judgement:
ivil Appeal No. 2697 & 2698 of 1989.
From the Judgment and Order dated 24.3.87 & 1.7.87 of the Andhra Pradesh High Court in Writ Petition No. 105 & 8737 of 1987.
N.A. Palkhivala, P.A.S. Rao, D.N. Mishara, Ranganatha Chari and Ms. Rubi Anand for the Petitioners.
S.C. Manchanda, Ms. A. Subhashini and B.B. Ahuja for the Respondents.
These appeals by Special Leave are directed against the dismissal by the Andhra Pradesh High Court of Writ Petitions filed by the appellant.
The appellant, Messrs Electronics Corporation of India Limited, entered into a memorandum of understanding with a Norwegian company at Paris.
This was followed by an agree ment dated 2 May, 1986 executed at Hyderabad.
Under that agreement the Norwegian company was to provide technical know how and technical services, including facilities for the training of personnel, to the appellant in connection with the manufacture of computers.
The consideration for the technical know how and technical services was represented by Norwegian currency NOK 32 Millions equivalent to about Rs.575 lakhs.
Eighty five per cent of the consideration was to be paid from credit provided by Norwegian authorities and the balance fifteen per cent was to be paid out of free foreign exchange made available by the State Bank of India, London Branch.
It is not in dispute that the agreement had received the careful consideration of the Reserve Bank of India and of the Central Government.
The appellant approached the Income Tax Officer for the grant of a 'No Objection Certificate ' as contemplated under section 195(2) of the 997 Income Tax Act, 1961, to enable it to remit the instalments due without any obligation to deduct any income tax at source, but the request was denied.
On 23 December, 1986 the appellant made an application to the Commissioner of Income Tax for a direction to the Income tax Officer, but the Commissioner rejected the application.
The Commissioner took the view that having regard to Section 9(1)(vii) and Section 195 of the Income Tax Act, 1961, the payment constituted income which was deemed to accrue or arise in India and was liable to deduction of tax at source.
The appellant filed a Writ Petition against the order of the Commissioner, and assailed the constitutional validity of Section 9(1)(vii) of the Act.
It was urged before the High Court that Parliament was not competent to enact Sec tion 9(1)(vii) of the Act inasmuch as the provision possess es as extra territorial operation without any nexus between the person sought to be taxed and the country seeking to tax.
It was further contended that even after the introduc tion of Section 9(1)(vii) by the Finance Act of 1976 with effect from 1 June, 1976, the requirement of a business connection of a foreign Company was required, and the case was governed by CORBORANDUM CO.
vs C.I.T., [1977] 108 I.T.R. 335.
It was also urged that after the introduction of the Explanation by the Finance Act of 1977 with effect from 1 April, 1977 Section 9(1)(vii) creates an invidious discrimi nation among companies which had entered into a foreign collaboration agreement prior to 1 April, 1976 and those who have done so after that date, and that therefore Article 14 was violated.
The High Court repelled all the contentions of the appellant and dismissed the Writ Petition.
A similar Writ Petition was filed by the appellant against an order of the Commissioner of Income tax declining to direct the grant of a 'No Objection Certificate, in relation to disbursement made under a licence agreement with Messrs Control Data Indo Asia Company, U.S.A., and the Writ Petition was dis missed by the High Court for the reasons which had found favour with it in the earlier case.
It is contended by learned counsel for the appellant that section 9(1)(vii) of the Income Tax Act is ultra vires inasmuch as it enables the levy of income tax on the Norwegian company in the one case and the American company in the other in circumstances which appear to show that the statute operates extra territorially without the need for any nexus between anything done in India and the person sought to be taxed.
section 9(1)(vii) declares: "9(1) The following incomes shall be deemed to accrue or 998 arise in India (i). . . . . . . . . . . . . . . . (vii) income by way of fees for technical services payable by (a) the Government; or (b) a person who is a resident, except where the fees are payable in respect of services utilised in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India; or (c) a person who is a non resident, where the fees are payable in respect of services uti lised in a business or profession carried on by such person in India or for the purposes of making or earning any 'income from any source in India; Explanation.
For the purposes of this clause, "fees for technical services" means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of tech nical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head "Salaries".
It seems that the Revenue is proceeding on the basis that the foreign company is liable to tax and that therefore the petitioner is obliged to deduct at source the tax pay able by the foreign company.
We are informed that the serv ices are rendered by the foreign company in the nature of training abroad to personnel belonging to the appellant, and that payment to the foreign company is also effected abroad.
The Revenue rests its case on section 9(1)(vii)(b) of the Act, and the question is whether on the terms in which the provi sion is couched it is ultra vires.
Now it is perfectly clear that it is envisaged under our constitutional scheme that Parliament in India may make laws which operate 999 extra territorially.
article 245(1) of the Constitution pre scribes the extent of laws made by Parliament.
They may be made for the whole or any part of the territory of India.
article 245(2) declares that no law made by Parliament shall be deemed to be invalid on the ground that it would have extra territorial operation.
Therefore, a Parliamentary statute having extra territorial operation cannot be ruled out from contemplation.
The operation of the law can extend to persons, things and acts outside the territory of India.
The general principle, flowing from the sovereignty of States, is that laws made by one State can have no operation in another State.
The apparent opposition between the two positions is reconciled by the statement found in British Columbia Electric Railway Company Limited vs The King, "A legislature which passes a law having extra territorial operation may find that what it has enacted cannot be directly enforced, but the Act is not invalid on that account, and the courts of its country must enforce the law with the machinery available to them.
" In other words, while the enforcement of the law cannot be contemplated in a foreign State, it can, nonetheless, be enforced by the courts of the enacting State to the degree that is permissible with the machinery available to them.
They will not be regarded by such courts as invalid on the ground of such extra territoriality.
But the question is whether a nexus with something in India is necessary.
It seems to us that unless such nexus exists Parliament will have no competence to make the law.
It will be noted that Article 245(1) empowers Parliament to enact law for the whole or any part of the territory of India.
The provocation for the law must be found within India itself.
Such a law may have extra territorial opera tion in order to subserve the object, and that object must be related to something in India.
It is inconceivable that a law should be made by Parliament in India which has no relationship with anything in India.
The only question is then whether the ingredients in terms of the impugned provi sion indicate a nexus.
The question is one of substantial importance, specially as it concerns collaboration agree ments with foreign companies and other such arrangements for the better development of industry and commerce in India.
In view of the great public importance of the question, we think it desirable to refer these cases to a Constitution Bench, and we do so order.

summary/full:
The appellant company entered into an agreement with a Norwegian Company under which the latter was to provide technical knowhow and technical services including facili ties for the training of personnel of the appellant company in connection with the manufacture of computers for a con sideration of NOK 32 Millions, Norwegian Currency, equiva lent to Rs.575 lakhs.
The appellant company applied to the Income Tax Officer for 'No Objection Certificate ' under Section 195(2) of the Income Tax, 1961 in order to remit the instalments due under the agreement without deducting the tax at source but the same was refused.
The application of the appellant company to the Commis sioner of Income Tax seeking a direction to the Income Tax Officer was also rejected on the ground that having regard to Sections 9(1)(vii) and 195 of the Income Tax Act, 1961 the payment to the foreign company constituted deemed accru al of Income in India and therefore the appellant was obliged to deduct at source the tax payable by the foreign company.
A writ petition filed by the appellant against the order of the Commissioner and assailing the constitutional validity of Section 9(1)(vii) of the 995 Income tax Act, 1961 was dismissed by the High Court of Andhra Pradesh.
A similar writ petition filed against the order of refusal of 'No Objection Certificate ' by the Com missioner of Income Tax in relation to disbursement made under an agreement with a U.S. Company was also dismissed by the High Court.
Against the decision of the High Court appeals were filed in this Court challenging the vires of Section 9(1)(vii) of the Income Tax Act, 1961 contending that (i) it was extra territorial in operation, and (ii) there was no nexus between anything done in India and the persons sought to be taxed.
Referring the matter to a Constitution Bench, HELD: 1.
It is envisaged under our constitutional scheme that Parliament in India may make laws which operate extra territorially.
Article 245(2) declares that no law made by Parliament shall be deemed to be invalid on the ground that it would have extra territorial operation.
Therefore, a Parliamentary statute having extra territorial operation cannot be ruled out from contemplation.
The operation of the law can extend to persons, things and acts outside the territory of India.
The general principle, flowing from the sovereignty of States, is that laws made by one State can have no operation in another State.
But while the enforce ment of the law cannot be contemplated in a foreign State, it can, nonetheless, be enforced by the courts of the enact ing State to the degree that is permissible with the machin ery available to them.
They will not be regarded by such courts as invalid on the ground of such extra territoriali ty.
[998H, 999A B, D] British Columbia Electric Railway Company Limited vs The King, , applied.
But unless nexus exists Parliament will have no competence to make the law.
Article 245(1) empowers Parlia ment to enact law for the whole or any part of the territory of India.
The provocation for the law must be found within India itself.
Such a law may have extra territorial opera tion in order to subserve the object, and that object must be related to something in India.
It is inconceivable that a law should be made by Parliament in India which has no relationship with anything in India.
[999E F] 2.1 In view of the great public importance of the ques tion, whether the ingredients of the impugned provision indicate a nexus 996 these cases are referred to a Constitution Bench.
