisted that the Act 2006, has been codified to promote the development of agricultural markets and the relevant agricultural schemes of the Government of India and to streamline its functioning and the Marketing Committees in order to make them more effective. The allegation that the Act 2006, had been enacted to nullify the judgment and order of the Full Bench, has been denied. The plea that this legislation is contrary to the principal Act, has also been repudiated. The Board has claimed that it being the apex authority having deep and pervasive control over all the Market Committees, Section 21 of the Act, as amended by Act, 2006, empowering it to levy and collect cess for any or all such Committees with retrospective effect i.e. 03.0

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rated in the schedule include not only the produces specified, but also the processed and non processed versions thereof. The answering respondent therefore has maintained that the petitioner's plea against imposition of cess upon Shalimar and Rajat Coconut oil manufactured by it as well as on Shalimar Chef Spices is unfounded. According to the Board, the petitioner's business particulars as discernible from the writ petition establish that the goods involved are delivered at Guwahati from Hyderabad and Calcutta in terms of some agreement in existence between the consignor and the consignee and that therefore, its (petitioner) representation that such transactions are in the nature of stock transfer only is factually incorrect. It has been asserted that in its application the Act is not limited only to the market yards established thereunder, but also extendable to the entire market area declared as such. It has been clarified that the entire Guwahati Sub Division has bee

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the operation of the check gates contending that the Act and the Rules have provided elaborate measures to deal with the relevant sections bearing thereon. The Board in order to buttress its claim of providing the necessary infrastructural facilities in different market areas has also disclosed the facts and figures relating to the incentives doled out to the growers and agriculturists including free distribution of seeds, fertilizers, agro equipments and initiatives for familiarizing and updating the growers with the essential informations relating to market transactions, market prices, market facilities, market information etc. The Board asserted that inspite of the enhancement of the rate of cess from Re. 1/- to ₹ 2/-, the same in fact is being realized at the earlier rate. While emphasizing that check gates in terms of Section 21A of the Act have been erected in different places in the market areas to check evasion of cess in the State of Assam, the Board has averred that re

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on by the officials of the Board are wholly impermissible. The learned Senior counsel referred to the Act 2006 amending inter alia Section 21 permitting the Board to collect cess in the eventualities referred to therein to submit that as the amendments enacted thereby have been given a retrospective effect on and from 03.09.1974 before the date on which the principal Act had been come into force, the same are ineffectual and inoperative. In that view of the matter as well, Mr. Mishra urged that the collection of cess by the officials of the Board in purported exercise of powers under Section 21(2) of the Act as amended is, per se, wanting in authority and tantamounts to illegal realization. Turning to the legal fictions introduced by the Explanation to Section 21 of the Act as amended, Mr. Mishra argued that the same are not sustainable in law as those seek to outreach the eventualities envisaged. As no perceptible correlation between the legal fictions and any of the intrinsic attribu

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icle 254(2) of the Constitution of India read with the proviso to Sub-clause (3) thereof, no sale by a legal fiction under the Act contrary to the scheme of the Central Statute is legally conceivable. Mr. Mishra sought to rest his submissions on this issue by relying on the following decisions- 1.[1955]1SCR799 , Zaverbhai Amaidas v. State of Bombay. 2. Bengal Immunity Co. Ltd v. State of Bihar and Ors. 3. Ch. Tika Ramji and Ors. v. State of Uttar Pradesh and Ors. 4. Deep Chand and Anr. v. State of Uttar Pradesh and Ors. 5. Sri Krishna Coconut Co. and Ors. v. East Godavari Coconut and Tabacco Market Committee. 6. Deputy Commercial Tax Officer, Saidapet, Madras and Anr. v. Enfield India Ltd. Co-operative Canteen Ltd. 7. S. Sundaram Pillai and Ors v. P. Lakshminarayana Charya and Ors. 8. Agricultural Market Committee v. Shalimar Chemical Works Ltd. 9. Kaiser-I-Hind Pvt. Ltd. and Anr. v. National Textile Corporation (Maharashtra North) Ltd. and Ors. 10. Union

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efore conceptually alien to the lay out of the Act. The respective roles of the committees and the Board having been otherwise clearly de-alienated in the Act and the functions of the latter being manifestly supervisory, the impugned amendments which authorize it to collect cess in the absence of provisions akin to those existing for the Market committees, are irreconcilably discordant with the framework of the Act and are thus unconstitutional. Mr. Mishra argued that the retrospective empowerment of the Board on the conditions therefore at this distant point of time demonstrates the absurdity and illogicalness of the impugned amendments rendering the same invalid. To buttress his arguments, the learned Senior counsel placed reliance on the decision of the Apex Court in AIR 2005 SC 2821 , Ashok Lanka and Anr v. Rishi Dixit and Ors. The learned Senior counsel argued that the enhancement in the rate of cess is exorbitant as well as impermissible in absence of quid pro quo. Referring t

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of Bihar and Ors. 9. Indian Stainless Ltd (2) Anr v. State of Haryana and Ors. Various excerpts from Constitutional law by Seervai-4th Edition were also referred to. 29. Mr. Mishra with reference to the pleadings of the Board argued that it is apparent therefrom that it (Board) dominantly discharges governmental functions and applies the cess collected for purposes not contemplated by the Act and on that count as well, the conferment of power on it to realize the levy is subversive of the principal enactment. Reiterating that no service at all is being rendered by the Board as required by the Act, Mr. Mishra has urged that the check gates established in the purported exercise of power under Section 21A are unauthorized as well in absence of any approval by the State government. With specific reference to the pleadings in WP(C) No. 5776/2006, the learned Senior counsel argued that as coconut oil and powdered spices are not specified agricultural produces listed in the sch

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o sustain his arguments referred to the following decisions of the Apex Court: – 1. [1959] 1 SCR 379 , The State of Madras. v. Gannon Dunkerley Co. (Madras) Ltd. 2. AIR 1985 SC 1394 , Gram Panchayat of Village. v. Malwinder Singh and Ors. 3. (2004) 1 SCC 320, M.P.A.I.T. Permit Owners Assn. and Anr. v. State of M.P 4. Dharappa. v. Bijapur Coop. Milk Producers Societies Union Ltd. Mr. Sahewalla, on the aspect of legal fiction relied on the following decisions of the Apex Court: 1. [1968] 2 SCR 421 , Deputy Commercial Tax Officer, Saidapet, Madras and Anr. v. Enfield India Ltd. Cooperative Centeen Ltd. 2. AIR 1967 SC 973, Sri Krishna Coconut Co. and Anr. v. East Godavari Coconut and Tabacco Market Committee. 3. Mancheri Puthusseri Ahmed and Ors. v. Kuthiravattam Estate Rechiver. 4. K. Prabhakaran v. P. Jayarajan. 5. Maruti Udyog Ltd. v. Ram lal and Ors. 6. Bijender Singh v. State of Haryana and Anr. While reiterating that the Board by the amended Sect

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exercise of powers conferred by a statute does not necessarily invalidate the legislation, he urged. The learned Sr. Counsel emphasized that considering the nature of the impeachment made in the case in hand, no specific assailment to the constitutional validity of any of the provisions of the Act as amended is discernible. As the Act 2000 had been enacted before the Full Bench had rendered its verdict, no legislative malice is attributable as well. Mr. Banerjee maintained that in any view of the matter, with the amendments heralded by the Act 2000, the rendering of the Full Bench has no decisive bearing on the issues now raised. The decisions of the Apex Court in Amrit Banaspati Co. Ltd. v. Union of India and Ors. [1995] 2 SCR 25 , Government of Andhra pradesh and Ors. v. Smti. P. Laxmi Debi AIR 2008 SC 1640 were relied upon to reinforce the above proposition. Mr. Banerjee argued that Section 21 of the Act as amended is neither extra territorial nor prescriptive of an irrebuttable

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e assailment on the basis of solitary or stray transactions is clearly fallacious. He further argued that as retrospectivity of a validating law is legally permissible to remove the basis of any legislation on which an earlier decision of a Court is founded, the retroactive operation of Section 21(2) of the Act as sanctioned by Act 2006 is unassailable. It was therefore urged that its retrospective effect on and from 3/9/1974 does not defile the validity thereof as the principal Act in fact existed on the statute book on that day. In the alternative, he insisted that as Section 21(2) would even otherwise be enforceable from the date of commencement of the principal Act, the plea against the vires thereof on this count is obviously flawed. The learned Sr. Counsel to sustain his arguments relied on the following decisions. East End Dwellings Co., Ltd. v. Finsbury Borough Council (1951) 2 AER 587, British India Corporation Ltd. v. Market Committee, Dhariwal and Anr. [1983] 2 SCR 159 , Sta

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tenable. The learned Sr. Counsel repelled the assailment on the ground of want of quid pro quo contending that the petitioners are estopped from pursuing it in the instant proceedings, the Full Court having implicitly rejected the same leaving it unanswered in the earlier round of litigation. Mr. Banerjee argued that the plea questioning the hike in the rate of cess is also untenable as the related amendment only enacts an outer limit of the enhancement though in fact realization at the pre-amendment rate is in vogue till date. Without prejudice to the above, the learned Sr. Counsel argued that as the cess collected under the Act is in the nature of a composite fee, with regulatory and service constituents, no quid pro quo necessitating service to the individual payers is envisaged in law to render the levy valid and, therefore the grouse raised in this regard is misconceived. Referring to Section 21(2) of the Act as amended, Mr. Banerjee urged that conditions precedent for the Board t

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g the provisions of the said statute as amended or claim refund of the cess collected from them. Mr. Phukan insisted that as no assailment on Explanation (1) to Section 21 of the Act has been laid, challenge to Explanation (2) and Explanation (3) is per se not tenable. While endorsing the retrospective amendments of the Act, the learned Advocate General repudiated the contrasting arguments pleading that as the present proceedings are not in the nature of public interest litigation, no contention as raised therein by an insignificant group of traders administering their business without complying with the prescriptions of the legislation ought to be entertained. The following decisions were cited by the learned Advocate General Kewal Krishan Puri and Anr. v. State of Punjab and Anr. [1979] 3 SCR 1217 , Bhagwan Das Sood v. State of H.P. and Ors., Shalimar Chemical Works Ltd. AIR 1997 SC 2502 , S.D. Soni v. State of Gujarat 1991 CriLJ 330 , Dahiben Widow of Ranchhodji Jivanji and Ors. v.

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, legal fiction for exaction of market Cess etc., we do not feel persuaded to non-suit the petitioners on this count. True it is that a presumption of constitutionality of an enactment ought to be the starting premise and that if two views are possible, the one in favour of its sustenance ought to be preferred, it is at best a caveat to inform the process of assaying the grounds of impeachment thereof. While respectfully subscribing to the observations recorded in Government of Andhra Pradesh and Ors. v. Smti P. Laxmi Devi AIR 2008 SC 1640 , reiterating the view expressed in Amrit Banaspati Co. Ltd. [1995] 2 SCR 25 , wherein a greater latitude was acknowledged for legislations on fiscal or tax measures, we construe it expedient having regard to the multifaceted challenges projected in the present batch of petitions to deal with the same on merits. As the issues raised transcend beyond, mere possibility of abuse of powers under the impugned enactments, we are unable to sustain the plea

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rt in Bhagawan Das Sood (Supra), in the context of the legislation involved, though, ruled that a trader or dealer comprehended therein, is under an obligation to obtain licence thereunder, did not lay down any proposition that failure to do so, would disentitle him to lay a challenge to a levy thereunder, otherwise available to him in law. 36. We propose hereafter to deal with the various contentions bearing on the amendments of the Act. The Act as its preamble discloses is a legislation to provide for better regulation of buying and selling of agricultural produce and the establishment of market for agricultural produce in the State of Assam and for matters connected therewith. The objects and reasons of this enactment as published in the issue dated 21.07.1992 of the Assam Gazette are extracted as hereunder: The object of a market is to facilitate the marketing activities by providing fair opportunities both to the buyers and the sellers to strike bargain and to complete trans

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s to be given not only better facilities and disposal of his produce in a well established regulated market, but also proper help and advice with regard to the grading and standardization as well as adequate storage facilities and financial assistance to improve his staying power. The implementation of the provisions of the various schemes of agricultural improvement and recommendation of the Government of India from time to time for effecting the above improvements demand the establishment of Regulated markets. The plan for regulation of market may, therefore, be said to be an integrated plan which intends to effectively link the various stages of marketing thereby brings benefit to the agriculturists. A brief reference of the salient aspects of the challenge raised in the earlier round of litigation would not be totally out of place before we venture into to the emulous debate on the constitutional validity of the impugned amendments. 37. Section 21 of the Act as it stood prior

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agricultural produce is weighed in the said area; or (i) if in pursuance of the agreement of sale or purchase, the agricultural produce is delivered in the said area to the purchaser or to some other person on behalf of the purchaser. Though, Explanation-I of unamended Section 21 clarified that for the purpose thereof, all notified agricultural produce taken out or proposed to be taken out of a market area would, unless the contrary is proved, be presumed to be bought or sold within the said area, Rule 21(7) was construed to have unauthorizedly widened the scope of the aforementioned explanation and thus ultra vires the Act. Exception was also taken to the levy and collection of cess by the Assam Agricultural Marketing Board (for short the 'Board') under the Act. As per Section 21 thereof, in absence of any statutory empowerment in that regard, a vociferous demur was raised as well on realization of cess on agricultural produce at the different check gates on the National

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uled that the Board or its employees had no power to levy and collect cess on the agricultural produce in terms of Section 21 of the Act. It was of the view that the Board or the Market committee had no authority to levy and collect cess at various check gates located in the State of Assam though the area was declared as Market area. This was in the face of its conclusion that no sale or purchase used to take place in any market area where check gates were erected for the purpose of levy and collection of cess on the agricultural produce. It however, declined the prayer for refund of cess already collected, but injuncted further realization of cess at different check gates on the National Highway. In Civil Appeal 3969/2001 preferred by the Board before the Apex Court, it by its order dated 13.08.2001 stayed the operation of the judgment of the Full Bench on the condition that the amount collected would be refundable in the event of dismissal of the appeal would have to be paid back

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eal with the observation that any amount which might have been collected by the Board during the pendency thereof would be subject to the out come of the writ petitions, questioning the validity of the amendments by Act, 2000 and 2006. The whole gamut of the issues presently raised therefor, need a scrutiny anew in the consequential changed perspective. 40. The Act, 2000 which received the assent of the President of India on 29.12.2000 and published in the issue dated 30.1.2001 of the Assam Gazette Extra Ordinary, inter alia, amended Section 21 of the Act following which it wore the following complexion: 21. Every market Committee shall levy and collect a cess on the agricultural produce bought or sold in the market area at a rate not exceeding [two rupees] for every one hundred rupees of the aggregate amount for which a [specified agricultural produce] is bought or sold ,whether for cash or for deferred payment or other valuable considerations. Provided that no cess will be l

