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MONTHLY REPORT FOR SEPTEMBER , 2007 CHIEF ADVISER Pradeep K. Mittal B.Com., LL.B., FCS, pkm171@yahoo.com Advocate--9811044365 Central Council Member The Institute of Company Secretaries of India

Sh.Anil Kumar Gupta-9810421739B.Com. (Hons.) FCA, Practicing Chartered Accountant CONTRIBUTION FOR - DIRECT TAX

___________________________________________________________Sh C M Bindal, -9414962454FCS Company Secretary in Practice – JAIPURCONTRIBUTION FOR – SEBI LAWS Sh. Rakesh Garg –9810216270FCAPracticing Chartered AccountantCONTRIBUTION FOR - SALES TAX & VAT

___________________________________________________________Sh. Pradeep kumar Aggarwal - 9811300732Practicing Chartered Accountant

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CONTRIBUTION FOR - Vedic Astrology____________________________________________________________

HONORARY ASSOCIATESDr. Sanjeev KumarM.Com. LL.B., Ph.D, PGDPIRL, FICWA, FCS

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SALES TAX & VAT BY SHRI RAKESH GARG –9810216270

Plastic name plates for motor vehicles are accessories of motor vehicles – Pragati Silicons Pvt. Ltd. v. Commissioner of Central Excise (2007) 8 VST 705 (SC)

Payment of tax at concessional rate without submission of required declaration forms amounts to non-payment of "tax admittedly payable": Concessional rate of tax can be claimed on fulfillment of certain conditions and filing of requisite forms and in the absence of production of requisite forms, the dealer is liable to pay tax at the normal rate : Interest payable on unpaid part of tax calculated at full rate – Commissioner of Trade Tax v. Nervy Lock Company (2007) 8 VST 683(All)

Transportation of goods outside State : Seizure and penalty due to not stating challan number and date in invoice in consignment note : Invalid, in absence of finding such omission with intention to evade tax : A document could not be held to be fake merely because it is undated – Kartick Chandra Saha v. CTO (2007) 8 VST 692 (WBTT)

Grinding of sabut masala (whole spices) does not amount to manufacture – CST v. Ashok Grah Udyog Kendra (P) Ltd. (2007) 8 VST 716 (All)

Construction of houses on land purchased and developed for sales to prospective customers : Allottees not getting any right until the execution and registration of sale deed : Construction not undertaken for and on behalf of prospective allottees : Not a works contract – Assotech Realty Private Limited v. State of Uttar Pradesh (2007) 8 VST 738 (All)

Seller reducing price by issuing credit note in favour of purchaser on complaint about quality of goods sold : Not sales return : Credit amount not part of turnover : However, unless amount of tax is refunded (or credit note for tax is issued) to the customer, no refund of tax by the Department – Parishudh

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Machines Private Limited v. Commissioner of Trade Tax (2007) 8 VST 547 (All)

Toughened safety glass including wind screen, door screen, side screen and back screen falls under "glass and glassware including optical glass in all its forms" – Trutuf Safety Glass Industries v. CST (2007) 8 VST 661(SC)

Purchase of printing ink by newspaper establishment at concessional rate of tax against declaration form : Newspaper are not ‘goods’ : It is misuse of declaration form warranting penalty – Malayala Manorama Company Ltd. v. Assistant Commissioner (KGST), Commercial Taxes (2007) 8 VST 604 (Ker)

Order of suo motu rectification of assessment after period of limitation invalid though notice initiating proceedings within time-limit – Assam Tea Brokers Pvt. Ltd. v. State of Assam (2007) 8 VST 621 (Gauhati)

Preamble to statute, discloses primary intention, cannot override express provisions of statute – Ceeta Industries v. State of Karnataka (2007) 8 VST 638 (Karn)

SEBI/SECURITIES LAWS BY SHRI C.M.BINDAL-9414962454

NOTIFICATIONS/CIRCULARS/REGULATIONS/RULES:

CTRs- It has been decided that instead of filing complete CTR with SEBI AMCs (asset management companies) shall do exceptional reporting on bimonthly basis – No.SEBI/IMD/CIR No. 6/98057/07, dated 5th July, 2007.Debentures – Companies issuing debentures to disseminate all information regarding debentures to investors/general public – MIRSD/DPS III/CIR-11/07 dated 6th August, 2007.