[999H] Corborandum Co. vs C.I.T., ; referred to.


judgement:
vil Appeal No. 764 (NM) of 1988.
From the Judgment and Order dated 13.11.1987 of the Monopolies and Restrictive Trade Practices Commission in unfair Trade Practices Enquiry No. 76 of 1985.
G.L. Sanghi, Parveen Anand, S.K. Mehta, Dhruv Mehta, S.M. Satin and Atul Nanda for the Appellant.
Anil Dev Singh and Hemant Sharma for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
This appeal under section 55 of the (hereinafter referred to as the Act) is directed against the decision of the MonopOlies and Restrictive Trade Practices Commission dated November 13, 1987 in the Unfair Trade Practices Enquiry No. 76 of 1985 passed under section 36 D(1) of the Act forbidding the appellant Company from issuing certain type of advertisement as indicated in the order.
The Commission issued a show cause notice under section 36 B of 982 the Act to the appellant Company informing it that a pro ceeding had been instituted for making an inquiry whether the Company was indulging in certain unfair trade practices prejudicial to public interest within the meaning of section 36 A. A copy of the notice has been attached to the petition of appeal as Annexure 'C ', wherein it was alleged that, (i) although the Company was manufacturing 'Novino ' batteries in collaboration with M/s Mitsushita Electric Industrial Co. Ltd, and not with National Panasonic of Japan, it was issuing advertisements announcing that 'Novi no ' batteries are manufactured in collabora tion with National Panasonic of Japan using National Panasonic techniques, and (ii) the representation that 'Novino ' batter ies are manufactured by joint venture or collaboration with National Panasonic was false and misleading and thereby causing loss or injury to the consumers.
In its reply the Company (appellant before us) denied to have made any wrong representation in the advertisements.
It was asserted that the Company has actually entered into a collaboration agreement with M/s Mitsushita Electric Indus trial Ltd. of Japan for the manufacture of dry cell batter ies, and was adopting the process for manufacturing 'Novino ' batteries as is employed by Mitsushita Ltd. The agreement has been duly approved by the Ministry of Industry, Govern ment of India.
It is further stated that the Mitsushita Ltd. of Japan is better known by its products described by the names "National" and "Panasonic" and there is no question of misleading anybody by the description of the Japanese Compa ny by its products.
Rejecting the appellant 's explanation, the Commission passed the impugned order.
As is clear from the show cause notice, it has been assumed that the appellant Company is manufacturing 'Novino ' batteries in collaboration with Mitsushita Ltd., but the question is whether, in the circumstances, it can claim that it is making "batteries in collaboration with National Panasonic of Japan", and further whether the act, complained of, will be covered by the provisions of section 36 B and 36~D of the Act authorising the respondent Commission to make an enquiry and issue appropriate directions.
The expression "unfair trade practice" has been defined in section 36 A as a trade practice which adopts any or more of the practices enumerated in the section.
It has been contended before us by the learned counsel for the respondent, and the judgment 983 under appeal also holds, that the case is covered by clauses (i) and (v) of section 36 A(1) of the Act.
The relevant portion of section 36 A is reproduced below: "36A Definition of unfair trade practice.
In this part, unless the context otherwise requires, 'Unfair trade Practice ' means a trade practice which, for the purpose of promotion the sale, use or supply of any goods or for the provision of any services, adopts one or more of the following practices and thereby causes loss or injury to the consumers of such goods or services, whether by eliminating or restricting competition or otherwise, namely: (1) The practice of making any statement, whether orally or in writing or by visible representation which, (i) falsely represents that the goods are ' of a particular standard, quality, grade, compo sition, style or model; ' . . . . . . . . (v) represents that the seller or the supplier has a sponsorship or approval or affiliation which such seller or supplier.
does not have;" 4.
It is the admitted position that "National" and "Panasonic" are the names given by the Mitsushita Ltd. to some of its products, and are not the names of the manufac turing company itself.
The advertisements XXX therefore, do not state correctly when they claim that the appellant Company is working in collaboration with "National" and "Panasonic".
Instead, they should have mentioned the Company by its correct name in the advertisements.
The question is as to whether these advertisement come within the scope of clauses (i) and (v).
The Commission in the impugned judgment has said: "It is true that the Director (Research) has not carried out any practical research to discover how far the National & Panasonic Batteries of Japan and the Novino Batteries manufactured by the respondent company vary in or conform to quality, benefits and durability and to what extent the use of the names Pana sonic and National to signify 984 collaboration has been confusing for the customer m his choice of Novino Battery.
Yet I do feel that bearing in mind the Indian condi tions the use of National and Panasonic to signify collaboration will have a misleading effect on the minds of the common class of customers, particularly when Novino Battery is projected in the setting of advertisement exhibit A 1/a side by side the National.
Panasonic and Technics Batteries.
The show cause notice served on the appellant does not take any exception to the use of the word "collabora tion" in the advertisement in question.
The grievance is against the use of the names of the product "National" and "Panasonic" in place of the Company which is manufacturing them.
The issue thus is confined by the charge in the show cause notice which is very limited in its scope.
The Commis sion has taken note of the case of the appellant that since "National" and "Panasonic" are well known names in India while their manufacturing company, the Mitsushita Ltd., is not, the advertisements have mentioned the brand names instead of the manufacturing company; but has refused to accept this plea as a good defence.
We do not agree.
The Act as it originally stood did not contain any provision for protection of consumers against false or misleading advertisements or other similar and unfair trade practices.
By providing for measures against restrictive and monopolistic trade practices, it was perhaps assumed that the consumers also, as a result, will get a fair deal.
However, experience indicated otherwise, and following the recommendations of a Committee, it was considered necessary to amend the Act.
In the fast changing modern world of today advertising goods is a well recognised marketing strategy.
The consumers also need it, as the articles which they require for their daily life are of a great variety and the knowledge of an ordinary man is imperfect.
If the manufac turers make available, by proper publicity, necessary de tails about their products, they come as great help to the man in the street.
Unfortunately, some of the advertisements issued for this purpose make exaggerated and sometime base less representations about the quality, standard and per formance, with an object of attracting purchasers.
It was, therefore, considered necessary to have statutory regula tions insisting that, while advertising, the seller must speak the truth.
Accordingly sections 36 A to 36 E in part B were inserted in Chapter V of the Act by an amendment in 1984.
However, the question in controversy has to be answered by 985 construing the relevant provisions of the Act.
The defini tion of "unfair trade practice" in section 36 A mentioned above is not inclusive or flexible, but specific and limited in.its contents.
The object is to bring honesty and truth in the relationship between the manufacturer and the consumer.
When a problem arises as to whether a particular act can be condemned as an unfair trade practice or not, the key to the solution would be to examine whether it contains a false statement and is misleading and further what is the effect of such a representation made by the manufacturer on the common man? Does it lead a reasonable person in the position of a buyer to a wrong conclusion? The issue can not be resolved by merely examining whether the representation is correct or incorrect in the literal sense.
A representation containing a statement apparently correct in the technical sense may have the effect of misleading the buyer by using tricky language.
Similarly a statement, which may be inaccu rate in the technical literal sense can convey the truth and sometimes more effectively than a literally correct state ment.
It is, therefore, necessary to examine whether the representation, complained of, contains the element of misleading the buyer.
Does a reasonable man on reading the advertisement form a belief different from what the truth is? The position will have to be viewed with objectivity, in an impersonal manner.
It is stated in Halsbury 's Laws of England (Fourth Edition, paragraphs 1044 and 1045) that a representation will be deemed to be false if it is false in substance and in fact; and the test by which the representa tion is to be judged is to see whether the discrepancy between the fact as represented and the actual fact is such as would be considered material by a reasonable representee.
"Another way of stating the rule is to say that substantial falsity is, on the one hand, necessary, and, on the other, adequate, to establish a misrepresentation" and "that 'where the entire representation is a faithful picture or tran script of the essential facts, no falsity is established, even though there may have been any number of inaccuracies in unimportant details.
Conversely, if the general impres sion conveyed is false, the most punctilious and scrupulous accuracy in immaterial minutiae will not render the repre sentation true.
" Let us examine the relevant facts of this case in this background.
The Mitsushita Ltd. is not a popular name in this country while its products "National" and "Panasonic" are.
An advertisement mentioning merely Mitsushita Ltd. may, therefore, fail to convey anything to an ordinary buyer unless he is also told that it is the same Company which manufactures products known to him by the names "National" and "Panasonic".
If such were the position, there would not have been any scope for objection.
However, in our view the same 986 effect is produced by the impugned advertisements.
It has to be remembered that there is no other company with the name of "National" and "Panasonic" and there is no scope for any confusion on that score.
Where the reference is being made to the standard of the quality, it is not material whether the manufacturing Company is indicated by its accurately correct name or by its description with reference to its products.
We, therefore, hold that the erroneous description of the manufacturing Company in the advertisements in ques tion does not attract section 36 A of the Act, although we would hasten to add that it would be more proper for the appellant Company to give the full facts by referring to Mitsushita Ltd. by its correct name and further stating that its products are known by the names "National" and "Panasonic".
The learned counsel for the respondent Commission suggested that the appellant was not entitled to claim "collaboration" with the Japanese Company on the basis of the agreement mentioned earlier.