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es. The expression' notified agricultural produce' was replaced by 'specified agricultural produce 'and most importantly sub Clause (i) and (iii) of Sub-rule 7 of Rule 21 (now amended by Rule, 2003), were integrated as Clause (ii) and Clause (iii) in Explanation-1. Thereby the legal fiction of sale or purchase as contemplated in the aforementioned clause of Rule 21(7), were engrafted in the above Explanation of Section 21 of the Act resultantly generating the polemics on legal fiction. Before embarking on the analysis the essential features of the various clauses to the Explanation-1, expedient it would be to traverse the authorities cited at the Bar in this regard. 41. In Bengal Immunity Co. Ltd. (supra), a Constitutional Bench of the Apex Court while dealing on the validity of a demand of sales tax made under the Bihar Sales Tax Act on a non resident dealer in respect of inter state sale or purchase of goods ruled that the legal fictions are created only for som

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.e. one transaction resulting in buying on one hand and selling on the other to another. The legislative intendment therefore was accorded a primacy to elicit the true import of a statutory provision. 43. In Deputy Commercial Tax Officer (supra), the Apex Court, in essence, propounded that a legislature, in absence of an element of transfer of property from one person to another in any transaction, cannot treat it as a sale by a deeming clause and bring it within the ambit of the taxing statute. 44. Elaborating in this regard in K. Prabhakaran (supra), the Apex Court elucidated that a legal fiction presupposes the existence of the state of facts which may not exist and then work out the consequences which flow therefrom. The consequences, however, have to be worked out only to their logical extent having due regard to the purpose for which the legal fiction had been created. Stretching the consequences beyond what logically flows would amount to an illegitimate extension of the p

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an imaginary state of affairs as real , one must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that one must imagine a certain state of affairs. It does not say that, having done so, one must cause or permit one's imagination to boggle when it comes to the inevitable corollaries of that state of affairs. 48. The decision in Sundaram Pillai (supra), was offered to accentuate that the role of an explanation added to a statutory provision is not a substantive provision in any sense of the term but is merely to explain the meaning and the intendment of the Act and to provide necessary clarification in case of obscurity or vagueness of the enactment so as to make it consistent with the dominant object which it seems to subserve. Their Lor

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tion. The legal fiction thus comprehends a licit supposition of eventualities, which may or may not exist to achieve a legislative purpose. A court on the discernment of the objective, can permissibly infer the existence of hypothetical state of affairs and all conceivable consequences and corollaries logically ensuing therefrom. A purposive construction of the legal fiction needs to be adopted to achieve the legislative goal, the only constraint being that thereby the purpose of the fiction ought not to be stretched beyond the intended. The statutory purpose of the legal fiction, axiomatically is the controlling determinant, all other assumptions of relevant facts subsisting or not, to attain the same, being allowable. The significance and essentiality of a legal fiction being to fructify some legislative end, it ought to be permitted a full play subject to the restraint of unintended extension thereof annihilating the very objective of its creation. Section 21 of the Act author

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ncies referred to in the three Clauses infer the existence thereof and seek to complement the same. The events, namely agreement of sale or purchase, delivery of the produce involved and the movement thereof as a consequence, can by no means be dismissed as features totally alien to a transaction of sale or purchase as known in law. Having regard to the marked proliferation of such transactions in the recent times, the fiction understandably at the first instance seeks to relieve the Market Committee or the Board as the case may be of the seemingly impracticable task of stalking each and every transaction effected in the notified area and instead furnishes an option to the person concerned to dislodge the presumption of deemed sale or purchase. The legal fiction obligates the traders/dealers to be scrupulously vigilant and law compliant. Indubitably, they are obliged to pay the cess, if realizable in law. There is no scope to presume that the levy would be exacted even if not payable.

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e agricultural marketing system of the country through uniform implementation of the agricultural produce marketing Acts. The legal fiction understandably seeks to cater to a mandate of national consensus in agricultural marketing system. The challenge to the amendment in Explanation I of Section 21 by the Act 2000 on this count therefore does not commend to us for acceptance. 49. We next turn to the contentious issue on quid pro quo and unauthorized creation of funds from the collections and expenses therefrom. According to the petitioners, levy of market fee inheres in it the essence of quid pro quo between the impost and the services rendered to the payers thereof. They have allege that though the Act had been enforced from the year 1974, no market yard and/or sub-yard has yet been constructed and consequential necessary facilities associated therewith have not been provided. They have maintained that the respondents have only resorted to purchase and construction of expensive gu

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plated by the legislation nor is it within the realm of services to be rendered thereunder and such expenditures being relatable to other sovereign functions are wholly unauthorized. The enhancement of the rate of the market fee from Re. 1/- to ₹ 21/- has been questioned to be excessive and arbitrary in the face of the failure to render any services to the traders and farmers as mandated by the Act. According to the petitioners, this quantum leap has been necessitated by the requirement of contribution towards Agricultural Development Fund for augmenting the agriculture sector wholly unrelated to the services to be extended under the enactment. While generally denying the above assertions, the respondent Board in its affidavit has contended that the plea founded on quid pro quo having been raised before the Full Court but left unanswered, the same ought not to be entertained a fresh being barred by the doctrine of res judicata. It maintained that the arrangement for contribution

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o is not applicable. It has asserted that having regard to the above nature of the impost, extension of service is not a condition precedent. In any view of the matter, services required to be rendered by the Collecting Authority need not be qua the contributors alone and it would suffice if a system in general is benefited thereby. The Board dismissed the apprehension of the petitioners of any inappropriate expenditure of the cess collected. Having denied that Section D of the Act is vitiated by a lack of legislative competence, the Board has insisted that the facts and figures furnished with its affidavits regarding establishment of markets yards and sub-market yards would demonstrate that effective steps not in contemplation but in reality have been taken and that schemes related thereto have been activated. Supporting the levy, the Board has pleaded that while conferring some special benefits on the licencees, it is permissible to render services in the market in the general int

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price index over the years for which it is in pressing need of funds for the works required to be administered by it under the Act. According to the Board, the escalation in price of the commodities is of financial benefit to the licencees and the marginal raise in the rate is not at all oppressive. 50. In its additional affidavit, the Board has insisted that in addition to the creation, development and maintenance of market and market infrastructures, it has been extending suitable benefits to the growers and farmers from time to time amongst others by providing free distribution of pesticides, fertilizers, agro-equipments requiring huge investments. It has also promoted its information network for wide publicity for welfare of traders and other market functionaries in general inter alia by publishing monthly market news bulletin titled Krishi Bipanan Tathya Setu which aims to reflect all activities of the Board and the Regulated Market Committees by publishing daily market pric

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he Bombay Public Trusts Act, 1950 and the Rules 32 and 33 of the Rules framed thereunder was impeached being beyond the powers of the State Legislature. In responding to the emerging debate as to the actual nature of the impost, the Apex Court enunciated the distinctive features between a tax and a fee. While a tax was comprehended to be a compulsory exaction of money by a public authority for a public purpose enforceable by law and not a payment for any specific service rendered, a fee was identified to be a charge for a special service rendered to individual by the Government or some other agency like a local authority or statutory Corporation. The levy of tax was held to be meant for the purpose of general revenue which when collected forms part of the public revenue of the State but the amount of fee levied was supposed to be based on the expenses incurred for rendering the services. It was held that in case of a fee, no account is taken of the varying abilities of the recipients o

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ct, 1961, and the Rules framed by the State of Punjab and Haryana thereunder as well as the validity of the fixation of market fees from time to time. While dwelling on the characteristic attributes of fee their Lordships initiated the narration by defining it to be a charge for a special service rendered to individuals by some governmental agency. It was propounded therein that the special services rendered must be to the payer of the fee and the element of quid pro quo must be established between the payer of the fee and the authority charging it. Though the services may not be the exact equivalent of the fee on mathematical precision yet by and large predominantly the authority collecting the fee must illustrate that the services which it has rendered in lieu thereof is for some special benefit for the payers of the fee. Their Lordships observed that the two aspects may be so intimately connected or interwoven with the services rendered to others that it may not be possible to do a

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produce. (3) That while rendering services in the market area for the purposes of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefits must be conferred on them which have a direct, close and reasonable correlation between the licensees and the transactions, (4) That while conferring some special benefits on the licensees it is permissible to render such services in the market which may be in the general interest of all concerned with the transactions taking place in the market. (5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions

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was construed to be an impost on the buyer of the agricultural produce in the market in relation to transactions of his purchase. Their Lordships referred to Section 28 which enumerated the purposes for which the market committee fund may be expended. Referring to Clause (viii), (x), (xi) and (xvii) thereof, their Lordships opined that those were not relatable to the services to be rendered in the market in relation to the purchase and sale of the agricultural produce. To indicate the aforementioned clauses, which have a bearing on the present facet of the adjudication in the cases in hand, the same are extracted herein below. (viii) providing comforts and facilities, such as shelter, shade, parking accommodation and water for the persons, draught cattle, vehicles and pack animals coming or being brought to the market or on construction and repair of approach roads; culverts, bridges and other such purposes. . . . (x) propaganda in favour of agricultural improvements and thrif

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its character of having an element of quid pro quo will dwindle down and become an empty formality. It was observed that though upliftment of villages and helping of agriculturists is the solemn duty and obligation of the State those must be achieved by incurring expenses out of the public exchequer consisting of the income from various kinds of taxes etc. By the same analogy of reasoning, the Apex Court ruled that any expenditure from the market development fund formed of the receipts of the Marketing Board by way of contributions from the market committees out of their income by way of licence fee, market fee etc. could not be expended in respect of the purposes enlisted in Clause (x), (xi), (xiii) and (xvii) of Section 26. For ready reference, the above clauses are extracted herein below. …(x) Propaganda, demonstration and publicity in favour of agricultural improvements; (xi) Production and betterment of agricultural produce; (xiii) Imparting education in marketing or ag

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dships, however, underlined that the market development fund could only be expended for the purposes of the market committees in a general way or as far as practicable for the purposes of the particular market committee, which makes the contribution. Discountenancing the mistaken notion that the market committees and the Board could spend the income from the market fee for all good purposes and the objects of the Act in the general interest of the agricultural and agriculturists in the village, their Lordships elucidated that though the enactment was primarily meant for that purpose such an expenditure could not be approved if the same went against the very concept of quid pro quo, the quintessence of a fee. Their Lordships reiterated that the impost must be correlated with the services to the payers of the fee and all other objects may be achieved by otherwise augmenting the public revenue but not by utilizing a good and substantial portion of the market fee when such application is d

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ilment on the legislative competence of the State of Kerela in enacting the Abkari (Amendment) Act, 1967 and the Rules framed thereunder had to dilate on the question as to whether the supervisory charges contemplated thereunder could be sustained as a fee in absence quid pro quo. It was observed that the element of quid pro quo was increasingly felt not to be a sine qua non of a fee. The observations in Kewal Krishan Puri (Supra) to the contrary, according to their Lordships, were not intended to mean or lay down a rule of universal application. 56. Another Bench of the same strength in Sreenivasa General Traders (Supra), while responding to the challenge to the constitutional validity in the increase in the rate of market fee under the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966, also in substance entertained the latter view, opining that the observations on the issue of quid pro quo in Kewal Krishan Puri (Supra), were not to be construed as Euclid's

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to a separate fund and not to the consolidated fund of the State or to be separately appropriated towards the expenditure for rendering the service. The plea taken on behalf of the traders against their liability to pay market fee in respect of transactions carried on in the notified market area but outside the market in that area was expressly negated and a direction was issued to the market committee of the State to take immediate steps to shift them to the market proper of the respective notified market area for the stringent compliance of the Act, Rules and Bye Laws involved. 57. A Division Bench of the Apex Court in Municipal Corporation of Delhi (Supra), while embarking on the adjudication spurred by a challenge to the enhancement of fee imposed by the Delhi Municipal Corporation for slaughtering animals in slaughter houses had to traverse through the law relating to tax and fee. While reiterating that there is no generic difference between two and that compulsion is not the h

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take the character of tax. Their Lordships held that there was no co-relation between the amount paid by way of cess by the dealer and the services rendered to him adjudicating the levy to be a tax in the guise of a fee. Noticing that the State Government had failed to demonstrate the validity thereof tracing it to its legislative competence, the levy was quashed. 59. The question posed before a constitution Bench of the Apex Court in Belsund Sugar Co. Ltd., (Supra), was whether Bihar Agricultural Produce Market Act, 1960, could apply to the transaction of purchase of sugarcane by the sugar mills and also of sugar and molasses despite the fact that such exploits were already being regulated by the Bihar Sugar Cane (Regulation of Supply and Purchase) Act, 1981 as well as Sugarcane (Control) Order, 1966 and the Sugar (Control) Order, 1966. Having answered in the negative, the Apex Court also dwelt upon the plea of justifiability of the levy under the Market Act. It was inter alia proj

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e to Section 27 of the Act concluded that in order to at tract the charge thereunder, the agricultural produce on which the market fee is to be levied must be required to be bought and sold in the market area within the jurisdiction of the market committee concerned. As the Market Act, itself, had been held to be inapplicable for the purchase and sale of agricultural produce involved, the Court opined that the market committee would cease to be under any statutory obligation to provide any service or the infrastructural facilities for covering such transactions so as to be entitled to charge market fee thereon. The contention, therefore was negated not on the ground that the services rendered by the market committee were not having any adequate quid pro quo but on the logic that these were not required to be extended to regulate the sale and purchase of sugarcane, sugar and molasses and that therefore Section 27 of the Act was not attracted in the facts and circumstances of the case. T

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the other hand is that the former is based on the concept of burden whereas the latter on the concept of recompense/reimbursement. Their Lordships held that when tax imposed is, as a part of regulation or regulatory measure its basis shifts from the concept of burden to the concept of measurable/quantifiable benefit and it becomes a compensatory tax and its payment is then not for revenue but as reimbursement/recompense to the services/facility provider. It is then a tax on recompense. Their Lordships ruled that compensatory tax is by nature hybrid but it is closer to fee than to tax as both fees and compensatory taxes are based on the principle of equivalence as well as reimbursement/ recompense. 61. A survey of the authorities referred to hereinabove, in our estimate, testifies that the view expressed by the Constitution Bench of the Apex Court in Kewal Krishan Puri (Supra), on the concept of quid pro quo and the inter relation between the fee levied and the services rendered

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pro quo may not be possible or even necessary to be proved with arithmetical precision but the authorities charging the fee must be able to establish that a substantial portion of the levy collected is being spent for rendering services to those who bear the brunt of the impost. Conclusively, therefore, if the levy is a fee, the element of quid pro quo is inseverable therefrom and services commensurate with the realization would have to be rendered so much so that the benefits thereof are extended to the payers though in the process the general interest of all concerned with the transaction conducted in the market is also catered to. As a return to the cess collected under the Act with which we are concerned, the Board and the Market Committees are thus obliged in law to render the services for the benefit of the transactors in the markets in particular though while doing so, the interest of all concerned in general may as well stand served. 62. We have dealt with the issue of quid

