Assistant Commissioner of Income Tax Vs. Vijaya Finance and ors. - Court Judgment

Excerpt:
- maximssections 2(xv) & 3(1) & (3): [v.v.s. rao, n.v. ramana & p.s. narayana, jj] ghee as a live stock product held, [per v.v.s. rao & n.v. ramana, jj - majority] since ages, milk is preserved by souring with aid of lactic cultures. the first of such resultant products developed is curd or yogurt (dahi) obtained by fermenting milk. dahi when subjected to churning yields butter (makkhan) and buttermilk as by product. the shelf life of dahi is two days whereas that of butter is a week. by simmering unsalted butter in a pot until all water is boiled, ghee is obtained which has shelf life of more than a year in controlled conditions. ghee at least as of now is most synthesized, ghee is a natural product derived ultimately from milk. so to say, milk is converted to dahi, then butter. scientifically or common sense point of view, even though ghee is not directly obtained from milk (which is certainly a product of cow/buffalo), it is certainly a product of a product of livestock i.e., cow or buffalo. it would be rather illogical or irrational to say that ghee is not a milk/dairy product or to say that it is not a product of livestock. section 2(x) and 2(iv) of the act used the plural products of livestock. the legislative intention is very clear that not only a product of livestock like milk (when notified by government), butter etc., are products of livestock but even derivative items (derived from a product of livestock) are intended to be product of livestock for the purpose of the act. thus the term ghee is to be interpreted on the basis of expression products of livestock as defined in section 2(xv) of the act. whatever products are declared as such by the government by notification, they become products of livestock for purpose of the act. consequently it was held that ghee is the product of livestock and by reason of power conferred under section 3(1) read with section 3(3) of the act on them it is competent for the government to declare ghee as product of livestock for the purpose of regulating its purchase and sale, in any notified market area. [per p.s. narayana, j,(dissenting)]if livestock or agricultural produce and the categories thereof had been specified in the statute itself by appending in the schedule or otherwise, that would stand on a different footing from the present provisions of the act which contemplate the issuance of notifications in accordance with the procedure ordained by the provisions specified supra. in view of the clear definition of the livestock and products of livestock, the ghee being derivative of butter or cream, if the language employed in definition to be taken as they stand, the only conclusion would be is that the ghee would not fall within ambit of the definitions aforesaid. sections 4 & 3: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] declaration of notified area held, it is only under section 3 that government are required to publish draft notification inviting objections and section 3(3) mandates to consider objections and suggestions before issuing declaration order. it is very conspicuous that section 4 does not contemplate any draft notification inviting objections and suggestions before either constituting market committee, establishing notified market area or declaring notified market area for the purpose of levy of market fees. thus, except ordaining government to issue preliminary/draft notification inviting objections at the time of issuing declaration order under section 3(3) of the act nowhere much less under section 4 contemplates issuing a notification inviting objections. when the legislature has chosen to exclude principles of natural justice, the court cannot introduce rule of audi alteram partem and render statutory provisions unworkable. in such a case, maxim, expressum facit cessare tacitum (when there is express mention of certain things, then anything not mentioned is excluded) would apply. section 7: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] levy of market fee element of quid pro quo - held, levying fees and tax are two forms of exercise of sttaes taxing power. there is no quid pro quo between tax payer and public authority as tax is a part of common burden. it is also well settled that fee is charge for special service or a benefit given to a class of individual fee payers and fee collected need not have correlation with actual service in exactitude but if it is shown that substantial portion of the fee is expended or the purpose for which it is levied, it would be justified. expressum facit cessare tacitum sections 4 & 3: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] meaning when there is express mention of certain things, then anything not mentioned is excluded. - they not only filed the complaint and failed in their attempt to get the accused convicted but also preferred several appeals on the file of this court. 4. the complaint as well as the appeal are frivolous and the magistrate rightly has thrown out the complaint.b.s.a. swamy, j. 1. the asstt. cit, circle i, ayakar bhavan, hyderabad, is the appellant herein who is the complainant in c.c. no. 124 of 1991. aggrieved by the orders passed by the special judge for economic offences, hyderabad, dt. 24th may, 1993, the present appeal is filed. 2. the facts in this case are not in dispute. the it act as it stood prior to 1st april, 1989, under s. 276dd provides for prosecution of persons who received deposits or loans otherwise than by an account payee bank cheque or account payee draft and provides for imprisonment for a term extending to two years and also liable to fine equal to the amount of such loan or deposit. but parliament in its wisdom omitted the said section from the act by the direct tax laws (amendment) act, 1987, which came into force on 1st april, 1989. in this case, the department launched the prosecution against the accused for accepting the deposit otherwise than by way of account payee cheque or account payee bank draft on different dates subsequent to 1st april, 1989, by contending that though s. 276dd is omitted s. 269ss is on the statute book, and any violation of that provision must necessarily lead to criminal prosecution. in support of their case, they relied on r. 132a of the defence of india rules, 1962, promulgated under the defence of india act. but the said rule ceased to be in existence on the issuance of a notification by the ministry of home affairs on 30th march, 1965, by which the defence of india (amendment) rules, 1965, were promulgated. in a case of identical nature such a contention was negatived by the supreme court way back in 1970 in rayala corporation (p) ltd. vs. director of enforcement air 1970 sc 494, wherein their lordships, while adverting to the arguments of mr. sen, conceded the possibility that if a prosecution had already been started while r. 132a was in force, that prosecution might have been competently continued. once the rule was omitted altogether, no new proceeding by way of prosecution could be initiated even though it might be in respect of an offence committed earlier during the period that the rule was in force. we are inclined to agree with the submission of mr. sen that the language contained in clause 2 of the defence of india (amendment) rules, 1965, can only afford protection to action already taken while the rule was in force, but cannot justify initiation of new proceeding which will not be a thing done or omitted to be done under the rule but a new act of initiating a proceeding after the rule had ceased to exist. on this interpretation, the complaint made for the offence under r. 132a(4) of the defence of india rules, after 1st april, 1965, when the rule was omitted, has to be held invalid. 3. that being the settled legal position with regard to a provision which has been omitted or ceased to be in force, the department in this case filed the present complaint for the deposits accepted by the accused after omission of s. 276dd. they not only filed the complaint and failed in their attempt to get the accused convicted but also preferred several appeals on the file of this court. my learned brother justice bapat passed a detailed order in crl. appeal no. 257 of 1994, dt. 3rd september, 1996. it is not known how many hundreds or thousands of cases of such frivolous nature were filed all over the country. this court notes with concern the apathy on the part of the officials and the way they are squandering away public money without any justification. unless the aspect of accountability is introduced for the commissions and omissions on the part of the officials concerned, there is no safety for the public monies in the hands of these officers. 4. the complaint as well as the appeal are frivolous and the magistrate rightly has thrown out the complaint. 5. the appeal is, therefore, dismissed.