The Allahabad High Court while allowing the petition held that presence of mens rea for evasion of tax is a sine qua non for imposition of penalty.

A typographical error in the e-way bill without any further material to substantiate the intention to evade tax should not and cannot lead to imposition of penalty.

A Single Bench of Justice Shekhar B Saraf passed this order while hearing a petition filed by M/S Hindustan Herbal Cosmetics.

This is an application under Article 226 of the Constitution of India wherein the petitioner assails the order passed by the Additional Commissioner Grade-2 (Appeal), Commercial Tax, Ghaziabad/ respondent No 3 dated August 29, 2019 and the order of the imposition of the penalty dated May 24, 2018 passed by the Assistant Commercial, Commercial Tax, Squad Unit-VI, Ghaziabad/ respondent No2.

The case of the petitioner is that the petitioner is a duly registered dealer under the Goods and Service Tax Act, 2017 and is a seller of cosmetics. The petitioner was supplying cosmetics to another registered dealer, namely, M/s Shree Sai Infotech in Jharkhand and the transaction was duly covered by a tax invoice, a bilty and e-way bill, all dated May 23, 2018.

It is a contention of the petitioner that the consignment of goods was sent by the petitioner in Vehicle. When the vehicle was in transit, the same was intercepted on 23.5.2018 10.40 P.M. by the Goods and Service Tax authorities. The seizure order was passed on the ground that the vehicle number in Part-B of the e-way bill was incorrect as the e-way bill showed the other vehicle number.

Apart from the above factual position, the Court noted that there was no other infraction on the part of the petitioner. Furthermore, the authorities have imposed a penalty only on the ground that the vehicle number was not mentioned correctly. There is no allegation of any attempt by the petitioner for evasion of tax as the e-way bill, bilty and the tax invoice were matching and the consignee was also a registered dealer.

Counsel on behalf of the petitioner has submitted that number 5332 was typed incorrectly as 3552. He has submitted that this is so obviously a typographical error and similar mistake has also been made in the impugned order that has been passed by the authority concerned.

Per contra, Ravi Shanker Pandey, Additional Chief Standing Counsel has submitted that the Department via a circular has allowed non imposition of penalty in cases where there are mistakes of two digits in the vehicle number and no further.

He has further submitted that the judgment in M/s Varun Beverages Limited (supra) would not apply as the same was a case of stock transfer and there was no question of any tax liability in that case.

He has also attempted to distinguish the Supreme Court judgment on the ground that it was a case wherein the e-way bill had expired just before the vehicle was detained and seized.

In the case, the court found that there is definitely an error with regard to typing of the vehicle number and there is a difference of three digits instead of the permitted two digits (as per the government circular) as submitted by the Additional Chief Standing Counsel. However, law is not to remain in a vacuum and has to be applied equitably in appropriate cases. The judgment in M/s Varun Beverages Limited (supra) may be referred to for this purpose.

“Upon perusal of the judgments, the principle that emerges is that presence of mens rea for evasion of tax is a sine qua non for imposition of penalty. A typographical error in the e-way bill without any further material to substantiate the intention to evade tax should not and cannot lead to imposition of penalty. In the case of M/s Varun Beverages Limited (supra) there was a typographical error in the e-way bill of 4 letters (HR – 73).

In this case, instead of ‘5332’, ‘3552’ was incorrectly entered into the e-way bill which clearly appears to be a typographical error. In certain cases where lapses by the dealers are major, it may be deemed that there is an intention to evade tax but not so in every case. Typically when the error is a minor error of the nature found in this particular case, I am of the view that imposition of penalty under Section 129 of the Act is without jurisdiction and illegal in law”, the Court observed while allowing the petition.

“In light of the above findings, the orders dated 29.8.2019 and 24.5.2018 are quashed and set-aside. The consequential reliefs to be provided to the petitioner within the next four weeks”, the Court ordered

The Supreme Court has reduced the penalty imposed on a lawyer, who was punished for Contempt of Court, from Rs two lakh to Rs one lakh.

Hearing an appeal filed by the Advocate, the Bench of Justice Surya Kant and Justice J.K. Maheshwari, however, upheld the sentence given to the advocate for raising frivolous allegations against another advocate that the latter was asking the parties to give him briefs and money in the name of one of the Judges of the High Court

As per the case, the appellant was a practicing advocate in the Calcutta High Court. When a Division Bench of the High Court was hearing FMA No.623 of 2022, he filed an application being CAN No.3 of 2022 against the lawyer for the opposite side.

He alleged that the other lawyer was asking the parties to give him briefs and money in the name of one of the Judges of the Bench. The Appellant also filed a complaint before the Calcutta Commissioner of Police on the matter.

The Division Bench of the High Court initiated suo motu Contempt of Court proceedings against the Appellant, who challenged the same before the Supreme Court in SLP(C)No.18622/2022.