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pointing several Regulated Market Committees to be the procurement agents under the Assam Paddy and Rice Procurement (Levy and License) (Amendment) Order 2000 for procurement of paddy during the Khariff year 1999-2000 has been only for a year as is apparent therefrom. Though the deponent in the affidavit in reply in WP(C) No. 5491/2001 has affirmed the statement of payment of ₹ 20/- Lacs towards the Chief Minister's relief fund by the Board to be true to his knowledge persuasive materials are lacking in this regard. Contribution of 50% of the annual gross income of every Market Committee to the Board per se is not mutilative of the concept of quid pro quo in the utilization of market fee realized from the traders of the market area as held in Kewal Krishna Puri. The challenge to the stipulation of deposit of 30% of the income of the market committees in favour of the Marketing Board therein on this plea was negated indicating, however, that the Market Development Fund can be

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as elsewhere in the country. The documents furnished disclose steps taken for implementing motivational programmes by the Board to keep the farmers abreast with its various schemes and activities undertaken by it on its own or with the assistance from the Central Government towards development of agricultural marketing of the State as well as to keep them conversant with the agricultural market information network, utilization of rural godowns for future benefits of the farmers, advancement of auction method of sale etc. Names and particulars of the grower societies registered with the Board have also been furnished to evince the steps taken by it to promote growers knowledge in the market and market practice etc. 65. Judged by the touchstone evolved in Kewal Krishan Puri (Supra), to decipher the purpose for which expenditures can be validly made so as to constitute services to satisfy the mandate of quid pro quo, we are of the view that the two clauses of Section 25 being Clause (i

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res of contemporary existence, we do not consider that the enhancements as prescribed by Act 2000 after over two decades of the enforcement of the principal Act is so illogical, irrational or excessive so as to warrant interference therewith. As it is, there is no clinching evidence on record to infer that the market committees and/or the Board are, with their collections awash with liquid assets and overflowing surplus so much so that the enhancements in the rate of cess in the form introduced ought to be held illegal and unconstitutional. No unimpeachable evidence is available as well, to demonstrate that the Board indulges in essential sovereign functions and fritters away the funds composed of the cess for such purposes. The challenge to Section 3D, 3E and 25(xiii) is, therefore, answered accordingly. 66. Though not pleaded by either of the parties, in course of the arguments, the aspect of possible repugnancy between the fictional sale conceived of in Section 21 of the Act and

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resident and has received his assent that it would prevail over the earlier law made by the Parliament or any existing law in the State concerned. For the repugnancy comprehended in Article 254(2) therefore the above factors must co-exist. 67. The Apex Court in Zaver Bhai (Supra), while dwelling on the essential features of the above Constitutional provision propounded that the important thing to consider is whether the legislation is in respect of the same matter which forms the subject matter of the earlier legislation and if those are different and distinct though of a cognate and allied character, Article 254(2) would have no application. 68. Reiterating the above view, the Apex Court in Tika Ramji, (Supra), quoted with approval the following extract of the dictum of Dixon J, rendered in Ex. Parte Mc L. Eal (1930) 43 CLR 472 (p): When the Parliament of the Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe what the rule of conduct

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closes such an intention, it is inconsistent with it for the law of a State to govern the same conduct or matter. The above view found emphatic reiteration in Dharappa, (Supra). 69. The constitutional validity of some provisions of the Madhya Pradesh Motoryan Karadhan Adhiniyam, 1991, was assailed in M.P.A.I.T. Permit Owners Association and another, supra, being in conflict with the Motor Vehicles Act, 1988. On a survey of the schemes of both the legislations, the Apex Court sustained the challenge to the vires of the State law observing that the offending provisions could not have been enacted without the assent of the President as the same directly impinged upon Article 254 of the Constitution of India as both the laws were construed to be operating in the same legislative field. The decision in State of Rajasthan v. Rajasthan Chemist Association (supra), involved an assailment of Section 4A of the Rajasthan Sales Tax Act, 1994 contemplating levy of sales tax on any transact

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en plea and thus the same could not be considered to be a sale in the manner stated in the Act which alone could be the subject of tax under Entry 54 in List II. This authority apparently has been pressed into service to emphasise that the incidence for tax i.e. the sale could not presumably have been assumed through a legal fiction if such an event in fact had not occurred. Considering the provisions of the Act in the present lis which occupies the center stage of the discourse i.e. Section 21 and more particularly Explanation I thereof, there is no reason to detain ourselves on this issue. The Act, neither is nor is claimed to be an enactment on the same legislative domain as the Act 1930. The Act is not a legislative instrument on Entry 7 of the Concurrent List as is the Act 1930 nor does it define sale as such. The thematic layout of the Act also does not reveal any intention of the lawmakers to supercede the concept of sale under the Act 1930 and the provisions ancillary theret

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it to be void in absence of the assent of the President in the manner mandated by Article 254(2). We are, therefore, of the unhesitant opinion that Section 21 of the Act is not repugnant to the Act 1930 as conceptualized in the above constitutional provision. 70. The fact remains that Act 2000 effecting the amendments amongst others to Section 21 of the Act had received the assent of the President on 29.12.2000 and, therefore, an endeavour was made on behalf of the petitioners to undo the same by contending that in absence of any material on record to demonstrate that the attention of the President had been drawn to the aspect of repugnancy between the proposed State law and the earlier law made by the Parliament as well as the necessity of such a law, the assent accorded was of no consequence and, therefore, did not save the enactment under challenge. 71. The decision of the Apex Court in Gram Panchayat of Village Jamalpur (Supra) and Kaiser-I-hind (P) Ltd. (Supra), were relied

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vidence Act, 1872 recognizing a presumption that all official acts must have been performed regularly and that the State act involved therein had been amended having regard to the provisions of the Central Act and after obtaining the Presidential assent as required. 73. The learned Counsels for the parties present without any reservation admitted to a query made by this Court that such a plea bearing on the assent vis-a-vis Act 2000 had not been pleaded in the writ petitions and, therefore, the respondents had no occasion to respond to the same. We feel inclined in the above admitted factual premise to subscribe to the view taken in Engineering Kamgar Union (Supra), and negate the assertion made qua the assent. A passing reference at this stage may also be made of the decision Subodh Chit Fund (P) Limited (Supra), wherein the Apex Court had approved the conclusion of the Madras High Court that the sanction of the President for the amending enactment is not necessary if the same had

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agricultural produce is bought or sold whether for cash or for deferred payment or other valuable considerations. As would be obvious from the above excerpt, thereby the Board has also been endowed with the power to levy and collect cess for any or all the market Committee(s) in the market areas in addition to the powers of the Market Committee (but not both) on the Agricultural produce bought or sold in such market, whenever felt necessary with the approval of the State Government. The cavil is on two counts. Firstly such retrospective conferment of powers on the Board w.e.f. 03.09.1974 is impermissible as the Act had come into force from 01.05.1975 being the appointed date and secondly such authorization of the Board is wholly discordant with the scheme of the Act and the Rules. 75. Indeed the principal Act, vide notification No. AGA 393/78168 dated 27.08.1975 had made it enforceable w.e.f. 01.05.1975. The above notwithstanding, we do not feel convinced that the aforementioned

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ttedly, such an express provision as in Section 21(2) introduced by Act, 2006 did not exist at the time of the verdict of the Full Bench which adjudged the collection of cess by the Board at the check gates on the basis of its resolution to the said effect to be ultra vires the Act. The validity or otherwise of Section 21(2) thus has to be adjudged in the above backdrop vis-a-vis the legislative authority to enact a validating law with retrospective effect. 77.As it is, Section 21(2) invests the Board with the prerogative to levy and collect cess whenever felt necessary with the approval of the State Government for any or all of the Market committees on the agricultural produce bought or sold in the market areas at the rate specified therein. The remonstrance on behalf of the petitioners is firstly, such authorization of the Board is not contemplated in the scheme of the Act and the Rules and secondly, such investiture is with the object of purposefully legalizing the exactions made

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by the Constitution render a judicial decision ineffective by enacting a valid law on the topic within its legislative field, fundamentally altering or changing with retrospective, curative or neutralizing effect the conditions on which such decision is based. 78. While reiterating the above view, in State Bank's Staff Union (Madras Circle) v. Union of India and Ors. (2005) III LLJ 854 SC , their Lordships observed that the legislature, as a body, cannot be accused of having passed a law for extraneous purpose and even assuming that the executive, in a given case, has an ulterior motive in moving a legislation, if cannot render the passing of the law mala fide. It was held that whenever an amendment is brought in force retrospectively or any provision of an enactment is deleted retrospectively, the rights of some are bound to be affected in one way or the other. Their Lordships recounted the observations of the Apex Court in Cauvery Water Disputes Tribunal, Re that the legislatu

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keting Board. v. Shankar Makhana Bhandar (Supra), by the Bihar Agricultural Produce Markets (Validation) Act, 1982, market fee levied, collect or to be levied or collected was sought to be saved from being illegal and invalid on the ground of non publication of the required notifications. The jurisdictional High Court upheld the challenge to the said enactment on the ground that it was not permissible as the same had an effect of upsetting the earlier judicial adjudication. The Apex Court while interfering with such determination of the High Court clarified that the Validation Act had only knocked off the basis of the earlier judgment by validating the omission of non-publication of the notification. 80. The decision in Ashok Lanka and Anr. (Supra) turned on its own facts. It involved a challenge to the selection for grant of licence for settlement of liquor shops under the Chhattisgarh Excise Act, 1915 and the Rules framed thereunder. Though under the Rules, an applicant was amongs

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islative competence of enacting a validating law with retrospective effect did not surface for the consideration of the Apex Court and this decision cannot be construed to be a determination detracting from the judicially evolved precept in the other authorities referred to hereinabove. 81. In the face of precedential recognition of the legislative authority to enact a validating legislation retrospectively modifying or altering any law forming the basis of any judgment or order of a Court thereby rendering it ineffective, the assailment of the Act on this count cannot be upheld. The State legislature in doing so did not stray beyond the legislative field earmarked for the purpose and the impugned enactment perse is a validating law seeking to authorize the Board to levy and collect cess alike the Market Committees on or from the date of enforcement of the Act. Thereby the basis of the rendering of the Full Bench has been rendered non est, an eventuality which is judicially countena

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s it to exercise superintendence and control over the Market Committees in the manner prescribed. The State Government under Section 3(9) is empowered to exercise and superintendence and control over the Board and may supersede it on the satisfaction that it is not functioning properly and/or is abusing its power or is guilty of corruption or mismanagement. 83. The State Government or the Board in terms of Section 3(11) may call for any information from a Market Committee or from any other functionary under it pertaining to specified agricultural produce and may also inspect the records of the Market Committee or such functionary if need be. Section 3(13) mandates the Board to submit every year the estimate of its annual income and expenditure for the sanction of the State Government. The powers and the functions of the Board are delineated in Section 3A. In addition to its act of superintendence and control over the Market Committee, it is required thereunder to ensure the coordina

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under this Act including the maintenance of pool of officers common to the Board and the Market Committees. Out of the amount to be deposited by the Market Committee as above, 50% thereof collected every year is to be transferred from the Marketing Board's fund to a separate account namely, 'Agricultural Development Fund' from which expenditure on schemes or items prepared for development of Agricultural Produce and Market subject to the approval of the Committees referred to therein are to be met as sanctioned by the Board. Amongst the purposes for which the Marketing Board's fund can be utilized as enumerated in Section 3E it can, inter alia be by way of grant to financially weak Market Committees thereunder all officers and staff of Market committees in the form of loan or grant for development purposes, as well as for any purpose as may be deemed necessary by the Board or the State Government for carrying out the objectives of the Act. Section 3F stipulates for annu

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oard with the approval of the State Government to declare any enclosure, building or locality in any market area to be the principal market yard and sub market yard or yards. A Market committee for every area declared to be a market area is to be established by the State Government under Section 7 to enforce the provisions of the Act and the rules and bye-laws framed thereunder in such area. The State Government is left with the discretion to establish more than one Market Committee for the same area in the process as referred to in Section 7(2). The composition of every Market Committee is provided for in Section 8. Each Market committee in terms of Section 13 as well, is a body corporate having perpetual succession and a common seal and may sue or be sued in its corporate name and is competent amongst others to do all things necessary for the purpose for which it is established. Section 13(2) prohibits any person from using any place for buying or selling specified agricultural pr

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on the Board. Section 21A authorizes the Market committee as well the Board to establish check gates at different points within the Market Area. Whereas, the Market Committee can do so with the approval of the Board, the latter would require the approval of the State Government for such purpose. The collections by the Market committee are to be deposited in Market Committee Fund and all expenditures incurred by it under or for the purpose of this Act would be met therefrom. The surplus if any, as Section 23 requires would be applied in the manner as provided in Section 25 which inter alia may be for any matter as may be entrusted by the Board. The State Government under Section 37 is endowed with the power to supersede a Market committee in the eventualities as mentioned therein. A residuary power on the State Government has been conferred by Section 33 to inspect or cause to be inspected the accounts of the Board or to institute an enquiry into the affairs of the Board if considered

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n case the trader fails to submit a return and comprehends inspection of his account and consequential assessment of his dues payable as cess. In such a case, the assessment order would be communicated to him by means of a demand notice. The rule contemplates suspension and cancellation of trader's licence in case of a habitual defaulter. Rule 23(13) contemplates an appeal against the assessment order by the Committee to the Chairman of the Board. Rule 25 provides for refund of market fee recovered in excess of the amount actually due or on a transaction which is exempted under the Rules. The amount recoverable is to be defrayed out of the Market Development Fund or Market Committee Fund depending on the account in which it had been credited. The various provisions of the Act demonstrate in unequivocal terms that the State Government, the Board and the Market Committee(s) for the respective Market area have been assigned roles complementary to each other so much so that all thes

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orpus for achieving the objectives of the Act and though the legislature has provided for apportionment of the realization and deposit thereof in the Market Board's Fund, the Agricultural Development Fund and the Market Committee Fund, the purposes for which the same is expendable are, except as contained in Section 25(1) (xi) and obviously relatable to those conceived of by the Act. As held above, the purposes enumerated in Clause (vi) and (vii) of Section 3E and Clauses (xii) and (xiii) of Section 25 thereof must essentially be in conformance with the requirements prescribed in Kewal Krishan Puri (supra). 88. Section 3A(1)(v) (vi), 3A(2) (viii), 3E(iv)(v)(vi)(vii), 14, 15, 16 and 25, on a conjoint reading evince an inextricable homogeneity in statutory assignments for the State Government, Board and the Market Committee(s) to effectuate the enjoinments thereof. The Board in this legislative paradigm can by no means be branded a stranger so as to disqualify it from being entr