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Takeover price – Clarification regarding news item `SEBI cannot decide takeover price’ – Circular No. OCH/COMM/2007/94050 dated 22nd May, 2007.

Venture Capital Funds – Guidelines for overseas investments in off-shore venture capital undertakings – SEBI/VCF/CIR No.1/98645/2007 dated 9th August, 2007.

Establishment of connectivity with both NSDL and CDSL – Companies eligible for shifting from Trade for Trade Segment (TFTS) to Rolling Segment – Circular No. MRD/DOP/SE/CIR-10/07, dated 25th July, 2007.

LEGAL CASES:

DHARAMSHI CAPITAL SERVICES VS. SEBI (2007) 77 SCL 114 (SAT):

Charge of aiding and abetting KFL to purchase its own shares from the market stands established. Trades executed by the appellant as a sub-broker also violated regulation 4 of the Regulations. He has also violated the code of conduct. Violation committed is rather serious and, therefore, the Board was justified in debarring him from accessing the capital market for a period of five years. [Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995, Regn.4].

DHARAMSHI CAPITAL SERVICES VS. SEBI (2007) 77 SCL 114 (SAT):

Appellant acted as a sub-broker in the trades. He did not acquire the shares for himself either directly or while acting in concert with others. He is not an acquirer within the meaning of the takeover code. Impugned order insofar it issues a direction to the appellant to make a public announcement is liable to be quashed. [Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation 1997, Regn. 11].

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CUSTOMS, CENTRAL EXICSE - BY SHRI P K MITTAL AND SERVICE TAX-

The Know-how fee paid to a party under Technology and Royalty Agreement for transfer of technology for manufacture of a new model, cannot be included in the assessable value of the goods which has been imported solely for the purpose of trading. Hyundai Motor India Ltd. Vs. CCE 2007 (214) ELT 436.

Where the Cenvat Credit has been taken but not utilized, the assessee is not liable to pay interest on the amount of Cenvat Credit, if the assessee is called upon to reverse the Cenvat Credit. CCE Vs. Maruti Udyog Ltd. 2007 (214) ELT 173 Punjab & Haryana.

The goods which are intended to be supplied to a unit located in SEZ u/s 69 of the Customs Act, 1962 cannot be considered to be exported. Shree Shakti LPG Ltd. Vs. Union of India 2007 (214) ELT Bombay High Court, Bombay.

In case the goods are lying fully manufactured on the shop floor but not tested for quality control, it cannot be said that the goods are ready for dispatch and cannot be confiscated on the ground that there was an attempt on the part of assessee to remove the goods clandestinely. Supreme Industries Ltd. Vs. CEGAT 2007 (214) ELT 187 Madhya Pradesh High Court.

In case the Cenvat Credit has been availed and utilized during the period when the final product was dutiable but later on when it became exempt, the Cenvat credit is not liable to be reversed. Swastik Textile Engineers Pvt.Ltd. Vs. CCE Ahmedabad 2007 (214) ELT 198.

Upon remand being made by Tribunal to the Assistant Commissioner, who, did not pass the order strictly in accordance with the mandate of the Tribunal, it is not necessary that the assessee must file an appeal before the Commissioner(Appeal) challenging the order of Asstt Commissioner , it can directly approach the Tribunal to have the orders set-aside and to seek relief. GMMCO Ltd. Vs. CCE 2007 (214) ELT 353.

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In case brand name has not been affixed on the machine but on the letter-head and invoices, the SSI exemption cannot be denied on the ground that branded goods have not been manufactured. CCE Vs. Gayatri Engineers 2007 (214) ELT 345.

Shortage of raw materials in the store room does not lead to the conclusion that there has been clandestine manufacture and removal of goods and demand of duty based solely on this ground is liable to be quashed. Ramsons Industries Ltd. Vs. CCE 2007 (214) ELT 340 Tribunal.

The Delhi High Court will not have jurisdiction to entertain writ petition because the office of Settlement Commission is at Delhi. The High Court having jurisdiction over the authority who has either issued the Show Cause Notice or where the Order-in-Original was passed, would have jurisdiction to hear writ petition. Indian Perfumes & Flowers Vs. Customs & Excise Settlement Commission 2007 (142) Delhi Law Times 215 Delhi DB.