As the appellant Company is only getting technical knowledge and assistance under the agreement, it is not permissible to claim 'Novino ' batteries as the product of joint venture.
The argument was rightly repelled on behalf of the appellant on the ground that this aspect cannot be examined in the present case in view of the limited scope of the charges as mentioned in the show cause notice quoted above.
If so advised, the Commission will have to hold a fresh inquiry after issuing another show cause notice if it desires to pursue this aspect.
The learned counsel for the appellant also raised several other points in support of the appeal, one of them being that from the facts and circumstances of the case it can not be held that the impugned advertisements are capable of causing any loss or injury to the consumers.
In view of our decision, as mentioned earlier, it is not necessary to deal with the other arguments.
For the reasons mentioned above the impugned judg ment is set aside and the appeal is allowed, but in the circumstances, without costs.
N.V.K. Appeal allowed.

dataset_name: IN-Abs

summary/full:
The MRTP Commission respondent in the appeal issued a show cause notice under Section 36 B of the to the appellant company informing that a proceeding had been instituted for making an inquiry whether the said Company was indulging in certain unfair trade practices prejudicial to the public interest within the meaning of section 36 A of the Act.
It was alleged in the notice that although the appellant company was manufacturing 'Novino ' Batteries in collaboration with M/s Mitsushita Electric Industrial Co. Ltd. and not with National Panasonic of Japan, it was issuing advertisements announcing that 'Novino ' Batteries were manufactured in collaboration with National Panasonic of Japan using Nation al Panasonic techniques, and that the said representation was false and misleading and thereby causing loss or injury to the consumers.
The Company in its reply to the said notice denied having made any wrong representation in its advertisement, and asserted that the company had actually entered into a collaboration agreement with M/s Mitsushita Electric Indus trial Ltd. for the manufacture of dry ceil batteries, and was adopting the process employed by Mitsushita Ltd. for manufacturing 'Novino ' Batteries.
The Company further stated that Mitsushita Ltd. of Japan was better known by its products described by the names 'National ' and 'Panasonic ' and that there was therefore no question of misleading anybody by the description of the Japanese Company by its products.
Rejecting the Company 's explanation the Commission held that bearing in mind the Indian conditions the use of 'N ational ' and 'Panasonic ' to signify collaboration will have a misleading effect on the minds 980 of common class of customers particularly when Novino Bat teries is projected and advertised side by side with Nation al, Panasonic and Technics Batteries in advertisements.
The Commission also refused to accept the plea of the Company that the advertisements have mentioned the brand names instead of the manufacturing company since 'National ' and 'Panasonic ' were well known names in India while the manu facturing company Mitsushita Ltd. was not as a plea of good defence.
On the question whether the appellant company indulged in unfair trade practice under clauses (i) and (v) of section 36 A(1) of the M.R.T.P. Act, 1962.
Allowing the appeal, the Court, HELD: l.(a) The M.R.T.P. Act as it originally stood did not contain any provision for protection of consumers against false or misleading advertisements or other similar and unfair trade practices.
By providing for measures against restrictive and monopolistic trade practices, it was perhaps assumed that the consumers also, as a result, will get a fair deal.
However, experience indicated otherwise, and following the recommendations of a Committee, it was considered necessary to amend the Act.
Accordingly, sections 36 A to 36 E in part B were inserted in Chapter V of the Act by an amendment in 1984.
[984E F; G] 2.
It would be more proper for the appellant Company to give the full facts by referring to Mitsushita Ltd. by its correct name and further stating that its products are known by the name "National" and "Panasonic".
[986C] 3.
An advertisement mentioning merely Mitsushita Ltd. may, therefore, fail to convey anything to an ordinary buyer unless he is also told that it is the same Company which manufactures products known to him by the names "National" and "Panasonic".
If such were the position there would not have been any scope for objection.
However, the same effect is produced by the impugned advertisements.
There is no other company with the name of 'National ' and 'Panasonic ', and there is no scope for any confusion on that score.
[985G H; 986A] 4.
Where the reference is being made to the standard of the quality, it is not material whether the manufacturing company is indicated by its actually correct name or by its description with reference to its products.
[986B] 981 5.
The definition of 'unfair trade practice ' in section 36 A is not inclusive or flexible, but specific and limited in its contents.
The object is to bring honesty and truth in relationship between the manufacturer and consumer.
When a problem arises as to whether a particular act can be condem ned as an unfair trade practice or not, the key to the solution would be to examine whether it contains a false statement and is misleading and further what is the effect of such a representation made by the manufacturer on the common man? Does it lead a reasonable person in the position of a buyer to a wrong conclusion? The issue cannot be re solved by merely examining whether the representation is correct or incorrect in the literal sense.
The position will have to be viewed with objectivity in an impersonal manner.
[985A D] Halsbury 's Laws of England, 4th Edn. paras 1044 and 1045; relied on.
The erroneous description of the manufacturing Compa ny in the advertisements in question does not attract section 36 A of the M.R.T.P. Act.
[986B]


judgement:
vil Appeals Nos.
2 4 of 1975.
From the Judgment and Order dated 8th 9th November 1973 of the Gujarat High Court in Estate Duty Reference Nos. 2, 3 and 4 of 1971.
Dr. V. Gauri Shankar and Miss A. Subhashini for the Appel lant.
V.S. Desai, Mrs. A.K. Verma and Joel Peres for the Respondents.
The Judgment of the Court was delivered by PATHAK, CJ.
The facts in these appeals lie within a narrow compass.
One Abdulhussein Gulamhussein Merchant died on 8 February, 1959.
The accountable persons filed returns under the provisions of the and an assessment was made by the Deputy Controller of Estate Duty on 26 February, 1960.
The Estate Duty (Amendment) Act, 1958, repealed the original sections 56 to 65.
Section 59, which substituted for the original section 62, made provision for reassessment.
It came into force with effect from 1 July 1960.
On 21 February, 1962 a notice under the new section 59 of the Act was issued to the accountable person concerned for reopening the assessment on the ground that some property had escaped the levy of estate 990 duty.
The accountable persons raised objections to the reopening of the assessment under section 59.
The Assistant Controller rejected the contentions of the accountable persons and reopened the assessment.
Against the order of reassessment the accountable persons filed three different appeals before the Appellate Controller.
The Appellate Controller allowed the appeals and set aside the reassess ment orders holding that section 59 under which action had been taken by the Assistant Controller was not retrospective in operation.
On appeal by the Revenue, the Tribunal upheld the view of the Appellate Controller relying on the decision of the Bombay High CoUrt in A.N. Mafatlal vs Deputy Controller of Estate Duty, Thereafter three references were made to the High Court at the instance of the Revenue raising the identical question: "Whether Section 59 of the is retrospective in operation and if so, in the facts and circumstances of the case, the reopening of the assessment under section 59 of the said Act was bad in law?" Section 62 as originally enacted read as follows: "Rectification of mistakes relating to valua tion for estate duty:, (1) If, after the determination of the estate duty payable in respect of any estate, it appears to the Controller that by reason of any mistake apparent from the record or of any mistake in the valuation of any property in any case other than a case in which the valuation has been the subject matter of an appeal under the Act or of the omission of any property, the estate duty paid thereon is either in excess of or less than the actual duty payable, he may, either on his own motion or on the appli cation of the person accountable and after obtaining the previous approval of the Board, at any time within three years from the date on which the estate duty was first determined (a) refund the excess duty paid, or, as the ease may be, (b) determined the additional duty payable on the property; Provided that where the person accountable had fraudulently under estimated the value of any property or omitted any property, the period will be six years: 991 Provided further that no order shall be made under this sub section unless the person accountable has been given an opportu nity of being heard.
(2) Nothing contained in sub section (1) shall render any.
person accountable to whom a certificate that the estate duty has been paid is granted liable for any additional duty in excess of the assets of the deceased which are still in his possession, unless the person accountable had fraudulently attempted to evade any part of the estate duty in the first instance.
" The provisions of section 59 introduced by the Amendment Act of 1958 are as follows: "59.
Properly escaping assessment. ' If the Controller, . . (a) has reason to believe that by reason of the omission or failure on the part of the person accountable to submit an account of the estate of the deceased under Section 53 or Section 56 or to disclose fully and truly all material facts necessary for assessment, any property chargeable to estate duty has escaped assessment by reason of undervaluation of the property included in the account or of omission to include therein any property which ought to have been included or of assessment at too low a rate or otherwise, or (b) has, in consequence of any infor mation in his possession, reason to believe notwithstanding that there has not been such omission or failure as is referred to in clause (a) that any property chargeable to estate duty has escaped assessment, whether by reason of under valuation of the property included in the account or of omission to include therein any property which ought to have been included, or of assessment at too low a rate or otherwise, he may at any time, subject to the provisions of section 73A, require the person accountable to submit an account as required under section 53 and may proceed to 992 assess or reassess such property as if the provisions of Section 58 applied thereto." The High Court considered the question of law referred to it at great length and after a detailed judgment answered the question in each case in favour of the assessee.
The Revenue now appeals.
The question is whether the newly enacted section 59 of the is retrospective in operation so as to affect the assessment already completed on the accountable persons.
It is urged that the new section 59 is substantially similar in content as the old section 62 and therefore the new provision must be regarded as retrospective.