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therein for and on behalf of any one or more of the Market Committee(s). The possibility of double exaction has, thus, been cautiously ruled out. Noticeably, the corresponding changes following the amendments effected by Act, 2006 arming the Board with the power also to levy and collect cess have not yet been incorporated in the Rules. The State Government ought to have been vigilant, alert and prompt so as to avoid any misgivings in this regard. This omission notwithstanding, having regard to the legislative edict that the Board under Section 21(2) would levy and collect cess only in certain eventualities as envisaged for any or more of the Market Committee(s) and the exhaustive procedure laid down in the Rules visualizing the process therefore, vis-a-vis, the Market Committee(s), we do not feel persuaded to annul this provision on the count of want of adequate mechanism detailing an exclusive procedure to enable the Board to exercise such power. The legislative policy engrafted in

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a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. This rule is based on the assumption, judicially recognized and accepted, that the legislature understands and correctly appreciates the needs of its own people, its laws are directed to problems made manifest by experience and its discrimination are based on adequate grounds. The presumption of constitutionality is indeed so strong that in order to sustain it, the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than

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and illegal exaction and retention of cess not leviable under the Act. The empowerment on the Board is not in any view of the matter subversive of the authority of the Marketing Committees to levy and collect cess. It is only supplementary in nature to be invoked on behalf of such a Managing Committee of committees in the eventualities envisioned. The impeachment of Section 21(2) of the Act on the ground of misconceived and illogical authorization of the Board to levy and collect cess thus fails. 89. The above determinations on the legal issues notwithstanding, the validity of the realizations of cess from the petitioners judged in the complete factual perspective have to be independently scrutinized amongst others for deciding on the claim of refund registered by them. In view of the decision of the Full Bench and the Apex Court noted here in above, the petitioners are not entitled to any refund prior to 13/8/2001. The present adjudication logically would appertain to the period on

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ently denounced the exactions as illegal, arbitrary and unauthorized. 90. The respondent Board per contra in its affidavit to the amended writ petition in WP(C) 5491/2001 (affirmed on 19.06.2006) has avowed that the petitioners have been conducting local sales of the specified agriculture produce bought from outside the State of Assam and has furnished the names and particulars of the firms and companies indulging in such activities with documents in support thereof. The petitioners in the aforementioned writ petition in their reply affidavit while admitting such local sales by some of the members of the association have contended that the documents relied upon by the Board disclose that the transactions relate to the year 2005 and barring one or two instances, the article sold was wheat products and not wheat. In view of the above admission it is inessential to dilate further in this regard. It is, therefore, easily deductible that the petitioners' assertion of denying any loca

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d that the contents thereof have to be explicit and categorical. Any dispute on this count has, thus, to be addressed on the measure of the definition of Agricultural Produce provided in the Act, the schedule thereto and the above proposition expounded by the Apex Court. 91A. On the plea of absence of quid pro quo, the petitioners have been trenchant in charging the Board for having failed to establish any market yard or sub-market yard as required under the Act and to extend all necessary facilities associated therewith. According to them, the respondents have only resorted to purchase/construction of expensive guest houses and offices. They have cited the instance of Guwahati Market at Uparhali to have been declared as principle yard which is at a place about 40 k.m. from Guwahati. They have alleged that the said principle market yard consists of a double storeyed abandoned structure wholly unfit for human habitation with no link road. They have also furnished a list of market com

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st of schemes implemented by it through various market committees together with the year and the expenditure incurred therefor. An amount of ₹ 11,06,18,477/-, appears to have been expended by it during the period 1980 to 2001. From the rival pleadings recorded hereinabove, it is, therefore, difficult to decisively hold that no market area or principal market yard or sub-market yard has at all been set up till date as required under the Act. The permissibility or validity of collection of cess at the check gates referred to hereinabove, however, does not ipso facto follow from the above deduction. It is claimed by the Board that the check gates are located within the declared market areas under the Act. Such check gates are contemplated in Section 21A of the Act introduced for the first time by Act 2000 requiring the territorial market committee to establish the same at different points within the market area whenever felt necessary with the prior approval of the Board. This, t

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ite check gates by the Board on behalf of any or all market committees to be ultra vires the Act. The Board has countered this plea with a denial. Referring to the Model Act, 1998, more particularly Sections 21, 22 and 23 thereof it has averred in favour of its unqualified power to establish, verify and examine the agricultural produce ferried in any vessel or other contents to ensure prevention of evasion of cess under the Act. 93. The authority and competence of the Board and/or the market committees to set up check gates understandably was not in issue in the earlier round of litigation, the power to this effect having been conferred on only by the two amending Acts. The issue pertaining to the collection of cess at the check gates for the pre-amendment period in absence of any sale or purchase therein was not answered by the Apex Court in its wisdom, the traders/dealers not having assailed the decision of the Full Bench declining the prayer for refund. The Apex Court parted with

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e various State Legislation on the subject constituted High Power Committees resulting in the formulation of a draft model Agricultural Produce Market Act. The present amendment is mainly done keeping in view the different provisions of the guidelines given by the Government of India in the form of a model draft Agricultural Produce Market Act. [Published in the Assam Gazette Extraordinary, dated 27th June, 2000] pp-475-512. . . . Statement of Objects and Reasons: The Assam Act No – III of 2007 In order to remove difficulties in implementing of a few sections such as Sections 2, 3, 4, 5, 13, 14, 21, 21A and 23 of the Assam Agricultural Produce Market Act, 1972 (as amended up to 2000) and to incorporate a few provisions to make the said Act more meaningful and effective, the present Amendment bill has been proposed by the department. Having regard to the underlying purpose as illustrated in Section 21A, we do not find any justifiable reason to jettison the power confer

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market area so as to examine the contents thereof and inspect all records relating to the specified agricultural produce being carried as well as the names and particulars of the owner of the vehicle etc. Establishment of check gates to pursue the above activities per se in our opinion cannot be dubbed as illegal, arbitrary, unreasonable or in any way militative against the letter and spirit of the Act. 94. The realization of the cess, however, by all means would have to be in scrupulous observance of the necessary preconditions embodied in Section 21 of the Act and Rule 21, 22 and 23 of the Rules as discussed hereinabove. The legal fiction engrafted in Section 21 would apply only in absence of any direct evidence of sale to the contrary. The levy and collection of cess on the specified agricultural produce would ensue only on the sale or purchase thereof in the market area as comprehended therein as well as at the rate specified. The fictional factors would hold the sway only in

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s to corroborate their stand that the goods intercepted at the check gates were on transit on completion of their sale outside the State of Assam though prima facie probative of the said plea in respect of the transactions referred to therein those are inadequate to be acted upon to return a finding that such an inference is possible in all cases of such detentions and collections at the check gates. Whereas the statutorily stipulated imperatives for the application of the legal fiction are not in doubt, the documents produced by the petitioners, in absence of a probe into the individual facts cannot be accepted as an irrefutable guarantee of completion of sale or purchase of all consignments of specified agricultural produce halted, scrutinized and subjected to the impost under the Act. In exercise of powers under Article 226 of the Constitution of India, this Court is not equipped to embark on this exercise. 96. The view expressed by the Apex Court in Agricultural Market Committee

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Court to adjudge the same as illegal and non est. However, if on an application of this precept on investigation of the individual facts, it transpires to be so then unreservedly the trader and the dealer concerned would be entitled to the consequential reliefs. 97. On the question of refund, therefor, we are of the considered view that having regard to multi faceted factual enquiries to be made, it would be appropriate to remit this issue to a body composed of representatives of the Government, the Board, the concerned Market Committees and the traders. The Commissioner Secretary, Department of Agriculture, Government of Assam, would within six (6) weeks herefrom constitute a Committee in terms of the above in consultation with the Board, Market Committees and the petitioner association. The petitioners/petitioner association would cooperate with the aforementioned authority in this regard as and when notified. In the interest of workability of the Committee, the composition the

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Export of Goods and Services- Direct Dispatch of Shipping Documents Realisation and Repatriation of Export Proceeds – Liberalisation

Commentaries / Editorials – Dated:- 14-8-2008 – Paragraph C.7 of the Part C of the Annexure of the Circular No. 12 dated 9-9-2000 deals with manner in which the shipping documents should be dispatched. Accordingly, generally the shipping documents are dispatched by the authorized agents (banks) through their overseas braches / correspondents. But, in certain circumstances (like, in case of regular customer or in case of advance payment etc.) exporters are allowed to dispatch the documents direc

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Export of Goods and Services- Direct Dispatch of Shipping Documents Realisation and Repatriation of Export Proceeds – Liberalisation

FEMA – 06/2008 – Dated:- 13-8-2008 – Export of Goods and Services- Direct Dispatch of Shipping Documents Realisation and Repatriation of Export Proceeds – Liberalisation RBI/2008-09/127A. P. (DIR Series) Circular No. 06 August 13, 2008 To, All Category – I Authorised Dealer Banks Madam / Sir, Export of Goods and Services- Direct Dispatch of Shipping Documents Realisation and Repatriation of Export Proceeds – Liberalisation Attention of Authorised Dealer Category – I (AD Category – I) banks is invited to the paragraph C .7 of A. P. (DIR Series) Circular No.12 dated September 9, 2000, in terms of which AD Category – I banks/exporters have been allowed, in certain cases, to dispatch shipping documents direct to the consignee. All other cases

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ry – I bank is fully compliant with Reserve Bank s extant KYC / AML guidelines.d) The AD Category – I bank is satisfied about the bonafides of the transaction. 3. In case of doubt, the AD Category – I bank may consider filing Special Transaction Report (STR) with FIU_IND (Financial Intelligence Unit in India). 4. The directions for Status Holder Exporters and Units in Special Economic Zones issued vide A. P. (DIR Series) Circular No. 35 dated April 1, 2002 and A. P. (DIR Series) Circular No. 10 dated August 14, 2002, respectively, shall remain unchanged. 5. AD Category – I banks may bring the contents of this Circular to the notice of their constituents and customers concerned. 6. The directions contained in this Circular have been issued u

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PREPARING FOR GST

Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 29-7-2008 Last Replied Date:- 28-8-2016 – The introduction of goods and services tax (GST) from April 2010 was announced by Finance Minister in 2006-07 Budget. Union Budget 2007-08 reconfirmed the proposal and moved a step ahead in announcing that the empowered committee of State Finance Ministers will work with the Union Government to prepare a road map for introducing a national level goods and services tax with effect from April 1, 2010. Union Budget 2008-09 has reported that there is considerable progress in preparing a road map for introducing the goods and service tax with effect from April 1, 2010. After value added tax, if implemented, GST shall be the most significant fiscal initiative of independent India and shall boost the economic development. Need for a common tax Why do we need GST today? In today's Indian economy, where service sector contributes over 55%, separate taxation of goods and services is n

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With GST, uniformity of levy of indirect taxes will be ensured across the country. Tax Reforms and GST Dr. Vijay Kelkar headed Task Force on implementation of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 recently submitted its report in July 2004 to the Government. The report outlines the fiscal strategy needed to meet the objectives of the FRBM. The task force has recommended the following strategy for tax reforms: widening the tax basefew rates, lower rates – enhancing equity of the tax system – vertical as well as horizontal equity – shift to non-distortionary consumption taxes to increase efficiency in production and enhance international competitiveness of Indian goods and services. The destination based VAT on all goods and services is the best method of eliminating distortions and taxing consumptions. – enhancing the neutrality between present consumption and future consumption. – enhancing neutrality of the tax system to the form of organisation. – enhancin

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services tax is a tax levied on goods and services imposed at each point of sale or rendering of service. Such GST could be on entire goods and services or there could be some exempted class of goods or services or a negative list of goods and services on which GST is not levied. GST is an indirect tax in lieu of tax on goods (excise) and tax on service (service tax). The GST is just like State level VAT which is levied as tax on sale of goods. In India, GST may be a national level value added tax applicable on goods and services alongwith state land GST. A major change in administering GST is that tax incidence is at the point of sale as against the present system of point of origin. Preparing for Goods and Services Tax (GST) Proposed Goods and Services Tax (GST) as an alternative to excise duties on manufacturer and service tax on services should be aimed as a major indirect tax reform which evolves as an efficient and harmonized consumption tax (indirect tax) in India. This is goin

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service tax into one integrated tax called Goods and Services Tax (GST) is a welcome ambition but also a huge challenge at all fronts-political as well as psychological, administrative and technological. In fact, VAT took India over a decade and if India wants GST to happen, a beginning has to be made. It may achieve 2010 deadline or not but atleast a beginning should be made. GST shall be aimed to make for an efficient, transparent system of taxation which is imperative for Indian industry to compete at global and domestic fronts. Pre-requisites for GST Following are the pre-requisites for entering into a GST regime Setting up of empowered committee for GST (like VAT) which can steer the road map into action – Broaden the tax base for excise duty (presently 40% comes from petroleum products) – Finishing area based and product based exemptions – Rationalization of concessions and exemptions including that on exports – Expanding service tax to almost all services – Common/unified tax r

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them to avail Cenvat credit on inputs and input services, besides eliminating other small taxes, making compliance cheaper and simpler. In an ideal GST regime, all indirect taxes should be convatable against one another. GST shall achieve economies of scale by creating a common market and help India become a global market. All states and centre will have to work for this unified goal. In European Union (EU), VAT has been fully harmonized since 1993, while in Mexico, unified VAT was implemented in 1980 to replace 30 federal excise taxes and 400 plus state and municipal taxes with revenue sharing. In Brazil, federal VAT was introduced way back in 1967. Steps involved Following steps are needed on political, administrative and technological fronts Arriving at common/general consensus including political agreement. – Setting up a high level committee for monitoring the project of GST – Preparing a blue print/road map for GST – Creating a conducive environment for GST – Centre-state coordi

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t and effective GST regime. The phasing out of CST has since been announced in Union Budget 2007 and implemented and it is expected that by 2010 it shall be completely abolished. The empowered committee (to be set up) should also try to integrate the recommendations of Govinda Rao and Vijay Kelkar Committees. There will be a need to follow a gradual approach rather than one go stand. It may be noted that Finance Minister has in his Budget speech (2007) announced that empowered committee of VAT shall help the Centre in implementation of GST also. During Budget Speech for 2008-09, it was indicated that substantial progress has been made in moving towards GST. Union Budget 2006-07 (and reconfirmed in Budget 2007-08 and 2008-09) has proposed a date, i.e., 1st April, 2010 for introduction of GST in the country. Whether it can happen has to be seen. – Reply By amit goyal – The Reply = I WANT TO KNOW ABOUT GST % ON VAT – Reply By anand srivastava – The Reply = hello sir, i m accountant.iwan t

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Foreign Exchange Management (Exports of Goods and Services) (Amendment) Regulations, 2008