The Apex Court, on November 14, 2022, disposed of the SLP on the basis of assurance and an undertaking given by the Appellant that he would tender an unconditional apology before the High Court and shall withdraw CAN No.3/2022 in FMA No.623/2022. 

The lawyer further undertook to assist the Bench so that the pending matter could be decided on merits, besides an undertaking that he shall not file any such application or conduct himself in the future to invite contempt proceedings. 

However, the Appellant did not abide by the undertaking given and continued filing conditional letters before the High Court, reiterating the allegations against members of the bar.

In its order passed on December 15 last year, the High Court held the Appellant guilty of Contempt of Court. It observed that there cannot be both apology and justification for an act; since the conduct of the lawyer had interfered with the administration of justice and lowered the dignity of the High Court. 

It also noted that the Advocate did not express any remorse over the incident. The High Court then directed the lawyer to deposit Rs two lakh with the Registrar General, saying that the sum would be refunded after a period of three years, in case the Appellant conducted himself respectfully. Otherwise, the amount would stand forfeited, it added. 

The Bench further said in the order that in case the sum was not deposited, the Commissioner of Police would take the lawyer in his custody. Since the Appellant failed to deposit Rs two lakh with the Court, he was arrested by the Police. The lawyer then preferred an appeal before the Supreme Court against this order.

The Apex Court had earlier directed release of the lawyer, if he deposited Rs one lakh in three days. As the Advocate deposited the amount, he was released. 

The Supreme Court, during the final hearing in the case, modified the High Court order dated December 15, 2022 to the extent of amount payable by the Appellant and reduced the same from Rs two lakh to Rs one lakh. 

The top court of the country observed that the amount of Rs one lakh would be refunded after two years to the Appellant, if his conduct did not give cause to initiate contempt proceedings in future. 

However, in case the Appellant’s conduct was not appropriate, then the amount shall stand forfeited and be paid to the State Legal Services Authority, it added.

(Case title: Gunjan Sinha Alias Kanishk Sinha vs The State of West Bengal & Anr)

On February 10, the Supreme Court disposed appeals filed by the National Medical Commission (NMC) and Medical Assessment and Rating Board (MARB) against a Bombay High Court order imposing Rs 2.5 crore penalty on Annasaheb Chudaman Patil Memorial Medical College for enrolling students despite a stay order.

The College was established in 1990 with an annual intake capacity of 100 seats for the MBBS course. The MBBS degree granted by the University was recognised under Section 11 of the Indian Medical Council Act, 1956, for 100 seats in 1997. The recognition had to be renewed every five years. However, for the academic years of 2017-18 and 2018-19, the College was not granted permission to admit students.

On November 30, 2020, the College submitted an application for increase of its intake capacity from 100 to 150 seats commencing from 2021-22. At the same time, the renewal of recognition became due in 2021. During the Covid-19 pandemic, no inspection could be conducted by the NMC. On May 10, 2021, an affidavit was filed on behalf of the Medical College stating that there were no deficiencies. The Undergraduate Medical Education Board of the NMC, bearing in mind the onset of Covid-19, granted renewal of recognition on July 15, 2021, for students admitted for the academic session 2016-17. 

The application submitted by the Medical College was then processed and a physical inspection carried out on 8/9 October, 2021, for increase of seats from 100 to 150. A letter of intent was issued on November 16, 2021, for approving the increase in intake, subject to the Medical College submitting the requisite undertaking and documents, together with the acceptance letter. 

This it did on November 23, 2021. On November 25, a letter of permission was issued after the application submitted by the College for increase in the intake capacity for 2021-22 was approved. This was subject to the condition that if during the course of a surprise inspection the College was found not maintaining minimum standards, the letter of permission would be withdrawn.

In the meantime, certain complaints were received by the Union health ministry alleging irregularities and deficiencies in the infrastructure of the Medical College. A team of inspectors was deputed to conduct a surprise physical inspection on 14/15 January, 2022. They found gross deficiency of faculty, residents and clinical material. After the receipt of the assessor’s report, a communication on January 19 was addressed to the Medical College withdrawing the letter of permission for increase in the intake capacity and directing the stoppage of admission for academic year 2021-22.

The Medical College appealed before the Aurangabad Bench of the High Court of Judicature at Bombay. The petition was disposed of by directing the appellants (NMC and MARB) to conduct an inspection of the Medical College by January 30, 2022, and a final decision was directed to be taken by February 3, 2022. The High Court upheld the order of the appellants dated January 19, 2022, and withdrew permission for 50 MBBS seats. However, the High Court held that the College was entitled to admit students for 100 MBBS seats for 2021-22 as no action was taken by the appellants for withdrawal of recognition.

The Supreme Court was apprised of the fact that after the judgment of the High Court, a notice to show cause was issued on March 7, 2022, to the Medical College. It asked why the recognition which was granted on July 15, 2021, and the permission to start and/or conduct postgraduate courses should not be withdrawn. The College was directed to stop admissions due to the deficiencies.