The contention may be examined.
The Estate Duty (Amendment) Act, 1958 effected a sub stantial change in the parent Act.
56 to 65 were substi tuted in place of the existing sections 56 to 65, and the origi nally enacted section 62 was repealed.
The original section 62 provid ed essentially for the rectification of mistakes apparent from the record or in the valuation of any property or by reason of the omission of any property.
The newly enacted section 59 deals with property escaping assessment.
The provision is analogous to section 34 of the Indian Income Tax Act, 1922 and section 147 of the Income Tax Act, 1961.
It seems to us that the new section 59 endeavours to cover a substantially different area from that treated by the old section 62.
The only area which seems common to the two provisions relates to the "omission of any property", but it seems to us that the incidents of the power under section 62 relate to a situation materially different from the incidents of the power contemplated under section 59.
The High Court has closely analysed the provisions of the two sections and has come to the conclusion that the power of reassessment conferred by the new section 59 is quite different from the power conferred by the old section 62.
We are in agreement with the High Court.
The contention on behalf of the Revenue based on the identity alleged between the new section 59 and the old section 62, and that, therefore, the new sec tion should be regarded as retrospective cannot be accepted.
As .it stands, there are no specific words either which confer retrospective effect to section 59.
To spell out retro spectivity in section 59, then, there must be something in the intent to section 59 from which retrospective operation can be necessarily inferred.
We are unable to see such intent.
The new section 59 is altogether different from the old section 62 and 993 there is nothing in the new section 59 from which an intent to give retrospective effect to it can be concluded.
The new section 59 came into force from 1 July, 1960.
Much earlier, on 26 February, 1960 the assessment on the account able person had already been completed.
There is a well settled principle against interference with vested rights by subsequent legislation unless the legislation has been made retrospective expressly or by necessary implication.
If an assessment has already been made and completed, the assessee cannot be subjected to re assessment unless the statute permits that to be done.
Reference may be made to Controller of Estate Duty, West Bengal vs Smt.
IIa Das and others, where an attempt to reopen the Estate Duty assessment consequent upon the insertion of the new section 59 of the was held infructuous.
We hold that section 59 of the is not retro spective in operation and that the reopening of the assess ment under section 59.
of the Act is bad in law.
In the result the appeals fail and are dismissed with costs.
N.V.K. Appeals dismissed.

summary/full:
The respondents who were the accountable persons filed returns under the , and an assessment was made by the Deputy Controller of Estate Duty Appellant on 26th February.
The Estate Duty (Amendment) Act, 1958 repealed the original sections 56 to 65.
Section 59 which substituted for the original section 62 made provision for re assessment.
It came into force with effect from 1st July, 1960.
On 21st February, 1962, a notice under the new section 59 of the Act was issued to the respondents for re opening the assessment on the ground that some property had escaped the levy of estate duty.
The respondents raised objections but the same were rejected by the Assistant Controller who reopened the assessment.
Against the aforesaid order three different appeals were filed by the respondents before the Appellate Controller, who allowed the appeals.
set aside the reassessment order holding that section 59 under which action had been taken by the Assistant Controller was not retrospective in operation.
On appeal by the Revenue, the Tribunal upheld the view of the Appellate Controller relying on the decision of the Bombay High Court in A.N. Mafatlal vs Deputy Controller of Estate Duty, Thereafter.
at the instance of the Revenue 3 references were made 988 to the High Court raising the indentical question whether section 59 was retrospective in operation and reopening of the assessment under section 59 was bad.
The High Court analysed the provisions of the new section 59 and the old section 62.
came to the conclusion that the power of reas sessment conferred by the new section 59 Is quite different from the power conferred by the old section 62.
and answered the question in each case in favour of the assessee.
The Revenue appealed to this Court.
On the question: whether the newly enacted section 59 of the is retrospective in operation so as to affect the assessment already completed on the accountable persons.
Dismissing the appeals, the Court HELD: 1.
Section 59 of the is not retro spective in operation and reopening of the assessment under section 59 of the Act in the instant case is bad in law.
[993D] 2.
The Estate Duty (Amendment) Act.
1958 effected a substantial change in the parent Act.
Sections 56 to 65 were substituted in place of the existing sections 56 to 65.
and the originally enacted section 62 was repealed.
The original section 62 provided essentially for the rectification of mistakes apparent from the record or in the valuation of any property or by reason of the omission of any property.
[992D E] 3.
The newly enacted section 59 deals with properly escaping assessment.
The provision is analogous to section 34 of the Indian Income Tax Act.
1922 and section 147 of the Income Tax Act.
The new Section 59 endeavours to cover a substantially different area from that treated by the old section 62.
The only area which seems common to the two provisions relates to the "omission of any property", but the incidents of the power under section 62 relate to a situation materially different from the incidents of the power contemplated under section 59.
[992E F] 4.
There are no specific words which confer retrospec tive effect to section 59 as it stands.
To spell out retro spectivity in section 59 there must be something in the intent to section 59 from which retrospective operation can be necessarily inferred.
There is no such intent.
[992G H] 5.
The new section 59 is altogether different from the old section 989 62 and there is nothing new in the new section 59 from which an intent to give retrospective effect to it can be conclud ed.
[992H; 993A] 6.
There is a well settled principle against interfer ence with vested right by subsequent legislation unless the legislation has been made retrospective expressly or by necessary implication.
If an assessment has already been made and completed, the assessee cannot be subjected to re assessment unless the statute permits that to be done.
[993B C] 7.
The new section 59 came into force from 1st July, 1960.
Much earlier, on 26th February, 1960.
the assessment on the accountable persons in the instant case had already been completed.
there can be no question of reopening the assessment.
[993B] Controller of Estate Duty, West Bengal vs Smt.
IIa Das and Others, [198l] relied on.


judgement:
ivil Appeal No. 950 (N) of 1973.
From the Judgment and Order dated 2.8.1972 of the Bombay High Court in Special Civil Application No. 2826 of 1969.
Pinaki Misra, P.H. Parekh and Ms. Sunita Sharma for the Appellants.
V .N. Ganpule and V.D. Khanna for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
The subject matter of this appeal is 13.30 acres of land in Sholapur District, within the State of Maharashtra.
The appellants are the heirs of one Mugaji Laxman Padule, who was the tenant of the land for about 3 decades before the Bombay Tenancy and Agricultural Land Act, 1948 (hereinafter referred to as the Act) was 240 enacted.
Under the provisions of the Act, Mugaji was enti tled to purchase the land on satisfaction of certain condi tions.
Admittedly he did not satisfy these conditions and said so before the authorities concerned.
The landlords who are now represented by the respondents, were claiming pos session of the area under the Act.
Mugaji, subsequently, made a claim to the Land on another basis.
On his death in 1962, his heirs the appellants were substituted.
The matter was considered by several authorities under the Act, who ultimately rejected the appellants ' case.
The appellants, thereafter moved the Bombay High Court by an application under Article 227 of the Constitution of India, which was rejected by the impugned judgment.
The procedure for the tenant to purchase the land is laid down in Sec.
32G of the Act.
It enjoins the Agricultur al Land Tribunal constituted under Sec. 67 to publish a public notice calling upon the tenants, the landlords and any other interested person to appear before it on a speci fied date.
The Tribunal is also required to issue individual notices to the landlords and the tenants, and thereafter to decide the competing cases.
32A limits the right of a tenant holding other Lands to such area only which will raise his holding to the extent of the ceiling area.
Admit tedly Mugaji was already possessed of lands beyond the ceiling area and he, therefore, did not claim to have pur chased the land in accordance with the provisions of the Act.
In a situation where a tenant is not able to success fully claim the land, it has to be disposed of in the manner provided in Sec.
32P, which states that the former tenant would be summarily evicted and the land would be surrendered to the landlord.
In the present case the land in question, thus, went to the landlords.
According to the case of the appellants, on a partition in the family of the landlords the disputed land was allotted to the share of the respond ents 2 to 4 and Mugaji purchased the same for a sum of Rs. 3,000 from them on 3.6.1960.
The appellants alleged that by this date, i.e., 3.6.1960 the land held by Mugaji was within the ceiling area following a partition between him and his sons on 13.10.1959. 3.
The respondents moved the authorities under the Act in 1963 for recognising their claim.
They did not implead the appellants and suppressed the fact of the sale on 3.6.1960 in favour of Mugaji.
The Agricultural Lands Tribu nal and Additional Mamlatdar relying on the enquiry under Sec.
32G, wherein the right of Mugaji as a tenant was nega tived, upheld the claim of the present respondents by his order dated 28.4.1963.
When the appellants learnt about it, they filed an appeal before the Collector.
They also chal lenged the earlier order 241 passed against Mugaji under Sec.
32G. The Collector remanded the matter on 25.9.1963.
The Additional Mamlatdar by his order dated 8.2.
1964 observed that since the tenant had purchased the suit land from the landlords, the proceeding was fit to be dropped and it was appropriate to deal with the case under Sec.
84C of the Act.
84C states that in respect of a transfer of any land made after 1955 if the Mamlatdar has reason to believe that the transfer was in valid on account of any of the provisions of the Act, he would issue notice and hold an enquiry and decide whether the transfer is invalid or not.