FEMA – 176/2008-RB – Dated:- 23-7-2008 – Foreign Exchange Management (Exports of Goods and Services) (Amendment) Regulations, 2008 NOTIFICATION Mumbai, the 23rd July, 2008 No. FEMA 176/2008-RB G.S.R. 576(E).— In exercise of the powers conferred by clause (a) of sub-section (1) and sub-section (3) of Section 7, sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999(42 of 1999) (Notification No. FEMA.23/RB-2000, dated 3rd May2000), the Reserve Bank of India makes the following amendment in the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, namely:— 1. Short title and commencement: (i) These regulations may be called the Foreign Exchange Management (Export of Goods and Services) (Amendment) R

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and PP for the words six months wherever they occur, the words twelve months shall be substituted. (v) in Schedule, in Software Export Declaration (SOFTEX) Form, for the figures and word 180 days wherever they occur, the words twelve months shall be substituted. [F. No. 1/23/EM/2000-Vol. IV] SALIM GANGADHARAN, chief General Manager-in-Charge Foote Note : (1) @ It is clarified that no person will be adversely affected as a result of retrospective effect being given to these Regulations. (2)The Principal Regulations were published in the Official Gazette vide No. G.S.R. 409(E) dated May 8, 2000 in part II, Section 3, Sub-section (i) and subsequently amended vide (:) No. G.S.R. 199(E) dated March 21, 2001 (ii) No. G.S.R. 473(E) dated July 8, 2

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Master Circular on Export of Goods and Services

FEMA – 09/2008 – Dated:- 1-7-2008 – Master Circular on Export of Goods and Services RBI/2008-09/22Master Circular No. 09/2008-09 July 1, 2008 To, All Category – I Authorised Dealer Banks Madam / Sir, Export of Goods and Services from India is allowed in terms of clause (a) of sub-section (1) and sub-section (3) of Section 7 of the Foreign Exchange Management Act 1999 (42 of 1999), read with Notification No. GSR 381(E) dated May 3, 2000 and FEMA Notification 23/RB-2000 dated May 3, 2000 as amend

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Master Circular on Import of Goods and Services

FEMA – 08/2008 – Dated:- 1-7-2008 – Master Circular on Import of Goods and Services RBI/2008-2009/21Master Circular No. 08/2008-09 July 1, 2008 To, All Category – I Authorised Dealer Banks Madam / Sir, Import of Goods and Services into India is being allowed in terms of Section 5 of the Foreign Exchange Management Act 1999 (42 of 1999), read with Notification No. GSR 381(E) dated May 3, 2000 as amended from time to time. 2. The circular is organised into five parts as under : Part I : Introduct

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DR. REDDY’S LABORATORIES LIMITED Versus STATE OF KERALA

2008 (6) TMI 628 – KERALA HIGH COURT – TMI S.T. Revn Nos 251 of 2003, 59 of 2006, 112 of 2006 Dated:- 12-6-2008 – Chief Justice MR.H.L.DATTU AND MR. Justice A.K.BASHEER, JJ. For the Petitioner : SRI.P.R.VENKITESH For the Respondent : GOVERNMENT PLEADER ORDER H.L. DATTU, C.J.: Since the assessee is common in all these revision petitions and since the legal issues involved are also common, these revision petitions are clubbed, heard and disposed of by this common order. 2. The assessee is a dealer registered under the provisions of Kerala General Sales Tax Act (KGST Act for short). The assessee had filed its annual returns conceding a particular total and taxable turn over for the assessment years 1997-98, 1998-99 and 1999-2000. Apart from others, the assessee had effected sales of GLA-120 Capsules (Gamma Linolenic Acid) and in the returns filed had requested the assessing authority to treat the sales of GLA-120 as an unclassified item and liable to tax

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g vegetative or animal preparation sold in air tight containers and food colours, essence of all kinds and powders or tablets used for making food preparations. The goods under dispute is not coming under any of the items. However, entry 87 to the 1st schedule is non-alcoholic drinks, squashes, sauces, aerated waters, mineral water, beverages, Glucose D, Glucovita and similar items whether bottled, canned or packed. The commodity sought by the appellant have more related under this entry. Therefore 20% tax levied by the assessing authority is found correct. Moreover this Tribunal in T.A. No. 286 and 287/02 decided the same issue in the same line. Thus we decided the issue against the appellant. The appeal filed under the KGST Act is thus dismissed without any consideration. 4. The assessee being aggrieved by the orders passed by the Tribunal is before us in these Tax Revision Petitions filed under Section 41 of the KGST Act. The questions of law framed are as under: (i) Did no

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sified items and taxable under residuary Entry of First Schedule to the Act. 6. The assessee has taken different stance before the assessing authority and the Tribunal and before us also. Before the assessing authority the claim was that the commodity in question requires to be classified as an unclassified item liable to be taxed under the residuary clause and in the appeal filed before the Tribunal, the claim was that the product requires to be classified under Entry 56 of First Schedule to KGST Act and taxable at the rate of 12.5% and before us at the time of hearing of this revision, the claim of the learned counsel for the assessee is that, it requires to be classified as Medicine under Entry 79 of the First Schedule to KGST Act and if it does not fit in that entry, then at least it requires to be classified as unclassified item falling under residuary entry. 7. At the time of hearing of these Revision Petitions, the learned counsel appearing for the assessee has produced be

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the point of first sale in the State by a dealer who is liable to tax under Section 5. 20% 9. The residuary Entry of First Schedule of KGST Act is as under: Sl.No. Description of Goods Rate of Tax Point of Levy (percent) 177 /141 All other goods not coming under any entry in any of the schedules. At the point of first sale in the State by a dealer who is liable to tax under section 5. 12.5 10. The question for consideration and decision is whether GLA-120 is a dietary supplement or an item like Glucose and Glucovita etc. or Medicine. 11. Before we proceed to answer the issue which we have raised for our consideration, it would be appropriate to note the stand of the assessee before the Tribunal. The contention of the assessee's representative is noticed by the Tribunal in its ord

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means any substance (usually a food item/ingredient) which helps in maintenance of health. The clear distinction between health and disease is not there. What is healthy for a particular person/sex/ethnic group is a disease for some one else (for example being slim is healthy for a model but is a sign of malnutrition for a pregnant woman or for doctors). Since the distinction between disease and health itself is not clear, dietary supplement versus medicine is also not clear in many circumstances. In some way, we need to draw a distinction for various reasons (for rigorous pre-clinical and post marketing testing and for taxation purpose). We can say that the distinction can be based on the condition for which the molecule is used. If GLA-120 is used to treat diabetic neuropathy then it should be considered a medicine. If for some reason it is used in normal healthy people (which it is not supposed to) as a tonic to improve the general well being, then it is a dietary supplement. If GL

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Export of Goods and Services- Realisation and Repatriation of Export Proceeds-Liberalisation

FEMA – 50 – Dated:- 3-6-2008 – RBI/2007-08/354A. P. (DIR Series) Circular No. 50 June 03, 2008 To, All Category – I Authorised Dealer Banks Madam / Sir, Export of Goods and Services- Realisation and Repatriation of Export Proceeds-Liberalisation Attention of Authorised Dealer Category – I (AD Category- I) banks is invited to the provisions of sub-regulation (1) of Regulation 9 of the Notification No.FEMA.23 /2000-RB dated May 3, 2000, as amended from time to time, in terms of which the amount representing the full export value of goods or software exported should be realised and repatriated to India within six months from the date of export. 2. Reserve Bank has been receiving representations from Exporters / Trade bodies to extend the peri

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Export of Goods and Services – Payments of Claims by Insurance Companies-Write off

FEMA – 49 – Dated:- 3-6-2008 – RBI/2007-08/353A.P. (DIR Series) Circular No. 49 June 03, 2008 To,All Authorised Dealer Category – I banksMadam / Sir, Export of Goods and Services – Payments of Claims by Insurance Companies-Write off Attention of Authorised Dealer (Category – I) banks is invited to A. P. (DIR Series) Circular No.22 dated September 24, 2003, in terms of which AD banks were permitted to write off the export bills and delete them from the XOS statement in respect of outstanding export bills where claims were settled by ECGC. 2. Reserve Bank has received representations from Exporters / Trade bodies for extending the write off facility applicable to the claims settled by all insurance companies which are registered with Insuran

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write-off the relative export bills and delete them from the XOS statement. Such write-off will not be restricted to the limit of 10 per cent indicated in paragraph C 18(b) of the A. P. (DIR Series) Circular No.12 dated September 9, 2000. 4. It is clarified that the claims settled in Rupees by ECGC / insurance companies should not be construed as export realisation in foreign exchange and claim amount should not be allowed to be credited to Exchange Earners Foreign Currency Account maintained in terms of Regulation 4 of FEMA Notification No. FEMA 10/2000-RB dated May 3, 2000. 5. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned. 6. The directions contained in this circu

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Service Tax – Banking and Other Financial Services – Non-payment of Service Tax on Agency Commission received by M/s. State Bank of Mysore (Treasury Branch) – Reg.

F.No. V/DGST/21(11)M.O./2008 Dated:- 14-3-2008 Circular – Circulars – Service Tax – No. 01/2008, Dated : March 14, 2008 Subject : Service Tax – Banking and Other Financial Services – Non-payment of Service Tax on Agency Commission received by M/s. State Bank of Mysore (Treasury Branch) – Reg. During the course of audit at the State Bank of Mysore (Treasury Branch), Mysore, conducted by Central Excise Commissionerate, Mysore, a case was detected where 'commission' received on Government transactions and deducted by 'SBM G-SEVA Branch' Bangalore (which functions at 'Nodal Bank') is not being taken into consideration while discharging service tax liability by 'currency chest branches' of State Bank of Mysore and service tax is paid o

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State of Gujarat Versus Official Liquidator of GSTC Ltd.

2008 (3) TMI 483 – HIGH COURT OF GUJARAT – [2008] 84 SCL 457 (GUJ.) – – Winding up – Powers of liquidator – Held that:- Since the State Government has discharged the liability of the Mills Company towards secured creditors and labourers and there is still surplus fund with the Official Liquidator in the account of GSTC and since the State Government has undertaken to discharge the liabilities, if any, that may arise in future, there may not be any objection on the part of the Official Liquidator in handing over possession of the immovable properties in question to the State Government and even if the objections raised by the Official Liquidator in his report, they are not sustainable either on facts or in law.



The Official Liquidator is directed to hand over possession of the properties in question of Priyalaxmi Mill, Vadodara as well as Monogram Mill, Ahmedabad to the State Government as the State Gov-ernment is the only secured creditor and sole shareholder/contributory

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he appropriate order in this regard will be passed after submission of accounts before the Court under separate report. – COMPANY APPLICATION NO. 562 OF 2007 IN COMPANY PETITION NO. 250 OF 1996 WITH COMPANY APPLICATION NO. 77 OF 2008 IN COMPANY PETITION NO. 205 OF 1996 Dated:- 5-3-2008 – K.A. PUJ, J. S.N. Shelat and M.G. Nagarkar for the Applicant. Nitin K. Mehta and D.S. Vasavada for the Respondent. JUDGMENT 1. Since common issue is involved in both these Company Applications they are heard together and are being disposed of by this common judgment and order. 2. Both these Company Applications are filed by State of Gujarat through the Secretary, Industries & Mines Department, Sachivalay, Gandhinagar. 3. Company Application No. 562 of 2007 is in relation to Priyalaxmi Mills, Vadodara a unit of Gujarat State Textile Corporation (in liquidation) and Company Application No. 77 of 2008 is in relation to Monogram Mills, Ahmedabad a unit of Gujarat State Textile Corporation (in liquidat

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es to the State Government to the tune of Rs. 826.79 crores for discharging the liabilities towards all the dues of the Gujarat State Textile Corporation (in liquidation). 4. In Company Application No. 562 of 2007 an affidavit is filed by Shri Rajesh Kantilal Shah – Dy. Secretary to the Government of Gujarat in Industries & Mines Department, Gandhinagar, in support of judge s summons whereas in Company Application No. 77 of 2008 an affidavit is filed by Shri Kanubhai Atmaram Patel – Under Secretary, Government of Gujarat to the Industries & Mines Department, Gandhinagar, in support of judge s summons. 5. The case of the applicant-State Government in both these matters is that the GSTC Ltd. (in liquidation), is a company duly registered and incorporated under the provisions of the Companies Act, 1956, which was incorporated vide Certificate of incorporation No. 1546/68, dated 30-11-1968. This Company was wholly owned by the State Government and the main objectives for which the

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ion or modernization etc. 6. At the relevant time, there were 17 textile mills of GSTC as per the Annual Report & Accounts for the year 1994-95. On account of stringent crisis in the textile industry in the whole of the State of Gujarat and other relevant regions, GSTC could not do well and, therefore, GSTC approached by the Board of Industrial and Financial Reconstruction (BIFR) for revival of and reconstruction of the Company. After hearing all parties concerned, the BIFR found that it was not possible to meet the losses suffered by GSTC within a reasonable time and there was no likelihood of GSTC being revived in future and, therefore, an opinion was forwarded by the BIFR to this Court under section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985 for winding up of GSTC. This opinion was registered as Company-Petition No. 205 of 1996 and after hearing the parties, this Court vide its order dated 6-2-1997 had passed an order to wind up the GSTC and the Official

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1973. On 24-4-1975, Textile Undertaking was closed. The Gujarat State Textile Corporation Ltd., was appointed as authorized controller by the Central Government under section 18A of the Industries Development Regulation Act, 1951 by a Notification dated 23-7-1977. The Textile Undertaking was thereafter managed by the Gujarat State Textile Corporation as authorised controller. (ii)With effect from 1-1-1986 under the provisions of the Gujarat Sick Textile Undertaking Nationalization Ordinance, 1986 the Textile Undertaking was nationalized. The rights, title and interest of the owner stood transferred absolutely in the State Government and, thereafter, in GSTC free from any trust, charge line and encumbrances with effect from 1-1-1986 retrospectively. The Gujarat State Textile Undertaking Nationalization Ordinance, 1986 was repealed and substituted by the Gujarat Sick Textile Undertaking Nationalization Act, 1986. (iii)The Textile Undertaking was managed by the GSTC as an owner of the und

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arge its liabilities after 1-1-1986 when the GSTC owned the said undertaking. The statement of affairs of the GSTC in winding up provides break up of liabilities as on 6-2-1997. It is a statement of affairs certified under section 454 of the Companies Act and is filed before this Court by the Directors of Company under winding up on 6-5-1997. The liabilities are for the period between 1-1-1986 and 5-2-1997 when the order for winding up was passed. Secured Creditors : There are no secured creditors having any charge registered with the Registrar of Companies between the period from 1-1-1986 till 6-2-1997. In the statement of affairs secured dues of Gujarat Electricity Board (GEB) are relating to the energy charges and to the extent of security deposit lodged with GEB. The security deposit is against electricity bills and cannot confer any right to the GEB over any asset of the undertaking except appropriation of outstanding dues against such deposit. The total outstanding dues of GEB ar