The Show Cause Notice is the foundation on which the Department has to build its case and if the allegations in the Show Cause Notice are not specific and are on the contrary vague, lacks details and/or un-intelligible i.e. sufficient to hold that noticee was not given proper opportunity to meet the allegations of the Show Cause Notice and the Show Cause Notice is liable to be quashed. CCE Vs. Brindawan Breweries Pvt. Ltd. 2007 (5) SCC 388.

In a Group, there are three manufacturing companies and one marketing company. Where the goods sold to an independent buyer is on the same price as that of sold by the three companies to the marketing company, the price cannot be discarded and the clearances of all the three companies cannot be clubbed when these are not inter-connected companies. CCE Vs. Arofine Polymerts Ltd. 2007 (214) ELT 241.

Service Tax – New Challan Form GAR-7 to be used for payment of Excise Duty and Service Tax.

New Master Circular covering all issues on Service Tax has been issued by the Department.

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Helpline established by the Central Excise and Service Tax Department and queries could be address; Help_excise@yahoo.com,

Partners of a partnership firm are personally liable for payment of arrears of excise duty, liability for which was incurred by the partnership firm before its dissolution. Gopal Industries Ltd. Vs. CCE Indore 2007 (7) STR 502 (Tribunal Larger Bench)

Transfer of Technical know-how/transfer of technology for setting up a plant for manufacture of a particular item by a foreign party, service tax under the heading Consulting Engineer cannot be levied. Volvo India Ltd. Vs. Commissioner Service Tax 2007 (7) STR)600

COMPANIES ACT & CORPORATE LAWS –BY SHRI P K MITTAL

The issuance of Additional Shares by one Group with the sole object of getting control of the Company by becoming majority shareholder is a clear act of oppression on the part of Respondents and such allotment is liable to be quashed. Dr. Ashok Parbat Vs.Ketki Research Institute of Medical Sciences Ltd. 2007 (79) CLA 161.

Where the Bank/Financial Institution has initiated proceedings U/s 13(4) of the Securitization Act, 2002, the Creditor is not entitled to challenge the same by way of Writ Petition under Article 226 of the Constitution of India but can challenge only by moving a petition U/s 17 of the said Act before the Debt Recovery Tribunal. Trade Well Vs. Indian Bank 2007 (79) CLA 240 Bombay High Court (275).

The Chief Metropolitan Magistrate/ District Magistrate has no right or authority to assume the role of adjudicatory authority when the Bank/Financial Institutions has invoked the provisions of Section 13 (4) under Securitization Act against the creditor for recovery of dues, the District Magistrate/Chief Metropolitan Magistrate has to simply execute the order passed by the Bank/FI, and if a person is aggrieved he can challenge the same before the Debt Recovery Tribunal U/s 14 of the said Act. Bank of Indore Vs. Panka Dilip Bhai 2007 (79) CLA 275 Gujarat High Court.

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The Petitioner has challenged para 9 and 33 of the Accounting Standard 22, as prescribed in the Accounting Standard Rules on the contention that same are not in conformity with the provisions of the Companies Act, the Court dismissed the writ petition holding otherwise. 2007 (79) CLA 296 Calcutta High Court.

In a petition U/s 391 of the Companies Act, the High Court is not required to ascertain as to whether better scheme could have been possible unless the Court finds that the action of majority is manifestly unfair and fraudulent. Objection to the Scheme of Arrangement alleging transfer of funds by the Company to its subsidiaries by giving interest free loan cannot be challenged in this petition. The High Court in a petition U/s 391 and 394 of the Companies Act, 1956 shall have the power to sanction the Scheme of Arrangement specially with respect to disposal of property – although Section 13 of the Securitization Act, which also deals with disposal of property and secured creditors have invoked the provisions of Securitization Act for recovery of debts and have claim over the said Assets which is subject matter of “Scheme of Arrangement” and for which the High Court has passed the orders. Core Health Care Ltd. 2007 (79) CLA 318 Gujarat.

CIVIL LAWS AND ARBITRATION LAWS – BY SHRI P K MITTAL

In case the plaint has been rejected on an application under Order 7 Rule 11, the said order is a decree within the meaning of Section 2(2) CPC and only appeal lies U/s 96 of CPC.

In a Show Cause Notice under FEMA, the Noticee is not entitled to all the documents, papers, which are not relied upon in the Show Cause Notice. The Court held that the Department is liable to supply copies of only those documents, which have been relied in the Show Cause Notice. Kanwar Jagat Singh Vs. Director of Enforcement 2007 (142) DLT 49(Delhi HC).