In 1965 a further order was passed in the case wherein the Agricultural Lands Tribunal held the purchase by Mugaji on 3.6.1960 as lawful and upheld the claim of the appellants.
The order was upheld in appeal, and the respondent No. 3 filed a revision application before the Revenue Tribunal.
It was contended on behalf of the present appellants that after the partition between Mugaji and his sons in 1959 the area held by him came below the ceiling level and he was, thus.
entitled to purchase the land on 3.6.
The Maharashtra Revenue Tribunal held that the land owned by Mugaji did not belong to the joint family and his sons had no share therein, and the alleged partition, therefore, could not be accepted or recognised.
The result is that even in 1960, Mugaji was possessed of land beyond the ceiling area and he was not entitled to purchase further land from the respondents 2 to 4.
Thus, having lost the case, the appellants moved the Bombay High Court, and their application was rejected by a short judg ment passed on 2.8.
1972 which is under challenge in this appeal by Special Leave.
The learned counsel for appellants contended that the High Court was in error in assuming that the claim of the appellants was based on the right of Mugaji under Sec.
32G of the Act in the capacity of a tenant; and also in relying on Sec.
10 of the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961.
The learned counsel appears to be right but for this reason the appellants can not succeed.
The ban on transfers which may affect the ceiling law is more severe under the Bombay Tenancy and Agricultural Lands Act, 1948.
63 directs that no sale of land shall be valid in favour of a person who will after such sale hold land ex ceeding two thirds of the ceiling area determined under the Maharashtra Agricultural lands (Ceiling on Holdings) Act, 1961.
The fact that on the death of Mugaji in 1962 his earlier holdings were inherited by his heirs and the respec tive holdings, therefore, came below the ceiling area is immaterial, because the disputed land was purchased by Mugaji himself in 1960.
It has to be remembered that, as has been held by the Revenue Tribunal, the other 242 lands exclusively belonged to Mugaji and exceeded the ceil ing area.
The sale on 3.6.1960 must, therefore, be held to be illegal and inoperative.
Consequently, the appellants must lose although for slightly different reasons than those given by the High Court.
The appeal is accordingly dismissed but in the circumstances without costs.
G.N. Appeal dis missed.

summary/full:
The appellants are the heirs of one A who was the tenant of the land in question for about three decades before the Bombay Tenancy and Agricultural Land Act, 1948 was enacted.
Though he was entitled to purchase the land on satisfaction of certain conditions, it was admitted before the authori ties that he did not satisfy the conditions.
The landlords claimed possession of the land.
A was already possessed of land beyond the ceiling area prescribed by Sec.
32A of the Act and he, therefore, did not claim to have purchased the land in accordance with the provisions of the Act.
Since in such cases.
32P provides that the former tenant would be summarily evicted and the land would be surrendered to the landlord, the land in question went to the landlords.
The appellants claimed that on a partition in the family of the landlords the land in question was allotted to some of the respondents and A purchased the same for Rs. 3000 on 3.6.1960.
It was contended that the land holding of A was within the ceiling area following the partition in 1959 between him and his sons.
Suppressing the sale of the land and without impleading the appellants, the respondents moved the authorities in 1963 for recognising their claim.
The Agricultural Land Tribunal and the Additional Mamlatdar upheld the claim of the respondents, relying on an enquiry under Section 32G, wherein the right of A as a tenant was negatived.
the appel lants filed an appeal before the collector, who remanded the matter to the Mamlatdar.
The Additional Mamlatdar observed that since the tenant had purchased the land from the land lords, the proceeding was fit to be dropped and it would be appropriate to deal with the case under Section 84C which provided holding of an enquiry to decide the validity of the transfer.
After such enquiry the Agricultural Lands Tribunal held that the purchase made on 3.6.1960 by A was lawful and upheld the claim of the appellants.
This was confirmed on appeal and one of the respondents filed a revision applica tion before the 239 Revenue Tribunal.
The Tribunal held that the land owned by A did not belong to the joint family and his sons had no share therein and so the alleged partition could not be accepted or recognised.
And in 1960, A was possessed of land beyond the ceiling area and was not entitled to purchase further land from respondents.
The appellant moved the High Court under Article 227 of the Constitution.
The High Court re jected the petition.
This appeal, by Special Leave, is against the High Court 's Judgment.
Dismissing the appeal, HELD: The ban on transfers which may affect the ceiling law is more severe under the Bombay Tenancy and Agricultural Lands Act, directs that no sale of land shall be valid in favour of a person who will, after such sale, hold land exceeding two thirds of the ceiling area deter mined under the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961.
The fact that on the death of A in 1962 his earlier holdings were inherited by his heirs and the respective holdings, therefore, came below the ceiling area, is immaterial because the disputed land was purchased by A himself in 1960.
It has to be remembered that, as has been held by the Revenue Tribunal, the other lands exclusively belonged to A and exceeded the ceiling area.
The sale on 3.6.1960 must, therefore, be held to be illegal and inopera tive.
[241G H; 242A]


judgement:
vil Appeal No. 1491 (NN) of 1988.
From the Judgment and Order dated 30.5.
1986 of the Delhi High Court in W. No. 578 of 1981.
A. Subba Rao, P. Parmeshwaran and Mrs. Sushma Suri for the Appellants.
H.N. Salve, P.K. Ram and D.N. Misra for the Respondent.
872 The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an appeal by special leave and is connected with Civil Appeal No. 859.
This is an appeal from the judgment and order of the High Court of Delhi dated 30th May, 1986.
It appears that in October, 1975, Trade Notices were issued on the basis of the directive of the Ministry of Finance to the effect that the owners of the brand name are to be treated as the manufacturers of the goods.
In April, 1977, price list submitted by the respondent declaring the assessable value on the basis of the price at which the assessee respondent sold the goods.
Thereafter on 16th April, 1977, there was a letter written by respondent giving the list of the customers of the respondent and clarifying the terms and conditions on which the assessee sold the goods.
On August 22, 1977, the appellants wrote a letter to the assessee respondent seeking certain information, intera lia, to the effect whether the assessee and its buyers were related persons.
A reply was given on 10th September, 1977 by the assessee to the aforesaid letter.
First notice was issued asking the assessee to show cause as to why the assessable value be not determined at the price the buyers of the assessee sold the goods (instead of the price at which the assessee sold the goods to its buyers).
There was a reply and the second show cause notice was issued on 28th January, 1981.
These show cause notices were challenged and the High Court quashed the said notices.
Aggrieved thereby, this appeal has been filed.
The respondent is a registered company carrying on the business of manufacturing and selling filters.
Some of the goods are sold by the respondent to its customers under the respective brand names.
The respondent filed a price list at which price the goods were sold to the customers.
In view of the principles indicated in the judgment in Civil Appeal No. 859 and the facts adduced before the High Court, the High Court 's judgment cannot be interfered.
The appeal, therefore, fails and is accordingly dismissed.
T.N.A. Appeal dismissed.

summary/full:
The respondent company, manufacturer of filters, was selling the goods to its customers under brand names.
It declared its assessable value on the basis of the price at which it sold the goods.
Show Cause Notices, requiring assessable value to he determined at the price the buyers of the respondent company sold the goods, issued to the re spondent were challenged by it and quashed by the High Court.
Hence this appeal by the Revenue.
Dismissing the appeal, this Court HELD: 1.
For the purposes of the excise duty, the market value of the goods of the respondent company was the price charged by it, and not the market value at which the buyers of the respondent company sold the goods.
The High Court, therefore, rightly quashed the Show Cause Notices.
[872C] The Union of India & Ors.
vs M/s Playworld Electronics Pvt. Ltd. & Anr., Civil Appeal No. 859 of 1988 (S.C.) decid ed on 2nd May, 1989, applied.


judgement:
ivil Appeal No. 9979 of 1983.
From the Judgment and Order dated 8.12.1982 of the Patna High Court in C.R. No. 377 of 1980 (R).
M.P. Jha for the Appellants.
D.P. Mukharjee for the Respondents.
The Judgment of the Court was delivered by 973 SHARMA, J.
The dispute in the present appeal by special leave is in regard to certain premises in the town of Ranchi in Bihar which belongs to the appellants and in which a cinema is running.
The contesting respondents have been occupying the property under a registered lease for a period of 20 years which expired on 31.7.1971.
They served a notice on the appellants on 16.7.1971 claiming the right to contin ue in possession after 31.7.1971 as tenants from month to month.
The appellants did not accept the claim and filed before Munsif, Ranchi a case purporting to be an application under section 12 of the Bihar Buildings (Lease, Rent and Evic tion) Control Act, 1947 (hereinafter referred to as the Act).
The respondents contested the application and raised several points in defence which were rejected by the learned Munsif.
The appellants ' application was allowed and an appeal therefrom filed by the respondents was dismissed by the Judicial Commissioner, Ranchi.
The respondents, then, moved the Patna High Court in its revisional jurisdiction, inter alia, contending that the appellants ' application under section 12 of the Act before the Munsif was not maintain able.
The plea was accepted by the High Court and the deci sion of the court below was set aside.
According to the appellants ' case the property earli er belonged to M/s Ganapathi Properties (Pvt.) Limited, the predecessor in title of the appellants.
The company had granted the lease in favour of one S.M. Ganguli who on his death was succeeded by his legal representatives.