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Municipal Corporation (Water Tax) 5,11,055 Unpaid Land Revenue 1,15,928 Baroda Municipal Corporation (Gas Octroi) 7,69,184 Sub Total (a) 2,01,94,448 Dues relating to Central Government : Central Division Baroda (Income-tax TDS) 12 Central Excise Authority, Baroda 11,359 Textile Committee Cess 1,29,908 Sub Total (b) 1,41,279 Workers dues including salary deductions : Workers dues 6,15,461 Sub Total (c) 6,15,461 Total (a + b + c) 2,09,51,188 9. The Municipal Commissioner, Vadodara has intimated to the State Government that they will negotiate amount due and payable to the State Government towards the dues of GSTC and this letter is placed on the record of this application. It is further stated that major parties relate to the dues of State Government and dues relating to the Central Government would be settled and paid after due negotiation. 10. The unsecured creditors shown in the statement of affairs are as under:- Particulars Amount Dues relating to State Government : Gujarat Electric

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tween these parties are placed on the record of this application. 12. In view of the aforesaid details, the amount remains due and payable as identified in the Statement of Affairs is as under:- (a) ONGC Rs. 1,67,58,258 (b) Workers dues Rs. 6,15,461 (c) Dues of Maharashtra Cotton Growers Ltd. Rs. 47,94,336 (d) Other creditors Rs. 28,95,210 13. So far as Monogram Mill is concerned, it is located at Rakhial Char Rasta in Ahmedabad City. The Mill was established on various plots of land taken on lease bearing Survey Nos. 245 to 253. Manilal Mulchand obtained all the plots of different survey numbers except land of Survey No. 252 on permanent lease. The land of Survey No. 245 was taken on permanent lease on 25-8-1927 and land of other remaining survey numbers was taken on lease on 14-7-1927. Manilal Chunilal obtained the land of Survey No. 252 on permanent lease from Harmandas Khushaldas and Baldevdas Harmandas on 30-8-1918 who gave this plot to Ben Marsden on lease. Subsequently all the p

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e were entitled to the benefits of the scheme. Accordingly, almost all the employees tendered their voluntary resignations to the management and were paid their terminal benefits and other dues in terms of the VRS Agreement. The total amount spent on payment of terminal benefits to the employees of the Mill under the said VRS Agreement is Rs. 3,075.19 lakhs. The said amount was paid by GSTC out of the funds provided by the State Government. The credit balance of GSTC in the books of Mills as on 6-2-1997 was Rs. 8,922.46 lakhs which represents the total amount advanced to the Mills since its Nationalization by GSTC out of the funds provided by the State Government. 15. It is further stated that the period of management of Mills by its Board of Directors prior to the closure of the Mill in October, 1982 and, thereafter, till Nationalization with effect from 8-11-1985 is pre-nationalization period. The period of management by GSTC since nationalization on 8-11-1985 to its winding up on 6-

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uring the post-nationalization period and remaining outstanding as on 6-2-1997 as well as the liabilities created by the Official Liquidator since 6-2-1997 and remaining outstanding till the date are to be discharged, out of the assets of the undertaking by the Official Liquidator. The category wise break up of liabilities as on 6-2-1997 for post-nationalization period is given in the Statement of Affairs of the GSTC prepared upon its winding up as per statutory requirement under section 454 of the Companies Act, 1956. It was prepared by GSTC and filed before this Court under the affidavit by the then Directors of the GSTC on 6-5-1997. The said statement of affairs contains details of liabilities and assets of all the unit Mills of GSTC individually and consolidated as a whole of GSTC including Monogram Mills. 17. The Chartered Accountant appointed by the State Government had verified the affairs of GSTC under liquidation as on 6-2-1997 and according to the summary of statement and acc

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4,12,086 Sub Total (b) 4,12,086 Workers dues including salary deductions: 2,36,049 Sub Total (c) 2,36,049 Total (a + b + c ) 2,44,96,931 Thus, as stated above, total liability to preferential creditors as per Statement of Affairs drawn on 6-2-1997 from Audited Books of Account is Rs. 2,44, 96,331. Out of total such dues, major portion relates to the dues of the State Government alone. Dues relating to Central Government and dues of workers including on account of deductions from salary aggregate to Rs. 6,48,135 as against dues of Rs. 2,38,48,796 relating to State Government alone. C. Unsecured Creditors – List: E The break up of unsecured creditors listed in List: E of the Statement of Affairs as on 6-2-1997 drawn from the Audited Books of Account of GSTC, is as under:- Dues relating to State Government : Ahmedabad Municipal Corporation – interest 41,72,373 Gujarat Industrial Investment Corporation (GIIC) 76,000 Gujarat Mineral Development Corporation 8,067 Sub Total (a) 42,56,440 Due

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r outsider remaining dues aggregate to Rs. 36,18,285 of which dues of Maharashtra Cotton Growers Federation are under verification, reconciliation and quantification under the instructions of the State Government and upon completion of that exercise, the same will be paid off by the State Government directly. Relevant communication received from GIIC and AMC are placed on the record of this application. 19. It is further stated that out of total post-nationalization dues of Rs. 5,44,61,315 outstanding as on 6-2-1997, dues aggregating to Rs. 2,81,05,236 are related to State Government and dues aggregating to Rs. 2,20,89,659 have been directly settled by State Government. Thus, out of the total liabilities, the aggregate quantum of dues relating to State Government and dues directly discharged by the State Government works out to 92.17 per cent of the total dues. Thus, the major stake in the form of liabilities is of the State Government. 20. In addition to the discharge of dues of post-

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t entire liability of the Company in liquidation and still an ongoing process is initiated by the State Government to discharge the dues of remaining outside creditors. The State Government has undertaken to settle dues relating to State Government directly with respective department and respective institution. On the date of passing of the winding up order by this Court, balance with Bank of Monogram Mills was Rs. 72,557 only. Official Liquidator sold the plant and machineries of the Mills in the year 1999 at a consideration of Rs. 445 lakhs. The Sale Committee constituted for the liquidation proceedings had invited offers for sale of buildings of the Mills and the highest offer of Rs. 400 lakhs is under process of approval by this Court. The said amount which realized together with principal amount of Rs. 445 lakhs already realized by sale of plant and machineries of the Mills in the year 1999 will be more than sufficient to discharge entire liabilities of the Mills stated in the Sta

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or. 22. Mr. Shelat has further submitted that the liabilities relating to the period from the date of nationalization of the undertaking till the winding up of the company falls under the jurisdiction of the Official Liquidator. In respect of the liabilities prior to the date of nationalization vests with the Commissioner of Payments, appointed under the Nationalization Act and Official Liquidator has no obligation with regard to the liabilities of pre-nationalization period. Hence, the State Government is the major creditor of the Mill as well as the sole shareholder as the State Government holds all the equity shares of GSTC. 23. Mr. Shelat has further submitted that the State Government being the sole shareholder and the major creditor of Monogram Mills, Ahmedabad is justified in asking for balance assets remaining to be sold of the undertaking and held by the Official Liquidator for Priyalaxmi Mills and Monogram Mills on behalf of the State Government which is the owner being the s

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the shortfall, if any. 25. Mr. Shelat has further submitted that ever since the winding up order has been passed the Official Liquidator has not taken any steps and thereupon the State Government itself has undertaken the task of discharging the dues, as the State Government was in need of surplus assets of the said Companies. The State Government is, therefore, now major creditor of the Company as well as the sole shareholder, as all the equity shares of GSTC are held by the State Government only. 26. Mr. Shelat has further submitted that the State Government has decided to set up an Information Technology Park in the land admeasuring 64,192 Sq.Mtrs. of Priyalaxmi and Health Institute in the land admeasuring 1,47,034 Sq.Mtrs., of Monogram Mills. It is the public purpose project and would provide better medical facilities to the area nearby. No useful purpose is served by selling the land at the instance of Official Liquidator. It is in public interest that the above surplus assets ad

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ount to the Official Liquidator as claimed. The applicant might have given certain amount to the Company before the date of passing of the winding up order. The dues of the applicant, if any, against the company shall be claimed in liquidation after crystallization of the claim by following the procedure under the Companies (Court) Rules, 1959 and classification thereof for determining priorities of payment in accordance with the provisions of sections 528 to 530 of the Companies Act, 1956. The assets of the Company chosen by the applicant, cannot be transferred and handed over to the applicant on the basis of exclusion of other various classes of the creditors. 28. He has further submitted that it is the duty of the Official Liquidator under direction of this Court to ensure that no creditor or group of creditors or class of creditors march over the legitimate rights of other creditors and classes of creditors, and the assets of the company are liquidated and the proceeds thereof are

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ion of the claims and creditors in terms of sections 529, 529A and 530 of the Companies Act, 1956. He has further submitted that, in case it is found, after inviting claims through newspapers advertisement, that there are no secured creditors or workers ranking pari passu under section 529A of the Companies Act, 1956, the statutory claims against the company as a whole e.g. Claims of Income-tax, Sales Tax, Customs & Excise, and all revenues taxes, cesses and rates dues to the Central or any State Government or a Local Authority shall have priority under section 530 of the Companies Act, 1956 and, therefore, will have to be satisfied in full prior to making any payment to the applicant as an unsecured creditor. It is further submitted that if any occasion for payment to the applicant as contributory arises, it will arise only after satisfying dues of all the creditors in full. Therefore, the applicant neither as an unsecured creditor nor as a contributory can claim assets of the Com

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he Company, on the contrary it is detrimental to the interest of other various classes or creditors. He has, therefore, submitted that the applications are misconceived and deserve to be rejected. 31. Mr. Mehta further submitted that the applicant in the past also moved a similar application being the Company Application No. 348 of 1997 which was disposed of by this Court vide order dated 22-7-1998 granting permission to withdraw the application with liberty to file appropriate application proposing a scheme. The applicant instead of filing an application for scheme of revival of the Company, has moved the present similar application, which deserves to be rejected. 32. The applicant-State of Gujarat has filed affidavit-in-reply to the report of the Official Liquidator. Mr. Shelat in rejoinder submitted that the Company is owned by the State Government and hence it had full financial backing of State Government. Till its winding up order, it was fully capable of discharging its debts. T

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6-2-1997 compiled in four volumes in order to defend the merits of the grounds and contents of the application. He has, however, submitted that this exercise of indepth study of the contents contained in four volumes of Statement of Affairs has already been completed by Official Liquidator way back in the year 1998 with assistance of Chartered Accountant appointed by him. The Chartered Accountant had submitted his observations contained in 60 pages to Official Liquidator along with his letter dated 7-4-1998. The said observations were redirected by Official Liquidator to Ex-Directors of GSTC along with his letter dated 4-6-1998. The observations/remarks/comments of the Chartered Accountant contained in 60 pages were replied by Ex-Director vide his letter dated 17-6-1998. Thereafter, there is no further comment from OL on the contents of Statement of Affairs. It can be made out that OL required almost two months time to simply redirect the comments to Ex-Director while Ex-Director requ

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should be distributed to the creditors in accordance with the priorities laid down therein and residual surplus, if any, should be passed on to owner/shareholder. However, it is nowhere laid down in the Act that all the assets should be first sold out and that too in auction and, thereafter, distribution process should be undertaken. There is no strait jacket formula prescribed under the law for which respondent sought strict compliance. In the instant case, almost entire assets available with OL at present, both in terms of liquid asset and movable and immovable assets are surplus assets. After 11 years of winding up order and handover of sizable amount by way of bank balance to OL in pursuance of winding up order as well as realization of sizable amount by way of sale of part of the assets since winding up, not a single creditor including secured creditors are paid by OL. Since winding up, no payments are made by OL other than payments to workers in pursuance of Court orders, expense

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h regard to present status of liabilities, category of creditors, funds available with OL in the form of bank balance etc. In fact, the vital question raised with regard to bank balance available with OL has been conveniently overlooked and no information has been furnished in that respect. He has submitted that to the best of his information, the OL has rendered account so far from 6-2-1997 to 5-2-2004 only of which last period s accounts i.e., 6-2-2003 to 5-2-2004 were un-audited. According to the said accounts, balance available with OL on 6-2-2004 was Rs. 4,627.70 lakhs. The balance available with OL at present must be much more than that and the said balance alone is many times more than the remaining outsiders dues, i.e., other than own dues of State Government. Hence, the objections and contentions raised by OL are quite contrary to the facts about status of outstanding outsiders dues and full protection to all such dues in the form of available on hand balance with OL in bank a

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Shelat further submitted that the details of outstanding liabilities are given in Statement of Affairs as on 6-2-1997, which are available with OL and lying in his office for the last about 11 years. However, OL has so far not looked at that nor made payment to a single creditor out of that in spite of available funds. On account of failure of OL in discharge of statutory duties, the assets, have remained idle and unutilized for about 11 years. In order to overcome the situation, State Government directly settled the dues of all the secured creditors and commenced the process of settlement of all institutional unsecured creditors. Thus, thereafter, the remaining dues will consist of old unclaimed credit balances and State Government s own dues. He has, therefore, submitted that looking to the facts and circumstances and in view of the factual aspects, the contention of OL to invite the claims is absolutely unwarranted and contrary to the facts of the case. 38. He has further submitted

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f revival or reconstruction for such a company under its name. Further, in case of most of the constituent units, assets other than land have been sold and in the circumstances it is difficult to understand that how a revival scheme can be framed on vacant land in the name of company under liquidation. On the contrary, State Government is functioning exactly with the same spirit of revival and reconstruction for the purpose of generating employment and in the interest of the public at large on different projects under different name and style instead of implementing any such project under the name of GSTC. He has, therefore, submitted that the State Government can be said to be in total conformity with the provisions of the Companies Act, 1956. 40. Mr. Shelat has further submitted with regard to the earlier application filed and withdrawn by the State Government that the ground of objection at that time was absence of any revival and reconstruction scheme. Possession of the assets unde

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tion contractor but will help the State Government to prepare and finalize the plans, drawings, designs and approval of the projects simultaneously with the demolition work and will make possible the implementation of the project immediately upon completion of demolition work. 42. Mr. Shelat has further submitted that the Company Application No. 250 of 2006 was filed by the State Government for taking over possession of the assets of Sarangpur Cotton Mills and Silver Cotton Mills. The said application was decided in favour of the State Government vide order dated 17-7-2006 and the possession of the assets of Mills were handed over to the State Government for public purposes. He has, therefore, submitted that the prayer sought for in the Company Application requires to be granted in the interest of justice by allowing the Company Application. 43. Mr. D. S. Vasavada, learned advocate appearing for the Textile Labour Association has supported this application and submitted that the worker