Mere bald allegations that one or the other Director of the Company are in-charge and responsible for day-to-day affairs of

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the Company is not sufficient to rope in all the Directors. The complaint is liable to be quashed in a petition under Section 482 of Cr PC unless specific allegations are leveled against each of the Directors. Ashok Newatia Vs. State 2007 (142) DLT 148 (Delhi HC).

In case the net-worth of the Company has turned positive and the Sick Industrial Company has made provisions for repayment of statutory and non-statutory dues to the satisfaction of various claimants, the proceedings before BIFR cannot survive as the said Company is no longer a Sick Industrial Company. The High Court has set-aside the order of BIFR for winding up of Sick Industrial Company which order was confirmed by AIFR. Sethi Industries Ltd. Vs. AAIFR 2007 (141) DLT 733 (Delhi) DB.

If a formal agreement has not been signed between the parties but only “Bayana Receipt” has been executed, under which the seller has received some advance payment from the purchaser, it cannot be contended no Agreement has taken between the parties. The Seller is under an obligation to execute the Sale Deed failing which the Suit for Specific performance would be maintainable. Sobhag Narayan Mathur Vs. Pragya Agrawal 2007 (141) DLT 356 (DHC).

In the event of default of payment of Sales Tax, which has been collected by the Company but not paid, the recovery proceedings has been initiated against the Working Director of the Company, the Company is entitled to file a Writ Petition and can take shelter under Section 22 of SICA. It is only the Director may file writ petition since the recovery proceedings has been initiated against him personally and not against the Company. Modi Rubber Ltd. Vs. Govt. of NCT of Delhi 2007 (141) DLT 752 (Delhi) DB.

Mere pendency of an appeal U/s 37 of Arbitration and Conciliation Act,1996 does not entitle the Appellant automatic stay against the execution proceedings filed by the Decree Holder before the Court. The appellant has to obtain a specific order of stay of executing proceedings. Décor India Pvt. Ltd. Vs. National Building Construction Corporation Ltd. 2007 (142) DLT 21 Division Bench.

In case the appointing authority fails/neglects to appoint an arbitrator within 30 days from the date of notice, the High Court

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U/s 11 of the Arbitration and Conciliation Act is entitled to appoint an independent and impartial Arbitrator. HBHL-VKS (JV) Vs. Union of India 2007 (1) Arbitration Law Journal 4 (Delhi High Court Full Bench).

CONSUMER LAWS – BY SHRI P.K.MITTAL A mere fact that the meters were replaced twice by the Electricity Supply Agency does not lead to conclusion that meters were tampered by the consumer unless cogent evidence has been brought by Electricity Supply Company against the Consumer and the agency is entitled to charge for theft. Haryana Vidyut Prasaran Nigam Ltd. Vs. Agrawal Ice Factory 207 (CTJ) 927 (National Commission)

In case bank has lost a cheque for Rs. 14,000/-, which was deposited by an account holder for clearing the same and crediting to the amount to his account, the Bank would be liable not for the amount of cheque but for some nominal compensation – say Rs. 5000/- Canara Bank Vs. Sudhir Ahuja 2007 (CTJ) 966 National Commission.

MRTP LAWS – BY SHRI P K MITTAL

In case the amount of Fixed Deposit has not been refunded upon the date of maturity, non-payment would amount to unfair Trade Practice within the meaning of Section 36A of the MRTP Act and the MRTP Commission can allow the petition for refund of Fixed Deposit. Jagram Nirwan Kataria Vs. Manjog Investments 2007 CTJ 174 MRTPC.

Non-payment of Security Deposit and also non remittance of payment towards goods returned by the stockists constitute “Restrictive Trade Practice” and the petition U/s 12B of the MRTP Act before the MRTP Commission would be maintainable to seek refund. Gokhlesh Enterprises Vs. Pajon Ltd. 2007 (CTJ) 200 MRTPC.

In case a builder has not carried out the construction nor refunded the amount of deposit to the aggrieved party, this illegal action amounts to ”Restrictive Trade Practice” and the amount is liable to be refunded with interest in a petition under Section 12B of the MRTP before MRTP Commission. Smt. Kala Sethi Vs. United Traders Pvt.Ltd. 2007(CTJ) 203 MRTPC.