There was due attornment of the tenancy and the lessees were liable to vacate the premises on 31.7.
197 1.
Their further case of induction of some of the respondents as sub tenants has been disbelieved and in view of the findings of fact in the case, it is not necessary to deal with this aspect now.
Apart from pleading that the application under section 12 was not maintainable and the allegations contained therein were incorrect, the respondents also stated that the heirs of late S.N. Ganguli had formed a partnership, as a result of which a new month to month tenancy was created, and the respondents, therefore, were not liable to eviction.
The parties differed on several questions of fact which, in view of the findings of the trial court and the appellate court, are not necessary to be detailed.
The parties led full evidence, both oral and documentary.
on the disputed issues and after an elaborate trial the learned Munsif accepted the appellants ' case that they are the successors in interest of the lessor company, and the legal representatives of late S.N. Ganguli the original lessee continued as tenants under the lease after due attornment and were liable to eviction after the expiry of the lease 974 period on 31.7.
The court accordingly directed the respondents to vacate the premises.
On appeal by the respondents, the learned Judicial Commissioner, Ranchi agreed with the findings of the learned Munsif on merits and concluded in paragraph 48 of the.judg ment thus: "Therefore, from the facts stated above it appears that the present landlords and tenants are the heirs and successors of the original lessor and the lessee respectively.
That being so, according to the terms of the deed of lease (Ext. 4) 1 have no hesitation in saying that the deed of lease (Ext. 4) is subsisting and the parties are having the relationship of lessors and lessees and also landlords and tenants respectively.
No month to month tenan cy had been created.
" He, however, modified the decision of the trial court in so far the learned Munsif had directed that his order would be executed and the respondents would be evicted from the premises on their failure to vacate within the time allowed.
The learned Judicial Commissioner confined his decision to deciding the issues between the parties and granting one month 's time to the respondents (appellants before him) for vacating the premises and further held that the appellants would have to make another application under section 12(3) of the Act for evicting the respondents if they did not vacate within the time allowed by court.
The respondents challenged the decision in C.R. No. 377 of 1980 (R) before the Patna High Court.
The learned Judge who heard the case held that in absence of a month 's notice under section 12(1) from the tenant, the application of the appellants was not maintainable before the Munsif, and the entire proceeding was mis conceived.
It was pointed out that in the circumstances the appropriate remedy of the appellants was to file a suit under section 11 of the Act.
Before proceeding further it will be helpful to examine the provisions of the section 12 which is quoted below: "12.
Extension of period limited by lease.
(1) If a tenant in possession of any building, held on a lease for a specified period, in tends to extend the period limited by such lease, he may give the landlord at least one month before the expiry of the period limited by the lease, a written notice of 975 his intention to do so; and upon the delivery of such notice the said time shall, subject to the provision of section 11, be deemed to have been extended by double the period covered by the original lease subject to a maximum of one year.
(2) Where the landlord to whom notice has been given under sub section (1) wishes to object to the extension demanded by the tenant on one or more of the grounds mentioned in sub section (1) of section 11 or on the ground that the landlord has any other good and sufficient cause for terminating the lease on the expiry of period limited thereby, he may, within fifty days of the delivery of such notice, appeal to the court in that behalf and the Court after hearing the parties may termi nate the lease or extend the same for such period as it deems proper in the circum stances.
Provided that the tenant shall not in any case be allowed to remain in possession of the building beyond the period permissible under sub section (1).
(3) If the tenant fails to vacate the building on the termination of the lease or as the case may be, on the expiry of the period fixed by the Court under sub section (2), the Court shall, on an application by the land lord, pass an order for ejectment, which shall be executed as a decree and may further order that the tenant shall pay to the landlord such amount as may be determined by it as daily compensation.
It has been contended on behalf of the appellants that an application under section 12 of the Act before the civil court was maintainable and the High Court was in error in holding otherwise.
The argument is that both the remedies, i.e., by an application under section 12 of the Act as also by way of a suit are open to a landlord after the expiry of the period of a fixed term tenancy, and it is for him to choose which course to follow.
Mr. Kameshwar Prasad, the learned counsel appearing on behalf of the respondents urged that on the expiry of such a tenancy the only remedy is to file a suit and in any event section 12 is wholly inapplicable in the facts of the case as the respondents, by their notice, did not seek an extension of the term of tenancy.
He asserted that according to their case in the notice a fresh tenancy had come into 976 existence.
The notice, therefore, was not one under section 12 of the Act at all.
We do not consider it necessary to decide the question as to whether a landlord after the expiry of the period of a fixed term lease is entitled to move the Court by an application under section 12 of the Act because even on assuming the argument of the respondents to be correct the appellants should succeed.
In view of the circumstances of the present case as discussed below, the proceeding arising out of the appellant 's application before the learned Munsiff should be treated as a suit and his decision as a decree.
It has to be kept in mind that it is the same court before which both a suit under section 11 and an application under section 12 are to be filed.
The Bihar Buildings (Lease, Rent and Eviction) Control Act refers to several authorities for decision of different issues, one of them being Control ler as defined in section 2(b) of the Act, and another 'Court as the court of general jurisdiction under the Code of Civil Procedure, 1908 as defined in section 2(bb).
So far the determi nation and redetermination of fair rent, or issuing appro priate directions relating to amenities in the premises and several other matters are concerned, the power is vested in the Controller.
But as regards the question of dealing with the eviction of tenants under section 11 and extension of period of lease under section 12, the civil court is the proper forum.
In the present case it is the Civil Court, Ranchi which is the appropriate court either for filing a suit for eviction under section 11 or making an application under section 12.
There is, thus, no difficulty so far the jurisdiction of the court is concerned.
The question is whether the petition which was filed by the appellants as an application under section 12 should be treated as a plaint and the impugned proceeding as the one in a suit followed by an appeal and a second appeal.
With the assistance of learned counsel for the par ties we have gone through the relevant papers in the case and are satisfied that both the parties dealt with every aspect of the case from their respective angles elaborately, and led their full evidence both oral and documentary and the case was tried by the learned Munsif in the same manner as the trial of an eviction suit.
The decision of the learned Munsif is also a detailed one considering every relevant question in the case.
The respondents filed a regular appeal from the decision before the District Judge, Ranchi, designated as Judicial Commissioner, and he also went into the entire controversy thoroughly.
The respondents lost the case once more and moved the High Court but in civil revision application instead of second appeal, presum ably because the Judicial Commissioner after deciding the disputed issues in favour of the present appellants instead of confirming the decree of 977 the Munsif directed them to file a fresh application under section 12(3) for a formal decree of eviction.
The judgment of the High Court indicates that the scope in which the argu ments by the parties were addressed was the same as in a second appeal, and the decision also was accordingly given.
The findings on the disputed issues of fact between the parties were concurrently recorded against the tenants by the first two courts and it was not open to the High Court to reverse them under section 100, C.P.C. We have also gone through the judgments of the first two courts on this aspect and considered the criticism of Mr. Kameshwar Prasad, learned counsel for the respondents appearing before us, and we do not find any error therein.
In these circumstances, it is wholly immaterial as to whether the application original ly filed by the appellants before the Munsif was not in the form of a plaint specially when the necessary verification was also there at the foot of the petition.
The only differ ence may be as to the amounts of court fees payable by the appellants in the first court and by the respondents before the Judicial Commissioner and the High Court, but that should not come in the way in construing the correct nature of the proceeding.
A similar approach was adopted in several cases decided by some High Courts and we would like to refer to three decisions in this regard.
In Madho Bibi vs Hazari Mal Marwari, AIR 1929 Patna 141, a suit was dismissed as against one of the defendants who in the proceeding of execution of the decree filed an objection to an attachment order under Order XXI, Rule 58, C.P.C. which was recorded under that Rule only.
The court proceeded under that Rule and after making inquiries reject ed the claim.
When a revision application was filed before the High Court, it was held that the objection petition, though wrongly preferred under Order XXI, Rule 58, must be treated as one under section 47, and the order passed by the court would have the effect of a final order under section 47 which would be appealable as a decree and against which no revision would lie.
In another decision by the same Court in Hazari Lal vs Ramjiwan Ramchandra and others, AIR 1929 Patna 472, the Division Bench held that a defendant against whom a suit is dismissed is nevertheless party to the suit, and an objection petition though described by him as one Under Order XXI, Rule 58, C.P.C, is such as would fall under section 47 and so the decision on it is appealable and a regular suit is barred.
In Lachhoo vs Munnilal Babu Lal, AIR 1935 Allaha bad 183, it was observed that in considering whether an application is under section 47 or not, the court must examine the substance of the application to find out its true nature and should not be guided solely by the heading given to it by a party.
The principle is well established that the exercise of a power will be referable to a 978 jurisdiction which confers validity upon it and not to a jurisdiction under which it will be nugatory, and there is no reason to exclude the application of this rule to judi cial proceedings.
In a case dealing with compulsory retire ment this Court in M.R. Singh vs The Chief ' Commissioner (Admn.) Manipur and others; , , observed that "if power can be traced to a valid power, the fact that the power is purported to have been exercised under a non exist ing power does not invalidate the exercise of the power".