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ate Government and even if the objections raised by the Official Liquidator in his report, they are not sustainable either on facts or in law. 45. Section 457 of the Act deals with power of Liquidator. Section 457(1)(e) states that the Liquidator in a winding up by the Court shall have power with the sanction of the Court to do all such other things as may be, for winding up the affairs of the Company and distributing its assets. Section 475 of the Act empowers the Court to adjust the rights of the contributories among themselves and distribute any surplus among the persons entitled thereto. It is true that the wordings of section 457(1)(e) as to the distribu-tion of assets amongst the members found are not as explicit as in section 511. Section 511 of the Act deals with distribution of property of the Company voluntarily wound up. However, section 457(1)(e) read with section 475, the result is not different. In the case of a compulsory winding up by Court, the debts and liabilities wi

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powers by the Liquidator under section 457(1) or (2) of the Act. 46. Earlier, the State Government has filed Company Application No. 237 of 2004 and Company Application No. 250 of 2006 for taking over possession of the assets of New Jahangir Vakil Mills, Bhavnagar and Sarangpur Cotton Mills as well as Silver Cotton Mills, Ahmedabad and the said applications were decided in favour of the State Government vide order dated 23-12-2005 and 17-7-2006 respectively and the possession of the immovable assets of the Mills Companies were handed over to the State Government for public purposes. Even possession of immovable assets of New Swadeshi Mills, Ahmedabad and Bhalakia Mills, Ahmedabad was also handed over to the State Government under the order of this Court. The State Government has decided to put the land of these Mills Companies into various public purposes, such as a Jems and Jewellary Park at Bhavnagar, Apparel Park at Ahmedabad, Health Institute and Hospital at Ahmedabad respectively

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ADDITIONAL DUTIES OF EXCISE (GOODS OF SPECIAL IMPORTANCE)

THE Central Excise – Schedules – APPENDIX-I THEADDITIONAL DUTIES OF EXCISE (GOODSOFSPECIAL IMPORTANCE) ACT, 1957(58OF1957) THE TENTH SCHEDULE of the Finance Act, 2005 (See section 116) 'FIRST SCHEDULE [See section 3( 1 )] NOTES 1. In this Schedule,”tariff item”, “heading” ,”sub-heading” and “Chapter” mean respectively a tariff item, heading, sub-heading and Chapter in the First Schedule to the Central Excise TariffAct,1985(5of1986). 2. The rules for the interpretation of the First Schedule to the Central Excise TariffAct,1985(5of1986),the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this Schedule. Tariff_Item ____ Description of goods Unit Rate of Additional Duty (1) (2) (3) (4) 1701 CANE OR BEET SUGAR AND CHEMICALLY PURE S

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5007 WOVEN FABRICS OF SILK OR OF SILK WASTE 5007 10 00 – Fabrics of noil silk m2 Nil 5007 20 – Other fabrics, containing 85 % or more by weight of silk or of silk waste other than noil silk : 5007 20 10 Sarees m2 Nil 5007 20 90 Other m2 Nil 5007 90 00 – Other fabrics m2 Nil 5111 WOVEN FABRICS OF CARDED WOOL EXCLUDING HAIR BELTING – Containing 85 % or more by weight of wool : 5111 11 Of a weight not exceeding 300 g/m2 : 5111 11 10 Unbleached m2 8% 5111 11 20 Bleached m2 8% 5111 11 30 Dyed m2 8% 5111 11 40 Printed m2 8% 5111 11 90 Other m2 8% 51

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8% 5111 30 90 Other m2 8% 5111 90 – Other : 5111 90 10 Unbleached m2 8% 5111 90 20 Bleached m2 8% 5111 90 30 Dyed m2 8% 5111 90 40 Printed m2 8% 5111 90 90 Other m2 8% 5112 WOVEN FABRICS OF COMBED WOOL EXCLUDING HAIR BELTING – Containing 85 % or more by weight of wool: 5112 11 Of a weight not exceeding 200 g/m2 : 5112 11 10 Unbleached m2 8% 5112 11 20 Bleached m2 8% 5112 11 30 Dyed m2 8% 5112 11 40 Printed m2 8% 5112 11 90 Other m2 8% 5112 19 Other :

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m2 8% 5112 90 – Other : 5112 90 10 Unbleached m2 8% 5112 90 20 Bleached m2 8% 5112 90 30 Dyed m2 8% 5112 90 40 Printed m2 8% 5112 90 90 Other m2 8% 5208 WOVEN FABRICS OF COTTON, CONTAINING 85% OR MORE BY WEIGHT OF COTTON, WEIGHING NOT MORE THAN 200 g/m2 – Unbleached: 5208 11 Plain weave, weighing not more than 100 g/m2 : 5208 11 10 Dhoti m2 8% 5208 11 20 Saree m2 8% 5208 11 30 Shirting fabrics m2 8% 5208 11 40 Casement m2 8% 5208 11 90 Other m2 8% 5208 12 Plain weave, weighing more than 100 g/

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ve, weighing not more than 100 g/m2 : 5208 21 10 Dhoti m2 8% 5208 21 20 Saree m2 8% 5208 21 30 Casement m2 8% 5208 21 40 Shirting fabrics m2 8% 5208 21 50 Cambrics (including madapollam and jaconet) m2 8% 5208 21 60 Mulls (including limbric and willaya) m2 8% 5208 21 70 Muslin (including lawn, mulmul and organdi) m2 8% 5208 21 80 Voils (excluding leno fabrics) m2 8% 5208 21 90 Other m2 8% 5208 22 Plain weave, weighing more than 100 g/m2 : 5208 22 10 Dhoti m2 8% 5208 22 20 Saree m2 8% 5208 22 30 Shirting fabrics m2 8% 5208 22 40

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e m2 8% 5208 29 90 Other m2 8% – Dyed : 5208 31 Plain weave, weighing not more than 100 g/m2 : 5208 31 10 Lungi m2 8% 5208 31 20 Saree m2 8% 5208 31 30 Shirting fabrics m2 8% 5208 31 40 Casement m2 8% 5208 31 50 Cambrics (including madapollam and jaconet) m2 8% 5208 31 60 Mull (including limbric and willaya) m2 8% 5208 31 70 Muslin (including lawn mulmul and organdi) of m2 8% carded or combed yarn 5208 31 80 Voils (excluding leno fabrics) m2 8% 5208 31 90 Other m2 8% 5208 32 Plain weave, weighing more than 100 g/m2 : 5208 32 10

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(including mazri) m2 8% 5208 33 90 Other m2 8% 5208 39 Other fabrics : 5208 39 10 Zari bordered sarees m2 8% 5208 39 90 Other m2 8% – Of yarn of different colours : 5208 41 Plain weave, weighing not more than 100 g/m2 : 5208 41 10 Bleeding Madras m2 8% 5208 41 20 Saree m2 8% 5208 41 30 Shirting fabrics m2 8% 5208 41 40 Bed ticking, domestic m2 8% 5208 41 50 Furnishing fabrics (excluding pile and chenille fabrics) m2 8% 5208 41 90 Other m2 8% 5208 42 Plain weave, weighing more than 100 g/m2 : 5208 42 10 Bleeding Madras m2 8% 5208 42 20

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m2 8% 5208 49 90 Other m2 8% – Printed : 5208 51 Plain weave, weighing not more than 100 g/m2 : 5208 51 10 Lungi m2 8% 5208 51 20 Saree m2 8% 5208 51 30 Shirting fabrics m2 8% 5208 51 40 Casement m2 8% 5208 51 50 Cambrics (including madapollam and jaconet) m2 8% 5208 51 60 Mull (including limbric and willaya) m2 8% 5208 51 70 Muslin (including lawn mulmul and organdi) m2 8% of carded or combed yarn 5208 51 80 Voils (excluding leno fabrics) m2 8% 5208 51 90 Other m2 8% 5208 52 Plain weave, weighing more than 100 g/m2 : 5208 52 10

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5208 59 90 Other m2 8% 5209 WOVEN FABRICS OF COTTON, CONTAINING 85% OR MORE BY WEIGHT OF COTTON, WEIGHING MORE THAN 200 g/m2 – Unbleached : 5209 11 Plain weave : Handloom : 5209 11 11 – Dhoti m2 8% 5209 11 12 – Saree m2 8% 5209 11 13 – Casement m2 8% 5209 11 14 – Sheeting (takia, leopard cloth and other than furnishing) m2 8% 5209 11 19 – Other m2 8% 5209 11 90 Other m2 8% 5209 12 3-thread or 4-thread twill, including cross twill: 5209 12 10 Saree m2 8% 5209 12 20 Shirting fabrics m2 8% 5209 12 30 Furnishing fabrics (excluding pile and chenille

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e m2 8% 5209 21 80 Sheeting (takia, leopardcloth) m2 8% 5209 21 90 Other m2 8% 5209 22 3 -thread or 4 -thread twill, including cross twill : 5209 22 10 Shirting fabrics m2 8% 5209 22 20 Furnishing fabrics (excluding pile and chenille fabrics) m2 8% 5209 22 30 Drill m2 8% 5209 22 90 Other m2 8% 5209 29 Other fabrics : 5209 29 10 Dhoti and saree, zari bordered m2 8% 5209 29 20 Dedsuti, dosuti fabrics, ceretonnes and osamburge m2 8% 5209 29 90 Other m2 8% – Dyed : 5209 31 Plain weave : 5209 31 10 Lungi m2 8% 5209 31 20 Saree

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rdered sarees m2 8% 5209 39 90 Other m2 8% – Of yarns of different colours : 5209 41 Plain weave : 5209 41 10 Bleeding Madras m2 8% 5209 41 20 Saree m2 8% 5209 41 30 Shirting fabrics m2 8% 5209 41 40 Furnishing fabrics (excluding pile and chenille fabrics) m2 8% 5209 41 50 Seersucker m2 8% 5209 41 60 Bedticking, domestic (other than hand dyed) m2 8% 5209 41 70 Flannelette m2 8% 5209 41 90 Other m2 8% 5209 42 00 Denim m2 8% 5209 43 Other fabrics of 3 -thread or 4 -thread twill, including cross twill : 5209 43 10 Bleeding Madras m2 8% 5209 43 2

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m2 8% 5209 51 90 Other m2 8% 5209 52 3-thread or 4-thread twill, including cross twill : 5209 52 10 Shirting fabrics m2 8% 5209 52 20 Furnishing fabrics (excluding pile and chenille fabrics) m2 8% 5209 52 90 Other m2 8% 5209 59 Other fabrics : 5209 59 10 Zari bordered saree m2 8% 5209 59 90 Other m2 8% 5210 WOVEN FABRICS OF COTTON, CONTAINING LESS THAN 85% BY WEIGHT OF COTTON, MIXED MAINLY OR SOLELY WITH MAN-MADE FIBRES, WEIGHING NOT MORE THAN 200 g/m2 – Unbleached : 5210 11 Plain weave : 5210 11 10 Shirting fabrics m2 8% 5210 11 20 Saree m

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Omitted 5210 22 21 Omitted 5210 22 29 Omitted 5210 29 Other fabrics : 5210 29 10 Dhoti and saree, zari bordered m2 8% 5210 29 20 Dedsuti, Dosuti, ceretonnes and osamburge m2 8% 5210 29 90 Other m2 8% – Dyed : 5210 31 Plain weave : 5210 31 10 Shirting fabrics m2 8% 5210 31 20 Coating (including suitings) m2 8% 5210 31 30 Furnishing fabrics (excluding pile and chenille fabrics) m2 8% 5210 31 40 Poplin and broad fabrics m2 8% 5210 31 50 Saree m2 8% 5210 31 60 Voils m2 8% 5210 31 90 Other m2

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m2 8% 5210 41 60 Saree m2 8% 5210 41 70 Voils m2 8% 5210 41 90 Other m2 8% 5210 42 Omitted 5210 42 10 Omitted 5210 42 20 Omitted 5210 42 30 Omitted 5210 42 40 Omitted 5210 42 50 Omitted 5210 42 60 Omitted 5210 42 90 Omitted 5210 49 Other fabrics : 5210 49 10 Zari bordered saree m2 8% 5210 49 90 Other m2 8% – Printed : 5210 51 Plain weave : 5210 51 10 Shirting fabrics m2 8% 5210 51 20

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8% 5211 11 20 Saree m2 8% 5211 11 90 Other m2 8% 5211 12 3-thread or 4-thread twill, including cross twill : 5211 12 10 Shirting fabrics m2 8% 5211 12 20 Twill, not elsewhere specified m2 8% (including gaberdine) 5211 12 30 Damask m2 8% 5211 12 90 Other m2 8% 5211 19 00 Other fabrics m2 8% 5211 20 – Bleached: 5211 20 10 Shirting fabrics m2 8% 5211 20 20 Canvas (including duck) of carded or combed yarn m2 8% 5211 20 30 Flannelette m2 8% 5211 20 40 Saree m2 8% 5211 20 50 Crepe fabrics including Crepe checks

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5211 32 10 Crepe fabrics including crepe checks m2 8% 5211 32 20 Shirting fabrics m2 8% 5211 32 30 Twill, not elsewhere specified m2 8% (including gaberdine) 5211 32 40 Trousers or pant fabrics m2 8% (excluding jeans and crepe) 5211 32 90 Other m2 8% 5211 39 Other fabrics : 5211 39 10 Zari bordered sarees m2 8% 5211 39 90 Other m2 8% – Of yarns of different colours : 5211 41 Plain weave : 5211 41 10 Bleeding Madras m2 8% 5211 41 20 Check shirting (excluding crepe checks) m2 8% 5211 41 30 Shirting m2 8% 5

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ve : 5211 51 10 Shirting fabrics m2 8% 5211 51 20 Furnishing fabrics m2 8% (excluding pile and chenille fabrics) 5211 51 30 Flannelette m2 8% 5211 51 40 Long cloth (chintz) m2 8% 5211 51 50 Saree m2 8% 5211 51 90 Other m2 8% 5211 52 3-thread or 4-thread twill, including cross twill : 5211 52 10 Crepe fabrics including crepe checks m2 8% 5211 52 20 Shirting fabrics m2 8% 5211 52 30 Twill, not elsewhere specified m2 8% (including gaberdine) 5211 52 90 Other m2 8% 5211 59 Other fabrics : 5211 59 10 Zari bordered saree

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404 5407 10 – Woven fabrics obtained from high tenacity yarn of nylon or other polyamides or of polyesters : Unbleached : 5407 10 11 – Parachute fabrics m2 8% 5407 10 12 – Tent fabrics m2 8% 5407 10 13 – Nylon furnishing fabrics m2 8% 5407 10 14 – Umbrella cloth panel fabrics m2 8% 5407 10 15 – Other nylon and polyamide fabrics (filament) m2 8% 5407 10 16 – Polyester suitings m2 8% 5407 10 19 – Other polyester fabrics m2 8% Bleached : 5407 10 21 – Parachute fabrics m2 8% 5407 10 22 – Tent fabrics m2 8% 5407 10 23 – Nylon furnishing fabrics m2 8% 54