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INDUSTRIAL & LABOUR LAWS – BY SHRI P K MITTAL

The action of employer initiating disciplinary proceedings against an employee after long lapse of time is wholly deprecable as it deprives the Noticee its right to defend properly and as per mandate of law. Smonath Manocha Vs. Punjab & Sind Bank 2007 (1423) DLT 138.

KUNDLI & EDUCATIONAL PURSUITS – BY SHRI PRADEEP K. AGGARWAL - CHARTERED ACCOUNTANT-9811300732

4th & 5th houses play important role in analyzing the educational pursuits in any horoscope because from 4th

house, we consider education & from 5th house it is intelligence and education both. Intelligence and education are closely interrelated & educational achievements are analyzed from 10th house.

There are 9 planets in astrological orbit and each planet indicates different wings of education like:-

MARS : Justice, mathematics, sports, army, and police force.

SUN : Medicines, Govt. jobs, administration

MOON : Nursing, Gynecology, Botany water and milk.

MERCURY : Literature, computer programming, commerce, chemical and distillery, Architecture, Gemology, Banking and astrologers.

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JUPITER : Education, Justice, Secret Agent, Finance & Commerce, International Ventures, Shipping and Insurance.

SATURN : Labor management, civil engineering, life insurance and refrigeration,

Foreign Language.

URANUS : Railways, Automobiles & Aero plane, Electric engineering Gimmicks

NEPTUNE : Aero Engineering, Chemical Engineering, Air-conditioning, Alchemy, Politics, Market Research etc.

PLUTO : Planning, Nuclear Science, Spying, Archeology, Space, Ships, Spiritualism.

RAHU : Heavy Engineering, Foreign Languages, Aerial Navigations, Medical Sciences.

There are broad indications of the planets and again they inherit the qualities of the houses of their placements.

While mercury indicates intelligence, Jupiter is responsible for educational development. Again we analyze the same things from 2nd , 4th and 9th house.

It means if mercury & Jupiter are associated with any of 2, 4 and 9th houses, they give extra intelligence and analytical abilities in a person.

For Example, good position of Mercury & Jupiter in astro chart, helps attain higher degrees in finance and banking like CA, MBA(Finance) etc. and if Mercury and Jupiter are placed/associated with 2nd, 4th and 9th houses of any professional, it will give them extra intelligence and analytical powers.

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If 4th house lord is in Lagna and Lagnesh is in 4 th house or Mercury is in ascendant and 4th house is strong and there is no malefic influence on it, person becomes great educationist, reformist and academician.

If 4th lord is placed in 6, 8 or 12th houses or is in conjunctions with or accepted by malefic planets then person becomes educationless or he/she faces problems in studies.

Again if Mercury is in own house, exalted in Kendra from Lagna, or in angle, then the person gets good education, properties and vehicles of highest order.

For intelligence we see the following combinations:-

1. (a) If mercury is lord of 5th house and is associated with/aspected by benefic planets

(b) 5th lord is conjucted with benefic planets

(c ) If mercury is exalted or placed in 5th house.

2. If lord of the house, there 5th lord is posited, is aspected or is surrounded on both sides by benefic planets then also person attains the sharp intelligence.

3. If Jupiter is in 5th house, Mercury is not functional, malefic and 5th house is surrounded by benefic planet then also good results are attained.For Poor Intelligence:

(a) If Lagnesh is debilitated or conjucted by malefic, person becomes less intelligent.

(b) If 5th lord Jupiter & Venus are placed in 6,8 and 12th

houses or are combust, then also intelligence is of poor degree.

MEMORY: If Saturn and Rahu are placed in 5th house and 5th

house is not aspected by benefic planets and it is aspected by

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malefic, and mercury is in 12th house, then memory of a person becomes very weak.Contrary, if 5th lord is conjucted/aspected by benefic and 5th

house is also conjucted or aspected by benefics, or lord of 5 th

house from Jupiter is placed in Angle or Centre, then person gets memory of high degree.

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DISCLAIMERS

All reasonable care has been exercised in compilation of information in this report. However, the PKMG Law Chambers, its members on panel(s) or advisors or employees shall not in any way be responsible for the consequences of any action taken on the basis of reliance upon the contents.

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CIRCULATION BY

This Report is circulated by Shri Praveen K. Mittal for PKMG Law Chambers, 171 Chitra Vihar, Delhi-110 092, Phones: (011) 22540549, 22524229, 9810826436, 9811044365

Email: pkm171@yahoo.com

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