If it is assumed that an application under section 12 of the Act is not maintainable in the facts and circumstances of the present case, in our opinion, the proceeding has to be treated as a suit and the judgment of the learned Munsif as a decree therein.
A further question may arise as to the effect of the Judicial Commissioner, Ranchi declining to pass a formal decree of eviction and directing the appel lants to make an application under section 12(3) of the Act for that purpose.
Can this Court restore the decree of the trial court in absence of an appeal by the appellants before the High Court? We think that we can and we should.
The question does not affect the substantive right of the parties as the controversy was concluded by the first appellate court in favour of the appellants.
What was left was only procedural in nature and inconsistent with our decision to treat the proceedings as a suit.
The occasion for filing an applica tion under section 12(3) can arise only where the matter is covered by section 12, and as we have made an assumption in favour of the respondents that section 12 has no application to the present case, there is no point in asking the appellants to file such an application.
As mentioned in article 142 of the Constitution of India, this Court may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, and the present case is a most appropriate one for exercise of such power.
Accordingly, we set aside the judgment of the High Court and restore the decree passed by the Munsif, Ranchi.
The re spondents are directed to restore peaceful possession of the premises in question to the appellants within one month from today, failing which the appellants shall be entitled to execute the decree in accordance with law.
The appeal is allowed, but the parties are directed to bear their own costs throughout.
R.S.S. Appeal allowed.

summary/full:
The contesting respondents have been in occupation of the demised property under a registered lease for 20 years, which was to expire on 31.7.1971.
They served a notice on the appellants on 16.7.1971 claiming the right to continue in possession after 31.7.1971 as tenants from month to month.
The appellants did not accept the respondents ' claim and filed before the Munsif a case purporting to be an application under section 12 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947.
The respondents con tested the application on the ground that as heirs of the original lessee, they had formed a partnership as a result of which a new month to month tenancy had been created.
They further contended that the appellants ' application before the Munsif under section 12 was not maintainable.
The Munsif accepted the appellants ' case that the legal representatives of the original lessee continued as tenants under the lease after the attornment and were liable to eviction after the expiry of the lease period.
The Judicial Commissioner dis missed the respondents ' appeal holding that the deed of lease was subsisting, the parties were having the relation ship of lessors and lessees, and no month to month tenancy had been created.
The Judicial Commissioner further held that the appellants would have to make another application under section 12(3) of the Act for evicting the respondents if they did not vacate within the time allowed by court.
The High Court, in its revisional jurisdiction, set aside the decisions of the courts below and held that in the absence of a month 's notice under section 12(1) from the tenants, the application of the appellants under section 12 was not maintain able before the Munsif and the entire proceedings was mis conceived.
The High Court pointed out that in the circum stances the appropriate remedy of the appellants was to file a suit under section 11 of the Act.
971 Before this Court it was contended on behalf of the appellants that an application under section 12 of the Act before the Civil Court was maintainable, and that both the reme dies.
i.e., by an application under section 12 of the Act as also by way of a suit were open to a landlord after the expiry of the period of a fixed term tenancy, and it was for him to choose which course to follow.
On behalf of the respondents it was contended that on the expiry of such a tenancy the only remedy was to file a suit, and in any event section 12 was wholly inapplicable as, according to their case in the notice, a fresh tenancy had come into existence, and as such their notice was not one under section 12 of the Act at all.
Allowing the appeal, this Court HELD: (1) The Act refers to several authorities for decision of different issues.
As regards the question of dealing.
with the eviction of tenants under section 11 and exten sion of period of lease under section 12, the civil court is the proper forum.
It is the same court before which both a suit under section 11 and an application under section 12 are to be filed.
[976C, D] (2) The instant case was tried by the learned Munsif in the same manner as the trial of an eviction suit.
The re spondents filed a regular appeal before the District Judge, designated as Judicial Commissioner, and he also went through the entire controversy thoroughly.
The judgment of the High Court indicates that the scope in which the argu ments by the parties were addressed was the same as in a second appeal, and the decision also was accordingly given.
In these circumstances, it is wholly immaterial as to wheth er the application originally filed by the appellants before the Munsif was not in the form of a plaint, specially when the necessary verification was also there at the foot of the petition.
The only difference may be as to the amount of court fee payable by the parties, but that should not come in the way of construing the correct nature of the proceed ings.
[976G H; 977C D] Madho Bibi vs Hazari Mal Marwari, AIR 1929 Patna 141 and Hazari Lal vs Ramjiwan Ramchandra, AIR 1929 Patna 472, referred tO. (3) The court must examine the substance of the applica tion to find out its true nature and should not be guided solely by the heading given to it by a party.
[977G H] 972 Lachhoo vs Munnilal Babu Lal, AIR 1935 All.
183, referred to.
(4) The principle is well established that the exercise of a power will be referable to a jurisdiction which confers validity upon it and not to a jurisdiction under which it will be nugatory, and there is no reason to exclude the application of this rule to judical proceedings.
[977H; 978A] R.P. Singh vs The Chief Commissioner (Admn.) Manipur, ; referred to.
(5) If it is assumed that an application under section 12 of the Act is not maintainable in the facts and circumstances of the present case, the proceeding has to be treated as a suit and the judgment of the learned Munsifas a decree therein.
[978C] (6) The occasion for filing an application under section 12(3) can arise only where the matter is covered by section 12, and as an assumption has to be made in favour of the re spondents that section 12 has no application, there is no point in asking the appellants to file such an application.
[978E] (7) This Court can and should restore the decree of the trial court even in the absence of an appeal by the appel lants before the High Court against the order of the Judi cial Commissoner declining to pass a formal decree of evic tion and directing the appellants to make an application under section 12(3) of the Act for that purpose.
As mentioned in Article 142 of the Constitution, this Court may pass such decree or make such order as is necessary for doing complete justice in any case or matter pending before it, and the instant case is a most appropriate one for exercise of such power.
[978D F]


judgement:
ivil Appeal No. 2858 of 1977.
From the Judgment and Order dated 16.12.
1976 of the Allahabad High Court in Civil Miscellaneous Writ No. 179 of 1976.
A. Subba Rao, P. Parmeshwaran and Mrs. Sushma Suri for the Appellants.
H.N. Salve, Ravinder Narain, K.C. Dua, P.K. Ram and D.N. Misra for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This is an appeal by special leave from the judgment and order of the High Court of Allahabad dated 16th December, 1976.
875 The question in this case was the valuation of goods for the purpose of levy of excise duty under the Central Excises & Salt Act, 1944 (hereinafter referred to as 'the Act ').
The respondent company had submitted its price list in Form IV to the Superintendent, Central Excise containing,the price at which five companies to which it sold its entire output (hereinafter referred to as the Customer Companies) sold those products.
The customer companies thereafter sold their products.
The respondent challenged the direction of the Superintendent and had contended that for the purpose of levy of excise duty the value of its products should be the prices at which it sold those products to the customer companies and not the prices at which these in turn sold those products to wholesale dealers or others.
The respond ent company was registered under the Indian Companies Act, 19 13.
At the relevant time, there were five shareholders of the company, namely, Bajaj Electricals Ltd., Bombay, Cromp ton Parkinson Ltd., London, N.V. Philips, Eindhoven (Hol land), General Electricals Co. Ltd., London and Mazda Lamp Co. Ltd., Licencester, England.
Except M/s Bajaj Electricals Ltd., the aforesaid four companies are referred to as the foreign companies.
The said Bajaj Electricals held 1,80,000 shares in the respondent company.
It is called 'A ' share holder.
The four foreign companies together held 1,80,000 shares.
These are called 'B ' share holders.
The respondent company was engaged in manufacture of electric lamps, fluo rescent lamps and miniature lamps.
It sold its entire output of the products exclusively to the following customer compa nies: (a) Bajaj Electricals Ltd. (b) Philips India Ltd. (c) Crompton Greaves Ltd. (d) General Electric Co. of India Ltd. (e) Mazda Lamps Co. Ltd. On the lamps manufactured by the respondent company, it put the brand names of trade marks like Philips, Osram, Mazda, Crompton and Bajaj of the respective Customer Compa nies according to their directions.
The Customer companies in turn sold these lamps under their names at prices higher than the prices charged by the respondent company.
Excise duty on electric lamps and fluorescent lamps was levied for the first time in the year 1965.
At first, excise duty on lamps was a specific duty.
Later, excise duty on them was changed from specific to ad valorem duty.
After such change, there was a controversy between the respondent company and the central excise authorities as to whether the prices charged by the respondent com 876 pany to its customer companies for its products or the prices charged by the customer companies when they sold them to wholesale dealers and others, should be the basis for determination of the value for levy of excise duty.
Being aggrieved by the insistance of the Central Excise authori ties that the latter prices should be the value for levy of excise duty, the respondent company approached the High Court of Allahabad by Civil Misc.
Writ No. 2 189 of 1973.
The High Court by its order dated 14th May, 1974, allowed the writ petition and held that the prices at which the respondent company sold its products to the customer compa nies, should be the value for levy of excise duty and not the price at which the customer companies sold these to wholesale dealers and others.
The Central Excise authori ties, however, had taken the view that the aforesaid deci sion of the High Court which was rendered on the basis of the old section 4 as it stood before it was amended by the Amendment Act of 1973 did not apply to the levy of excise duty subsequent to the Amendment Act coming into force on 1st October, 1973.