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Tent fabrics m2 8% 5407 10 43 – Nylon furnishing fabrics m2 8% 5407 10 44 – Umbrella cloth panel fabrics m2 8% 5407 10 45 – Other nylon and polyamide fabrics (filament) m2 8% 5407 10 46 – Polyester suitings m2 8% 5407 10 49 – Other m2 8% Other : 5407 10 91 – Parachute fabrics m2 8% 5407 10 92 – Tent fabrics m2 8% 5407 10 93 – Nylon furnishing fabrics m2 8% 5407 10 94 – Umbrella cloth panel fabrics m2 8% 5407 10 95 – Other nylon and polyamide fabrics of filament yarn m2 8% 5407 10 96 – Polyester suitings m2 8% 5407 10 99 – Other m2 8% 5407 20 – Woven fabrics obtained from strip or t

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m2 8% 5407 41 12 – Nylon georgette m2 8% 5407 41 13 – Nylon tafetta m2 8% 5407 41 14 – Nylon sarees m2 8% 5407 41 19 – Other m2 8% Bleached : 5407 41 21 – Nylon brasso m2 8% 5407 41 22 – Nylon georgette m2 8% 5407 41 23 – Nylon tafetta m2 8% 5407 41 24 – Nylon sarees m2 8% 5407 41 29 – Other m2 8% 5407 42 Dyed : 5407 42 10 – Nylon brasso m2 8% 5407 42 20 – Nylon georgette m2 8% 5407 42 30 – Nylon tafetta m2 8% 5407 42 40 Nylon sarees m2 8% 5407 42 90 – Other m2 8%

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5407 52 10 – Polyester shirtings m2 8% 5407 52 20 – Polyester suitings m2 8% 5407 52 30 – Terylene and dacron sarees m2 8% 5407 52 40 – Polyester sarees m2 8% 5407 52 90 – Other m2 8% 5407 53 00 Of yarns of different colours m2 8% 5407 54 Printed : 5407 54 10 – Terylene and dacron sarees m2 8% 5407 54 20 – Polyester shirtings m2 8% 5407 54 30 – Polyester sarees m2 8% 5407 54 90 – Other m2 8% – Other woven fabrics, containing 85% or more by weight of polyester filaments : 5407 61 Containing 85% or more by weight of non-textured polyester filaments : 5407 61 10 – Polyester shirtin

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1 – Nylon georgette m2 8% 5407 81 12 – Nylon sarees m2 8% 5407 81 13 – Polyester shirtings m2 8% 5407 81 14 – Polyester suitings m2 8% 5407 81 15 – Terylene and dacron sarees m2 8% 5407 81 16 – Polyester dhoti m2 8% 5407 81 19 – Other m2 8% Bleached : 5407 81 21 – Nylon georgette m2 8% 5407 81 22 – Nylon sarees m2 8% 5407 81 23 – Polyester shirtings m2 8% 5407 81 24 – Polyester suitings m2 8% 5407 81 25 – Terylene and dacron sarees m2 8% 5407 81 26 – Polyester dhoti m2 8% 5407 81 29 – Other m2 8% 5407 82

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70 – Polyester sarees m2 8% 5407 84 90 – Other m2 8% – Other woven fabrics : 5407 91 Unbleached or bleached : 5407 91 10 – Unbleached m2 8% 5407 91 20 – Bleached m2 8% 5407 92 00 Dyed m2 8% 5407 93 00 Of yarns of different colours m2 8% 5407 94 00 Printed m2 8% 5408 WOVEN FABRICS OF ARTIFICIAL FILAMENT YARN, INCLUDING WOVEN FABRICS OBTAINED FROM MATERIALS OF HEADING 5405 5408 10 00 – Woven fabrics obtained from high tenacity m2 8% yarn of viscose rayon – Other woven fabrics, containing 85% or more by weight of artificial filament or strip or the like : 5408 21 Unbleached or bleach

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erent colours m2 8% 5408 24 Printed : Of rayon : 5408 24 11 – Rayon crepe fabrics m2 8% 5408 24 12 – Rayon jacquards m2 8% 5408 24 13 – Rayon brocades m2 8% 5408 24 14 – Rayon georgette m2 8% 5408 24 15 – Rayon tafetta m2 8% 5408 24 16 – Rayon suitings m2 8% 5408 24 17 – Rayon shirtings m2 8% 5408 24 18 – Rayon sarees m2 8% 5408 24 19 – Other m2 8% 5408 24 90 – Other m2 8% – Other woven fabrics : 5408 31 Unbleached or bleached : 5408 31 10 – Unbleached m2 8% 5408 31 20 B

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408 34 15 – Rayon tafetta m2 8% 5408 34 16 – Rayon suitings m2 8% 5408 34 17 – Rayon shirtings m2 8% 5408 34 18 – Rayon sarees m2 8% 5408 34 19 – Other m2 8% 5408 34 20 – Fabrics of continuous filament, other than rayon m2 8% 5408 34 90 – Other m2 8% 5512 WOVEN FABRICS OF SYNTHETIC STAPLE FIBRES, CONTAINING 85% OR MORE BY WEIGHT OF SYNTHETIC STAPLE FIBRES – Containing 85 % or more by weight of polyester staple fibres : 5512 11 Unbleached or bleached : 5512 11 10 – Unbleached m2 8% 5512 11 20 – Bleached m2 8% 5512 19 Other : 5512 19 10 – Dyed m2 8% 5512 19 20 –

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Other m2 8% 5513 WOVEN FABRICS OF SYNTHETIC STAPLE FIBRES, CONTAINING LESS THAN 85% BY WEIGHT OF SUCH FIBRES, MIXED MAINLY OR SOLELY WITH COTTON, OF A WEIGHT NOT EXCEEDING 170 g/m2 – Unbleached or bleached : 5513 11 Of polyester staple fibres, plain weave : 5513 11 10 – Unbleached m2 8% 5513 11 20 – Bleached m2 8% 5513 12 3 -thread or 4 -thread twill, including cross twill, of polyester staple fibres : 5513 12 10 – Unbleached m2 8% 5513 12 20 – Bleached m2 8% 5513 13 Other woven fabrics of polyester staple fibres : 5513 13 10 – Unbleached m2 8% 5513 13 20 – Bleached m2 8% 5513 19

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tted 5513 43 00 Omitted 5513 49 00 Other woven fabrics m2 8% 5514 WOVEN FABRICS OF SYNTHETIC STAPLE FIBRES, CONTAINING LESS THAN 85% BY WEIGHT OF SUCH FIBRES, MIXED MAINLY OR SOLELY WITH COTTON, OF A WEIGHT EXCEEDING 170 g/m2 – Unbleached or bleached : 5514 11 Of polyester staple fibres, plain weave : 5514 11 10 – Unbleached m2 8% 5514 11 20 – Bleached m2 8% 5514 12 3 -thread or 4 -thread twill, including cross twill, of polyester staple fibres : 5514 12 10 – Unbleached m2 8% 5514 12 20 – Bleached m2 8% 5514 13 Omitted 5514 13 10 Omitted 5514 13 20 Omitted

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8% 5514 30 19 – Other woven fabrics m2 8%”; – Printed : 5514 41 00 Of polyester staple fibres, plain weave m2 8% 5514 42 00 3-thread or 4-thread twill, including cross twill, m2 8% of polyester staple fibres 5514 43 00 Other woven fabrics of polyester staple fibres m2 8% 5514 49 00 Other woven fabrics m2 8% 5515 OTHER WOVEN FABRICS OF SYNTHETIC STAPLE FIBRES – Of polyester staple fibres : 5515 11 Mixed mainly or solely with viscose rayon staple fibres : 5515 11 10 – Unbleached m2 8% 5515 11 20 – Bleached m2 8% 5515 11 30 – Dyed m2 8% 5515 11 40 – Printed m2

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Dyed m2 8% 5515 19 40 – Printed m2 8% 5515 19 90 – Other m2 8% – Of acrylic or modacrylic staple fibres : 5515 21 Mixed mainly or solely with man-made filaments : 5515 21 10 – Unbleached m2 8% 5515 21 20 – Bleached m2 8% 5515 21 30 – Dyed m2 8% 5515 21 40 – Printed m2 8% 5515 21 90 – Other m2 8% 5515 22 Mixed mainly or solely with wool or fine animal hair : 5515 22 10 – Unbleached m2 8% 5515 22 20 – Bleached m2 8% 5515 22 30 – Dyed m2 8% 5515 22 40 – Printed m2 8% 5515 22 90 – Other m2 8% 5515 29 Other :

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Omitted 5515 99 Other : 5515 99 10 – Unbleached m2 8% 5515 99 20 – Bleached m2 8% 5515 99 30 – Dyed m2 8% 5515 99 40 – Printed m2 8% 5515 99 90 – Other m2 8% 5516 WOVEN FABRICS OF ARTIFICIAL STAPLE FIBRES – Containing 85 % or more by weight of artificial staple fibres : 5516 11 Unbleached or bleached : 5516 11 10 – Unbleached m2 8% 5516 11 20 – Bleached m2 8% 5516 12 00 Dyed m2 8% 5516 13 00 Of yarns of different colours m2 8% 5516 14 Printed : 5516 14 10 – Spun rayon printed shantung m2 8% 5516 14 20

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m2 8% 5516 33 00 Of yarns of different colours m2 8% 5516 34 00 Printed m2 8% – Containing less than 85 % by weight of artificial staple fibres, mixed mainly or solely with cotton: 5516 41 Unbleached or bleached : 5516 41 10 – Unbleached m2 8% 5516 41 20 – Bleached m2 8% 5516 42 00 Dyed m2 8% 5516 43 00 Of yarns of different colours m2 8% 5516 44 00 Printed m2 8% – Other : 5516 91 Unbleached or bleached : 5516 91 10 – Unbleached m2 8% 5516 91 20 – Bleached m2 8% 5516 92 00 Dyed m2 8% 5516 93 00 Of yarns of different colours m2

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8% 5801 33 00 Other weft pile fabrics m2 8% 5801 34 Warp pile fabrics, 'epingle' (uncut): 5801 34 10 – Velvet m2 8% 5801 34 90 – Other m2 8% 5801 35 00 Warp pile fabrics, cut m2 8% 5801 36 Chenille fabrics: 5801 36 10 – Carduroys m2 8% 5801 36 90 – Other m2 8% 5802 TERRY TOWELLING AND SIMILAR WOVEN TERRY FABRICS, OTHER THAN NARROW FABRICS OF HEADING 5806; TUFTED TEXTILE FABRICS, OTHER THAN PRODUCTS OF HEADING 5703 – Terry towelling and similar woven terry fabrics, of cotton: 5802 11 00 Unbleached m2 8% 5802 19 Other: 5802 19 10 – Bleached m2 8%

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5803 00 93 – Of artificial fibre m2 8% 5803 00 99 – Other m2 8% 5804 LACE IN THE PIECE, IN STRIPS OR IN MOTIFS, OTHER THAN FABRICS OF HEADINGS 6002 TO 6006 – Mechanically made lace: 5804 21 00 Of man-made fibres kg. 8 % 5804 29 Of other textile materials: 5804 29 10 – Of cotton kg. 8 % 5806 NARROW WOVEN FABRICS (OTHER THAN TULLES, OTHER NET FABRICS AND GOODS OF HEADINGS5807, 5808, 5809 AND 5811) 5806 10 00 – Woven pile fabrics (including terry towelling and similar terry fabrics) and chenille fabrics kg. Nil 5806 20 00 – Other woven fabrics, containing by weight kg. Nil 5% or more of elastomeric yarn or rubber thread – Other woven

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5810 91 00 Of cotton kg. Nil 5810 92 Of man-made fibres : 5810 92 10 – Embroidered badges, motifs and the like kg. Nil 5810 92 90 – Other kg. Nil 5810 99 00 Of other textile materials kg. Nil 5901 TEXTILE FABRICS COATED WITH GUM OR AMYLACEOUS SUBSTANCES, OF A KIND USED FOR THE OUTER COVERS OF BOOKS OR THE LIKE; TRACING CLOTH; PREPARED PAINTING CANVAS; BUCKRAM AND SIMILAR STIFFENED TEXTILE FABRICS 5901 10 – Textile fabrics coated with gum or amylaceous substances, of a kind used for the outer covers of books or the like: 5901 10 10 – Of cotton m2 8% 5901 10 20 – Prepared painting canvas m2 8% 5901 10 90 – Other m2 8% 5901 90 – Other: 5901 90 10

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5903 TEXTILE FABRICS, IMPREGNATED, COATED, COVERED OR LAMINATED WITH PLASTICS, OTHER THAN THOSE OF HEADING 5902 5903 10 – With polyvinyl chloride: 5903 10 10 – Imitation leather fabrics of cotton m2 5% 5903 10 90 – Other m2 5% 5903 20 – With polyurethane: 5903 20 10 – Imitation leather fabrics, of cotton m2 5% 5903 20 90 – Other m2 5% 5903 90 – Other: 5903 90 10 – Of cotton m2 5% 5903 90 20 – Polyethylene laminated jute fabrics m2 5% 5903 90 90 – Other m2 5% 5907 FABRICS COVERED PARTIALLY OR FULLY WITH TEXTILE FLOCKS, OR WITH PREPARATION CONTAINING TEXTILE FLOCKS: Fabrics covered partially or fully with tex

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G BY WEIGHT 5% OR MORE OF ELASTOMERIC YARN OR RUBBER THREAD, OTHER THAN THOSE OF HEADING 6001 6002 40 00 – Containing by weight 5% or more of kg. 8 % elastomeric yarn but not containing rubber thread 6002 90 00 – Other kg. 8 % 6003 KNITTED OR CROCHETED FABRICS OF A WIDTH NOT EXCEEDING 30 CM, OTHER THAN THOSE OF HEADING 6001 OR 6002 6003 10 00 – Of wool or fine animal hair kg. 8 % 6003 20 00 – Of cotton kg. 8 % 6003 30 00 – Of synthetic fibres kg. 8 % 6003 40 00 – Of artificial fibres kg. 8 % 6003 90 00 – Other kg. 8 % 6004 KNITTED OR CROCHETED FABRICS OF A WIDTH EXCEEDING 30 CM, CONTAINING BY WEIGHT 5% OR MORE OF ELASTOMERIC YARN OR RUBBER THREAD

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ent colours kg. 8% 6005 34 00 Printed kg. 8 % – Of artificial fibres : 6005 41 00 Unbleached or bleached kg. 8 % 6005 42 00 Dyed kg. 8 % 6005 43 00 Of yarns of different colours kg. 8 % 6005 44 00 Printed kg. 8 % 6006 OTHER KNITTED OR CROCHETED FABRICS – Of Cotton: 6006 21 00 Unbleached or bleached kg. 8 % 6006 22 00 Dyed kg. 8 % 6006 23 00 Of yarns of different colours kg. 8 % 6006 24 00 Printed kg. 8 % – Of synthetic fibres: 6006 31 00 Unbleached or bleached kg. 8 % 6006 32 00 Dyed kg. 8 % 6006 33 00 Of ya

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