On the other hand, the contention on behalf of the respondent company was that the aforesaid amendment of the Act had not altered the legal position so far as the respondent company was concerned and that the decision of the High Court would be binding.
It appears that the Central Excise Authorities were wrong in view of the observations of this Court in Union of India vs Bombay Tyre International Ltd., ; , where this Court observed that it was not the intention of the Parliament while enacting the new section to create a scheme materially different from that embodied in the superseded section 4.
The object and purpose remained the same, and so did the central principle of the scheme.
The new scheme was merely more comprehensive and the language employed more precise and definite.
As in the old section 4, the terms in which the value was defined remained the price charged by the assessee in the course of wholesale trade for delivery at the time and place of removal.
See the observations at pages 377 and 378 of the said Report.
The High Court referred to the decision of this Court in A.K. Roy vs Voltas Ltd., ; and also in Union of India vs Atic Industries Ltd., ; The real question that arose in this case is whether the five customer companies can be regarded as 'related persons ' as defined in section 4(4)(c).
The definition of that con sists of two parts.
The first part refers to a person who is so associated with the assessee that each has interest, directly or indirectly in the business of the other and the second part of that definition refers to a holding company, a subsidiary company, a relative and a distributor of the assessee and any sub 877 distributor of such distributor.
The High Court held that in order for the respondent company to come within the first part of the definition, the respondent company and the customer companies must have interest, directly or indirect ly, in the business of each other.
Such of the customer companies which held shares in the respondent company, could be said, according to the High Court, to have interest in the business of the respondent company.
But only one of the customers companies, namely, Bajaj Electricals Ltd., Bombay, held shares in the respondent company.
The remaining four customer companies did not hold any shares in the respondent company.
It was further contended before the High Court that those four customer companies were respectively associated companies of the four foreign companies and that hence those four customer companies must also be held to have interest indirectly, if not directly, in the business of the respond ent company.
The High Court found that in the absence of material, it was not possible to accede to the contention of the company.
What is 'interest, directly or indirectly ', has been explained in Union of India & Ors.
vs Atic Industries Ltd., (supra).
In that case, the respondent assessee, a limited company, was engaged in the business of manufactur ing dyes.
Its 50 per cent share capital was held by Atul Products Ltd. and the remaining 50 per cent by Imperial Chemical Industries Ltd., London which also had a subsidiary company fully owned by it, called Imperial Chemical Indus tries (India) Pvt.
Ltd. The Imperial Chemical Industries (India) Pvt. Ltd. ceased to be a subsidiary company wholly owned by the Imperial Chemical Industries Ltd., London on 13th March, 1978, since 60 per cent of the share capital of Imperial Chemical Industries (India) Pvt. Ltd., was offered to the public in pursuance of the policy of the Government of India requiring that not more than 40 per cent of the share capital of an Indian company should be held by a foreign shareholder.
Consequent upon this dilution of for eign shareholding, the name of Imperial Chemical Industries (India) Pvt. Ltd. was changed to Crescent Dyes and Chemicals Ltd. The assessee in that case at all material times sold the large bulk of dyes manufactured by it in wholesale to Atul Products Ltd. and Imperial Chemical Industries (India) Pvt. Ltd. which subsequently came to be known as Crescent Dyes and Chemicals at a uniform price applicable alike to both these wholesale buyers and those wholesale buyers sold these dyes to dealers and consumers at a higher price which inter alia included the expenses incurred by them as also their profit.
The transactions between the assessee on the one hand and Atul Products Ltd. and Crescent Dyes and Chemi cals Ltd. on the other were as principal to principal and the wholesale price 878 charged by the assessee to Atul Products Ltd. and Crescent Dyes and Chemicals Ltd. was the sole consideration for the sale and no extracommercial considerations entered in the determination of such price.
In that case, this Court held that on a proper interpretation of the definition of "relat ed person" in sub section (4)(c) of sec.
4, the words "relative and a distributor of the assessee" do not refer to any distributor but these were limited only to a distributor who is a relative of the assessee within the meaning of the .
It was held that the definition of "related person" is not unduly wide and does not suffer from any constitutional infirmity.
Reliance was also placed on the observations of this Court in Union of India & Ors.
vs Bombay Tyre International Ltd., (supra).
The first part of the definition defined "related person" to mean a person who is so associated with the assessee that each has interest, directly or indirectly, in the business of each other.
It is not enough that the assessee has an interest, direct or indirect in the business of the person alleged to be a related person nor is it enough that the person alleged to be a related person has an interest, direct or indirect in the business of the asses see.
To attract the applicability of the first part of the definition, the assessee and the person alleged to be a related person must have interest direct or indirect in the business of each other.
Each of them must have a direct or indirect interest in the business of the other.
The quality and degree of interest which each must have in the business of the other may be different; the interest of one in the business of the other may be direct while the interest of the latter in the business of the former may be indirect.
After analysing the facts, this Court came to the conclusion that there was no relationship.
Shri Sibal placed before us a Chart indicating the similarity of the facts of Atic Industries ' case (supra) and the facts of the present case.
In Atic Industries ' case, 50 per cent of share capital belonged to Atul Products Ltd. and 50 per cent to the Imperial Chemicals (London) Ltd., a foreign company.
In the case of the respondent herein, 50 per cent share capital belonged to the Bajaj Electricals Ltd. (Indian Company) and 50 per cent belonged to Philips (17.67%), Mazda (14.86%), G.E.C. (10.59%) and Crompton (6.88%), all foreign companies.
In case of Atic Industries, the sale of goods was on principal to principal basis and to a share holding company and to another company, which was initially a subsidiary of the foreign shareholding company and to which subsequently became "associate" company of the foreign shareholding company.
In the instant case also, it was on principal to principal basis and to a shareholding company (Bajaj Electricals Ltd.) 879 and so called to associate companies of the foreign share holding companies.
Goods were supplied to customers in their brand name in the case of Atic Industries as in the instant case.
In Atic Industries ' case, there was no allegation of extra commercial consideration and in the instant case also there was no allegation of extra commercial consideration.
In Atic Industries ' case, same prices were charged from all the customers, similar is the position in the instant case.
In the aforesaid view of the matter and in view of the ratio of the said decision, Shri Sibal sought to urge that the High Court was right in the view it took.
In our opin ion, Shri Sibal is right.
There is a lurking doubt that the five customer companies were the favoured customers, but no investigation seems to have been carried out.
The High Court while allowing the writ petition held that it was open to the Central Excise Authorities to examine whether or not the five customer companies were the favoured customers and whether the price at which the respondent company sold its products to these were the normal prices at which such goods were ordinarily sold by a manufacturer in the course of wholesale trade for delivery at the time and place of remov al.
Apparently, no such scrutiny was done.
In that view of the matter, the judgment and order of the High Court of Allahabad must be upheld and in view of the ratio of the decision in Civil Appeal No. 859, this appeal must fail without order as to costs.
R.N.J. Appeal dismissed.

summary/full:
The respondent company, a manufacturer of electric lamps, fluorescent lamps and miniature lamps sold its entire products to five customer companies namely (a) Bajaj Elec tricals Ltd. (b) Philips India Ltd. (c) Crompton Greaves Ltd. (d) General Electric Co. of India Ltd. and (e) Mazda Lamps Co. Ltd. after putting the brand names of the said Customer companies as per their directions.
The customer companies in turn sold these lamps under their respective names to wholesale dealers and others at prices higher than the prices charged to them by the Respondent Company.
Excise duty on electric lamps at first was a specific duty but later it was changed to ad valorem duty.
After such change there was a controversy between the Respondent Compa ny and the Central Excise authorities as to whether the prices charged by the Respondent Company to its customer companies or the prices charged by the customer companies when they in turn sold to wholesale dealers and others, should be the basis for determination of the value for levy of excise duty.
As the Department insisted that latter shall be the value for levy of excise duty, the Respondent Company moved a Writ Petition in the High Court of Allahabad.
The High Court by its order dated 14.5.74 allowed the Writ Petition holding that the prices at which the Respondent Company sold its products to the Customer companies should be the value for levy of excise duty and not the prices at which the customer companies sold these to wholesale dealers and others.
Hence this appeal by the Excise authorities.
874 Dismissing the appeal, this Court, HELD: The first part of Section 4(4)(c) refers to a person who is so associated with the assessee that each had interest, directly or indirectly in the business of the other and the second part of that definition refers to a holding company, a subsidiary company, a relative and a distributor of the assessee and any sub distributor of such distributor.
The sale by the assessee company was on princi pal to principal basis and the share holding company (Bajaj Electrical Ltd.) and so called to associate companies .of the foreign share holding companies.
Goods were supplied to the Customer companies in their brand names as in the case of Atic Industries case.
In Atic Industries case there was no allegation of extra commercial consideration and in the instant case also there was no such allegation.
In Atic Industries case, same prices were charged from all the customers, similar is the position in the instant case.
[876G H; 877H; 878A B] In view of the ratio of the decision of this Court in Atic Industries case the Judgment and order of the High Court is upheld and the appeal preferred by the Revenue dismissed.
[879E] Union of India vs Bombay Tyre International Ltd., ; ; A.K. Roy vs Voltas Ltd., ; and Union of India vs Atic Industries Ltd., ; , referred to.