The top court stayed part of the judgment of the High Court permitting the Medical College to admit 100 MBBS students for 2021-22. The NMC and MARB were granted liberty to carry out a fresh inspection within two months for the purpose of determining whether any deficiencies in complying with the required norms continued to exist.

Thereafter, an inspection of the Medical College was carried out on 28/29 April 2022 for 2021-22. In view of the inspection report, the appellants permitted the Medical College to admit 100 students. But the fact remains that despite the orders of the top court granting stay, the Medical College continued to admit students for 2021- 22. No application was moved before the Court for variation of its order or for seeking permission to admit 100 students.

The bench of Chief Justice of India DY Chandrachud and Justice PS Narasimha and Justice JB Pardiwala observed that the High Court, while upholding the withdrawal of the permission to admit 50 students, allowed the Medical College to continue with the admission of 100 students. This order was stayed by the apex court on April 8, 2022, so the College should not have proceeded with the admission process. This is a breach of the directions of the top court. The subsequent inspection conducted in pursuance of the interim order of the Court did not entitle the College to take the law for granted. 

The Supreme Court order read: “On one hand, the Court has due regard to the consequences which will be faced by the students if their admissions are disturbed, at this stage. Equally, the sanctity of the judicial process has to be observed. We are, therefore, of the considered view in the exercise of the jurisdiction under Article 142 of the Constitution that the admissions which were granted to 100 students for 2021- 22 should not be disturbed conditional on the Medical College depositing an amount of Rs 2.5 crores within a period of four weeks. The amount shall be deposited with the All India Institute of Medical Sciences, New Delhi and a proof of receipt shall be furnished both to the appellants and to the Registry of this Court. The amount, upon deposit, shall be utilized at the discretion of the Director, AIIMS for meeting the requirements of poor and needy patients. The amount which has been directed to be deposited by the Medical College by way of penalty shall not be recoverable from the students in any manner, whether for the present year or thereafter.”

This is not the first time that medical colleges have flouted norms and been punished. In 2016, a two-member Supreme Court bench, comprising Justice Madan B Lokur and Justice NV Ramana, imposed a penalty of Rs 5 crore on Kalinga Institute of Medical Sciences for admitting an additional 50 students in violation of the order of the Medical Council of India. It was clarified by the Court that the Rs 5 crore deposited shall not be recovered in any manner from any student or adjusted against the fees or provision of facilities for students of any present or subsequent batches.

In 2021, a Supreme Court bench of Justices L Nageswara Rao and S Ravindra Bhat imposed a fine of Rs 5 crore on a private medical college in Unnao for granting admission to students in violation of the Medical Council of India regulations, noting that the College had admitted 132 students without seeking a nod from Director General Medical Education, Uttar Pradesh.

Similarly, the Madras High Court in March 2022 came down on a dental college and hospital in Kundrathur, Chennai, which had interpolated the attendance register of two students and not allowed them to complete their course since 2018. This was because they did not pay the excess fees demanded by the institution. The High Court imposed a penalty of Rs 3 crore on the college. 

—By Shivam Sharma and India Legal Bureau

The National Company Law Appellate Tribunal (NCLAT), Delhi on Friday agreed to hear the petition filed by Google against the CCI order of October 25, 2022, directing the tech giant to deposit 10 percent penalty amount of Rs 936.44 crore in the case Alphabet Inc & Ors vs Competition Commission of India & Ors.

The direction was passed by the Principal Bench of Justice Rakesh Kumar (Judicial Member) and Dr. Alok Srivastava (Technical Member), which denied any interim relief to Google and fixed the matter for hearing on April 17.

Earlier on January 11, Senior Advocate Abhishek Manu Singhvi had mentioned the matter before the Supreme Court, stating that the order would force the company to change the way it marketed its Android platform.

The Bench of Chief Justice of India (CJI) D.Y. Chandrachud and Justice P.S. Narasimha had agreed to take up Google’s petition on January 16, challenging the January 4 order of NCLAT, which upheld the imposition of Rs 1,337 crore penalty by the Competition Commission of India (CCI) on the tech giant for abusing its dominant position.

In October 2022, penalty was imposed on Google by CCI for abusing its strong position in multiple markets in the Android mobile device ecosystem.

The Counsel appearing for Google had contended before the Supreme Court that CCI passed extraordinary directions in the case, stating that the compliance date was January 19 and Google filed the plea in December.

He said there has been urgency since January 19 was compliance date and that there was no finding on abuse of dominance.

As per Singhvi, the CCI order passed in October 2022, was challenged by the NCLAT on January 4. He said Google filed the appeal in December 2022 and hence, no case for interim relief was made out.
The Tribunal had observed that since it did not show any urgency after the CCI passed the verdict in October last year, interim relief could not be granted to the tech gaint.

As per the NCLAT order, the appellant did not show any urgency after the CCI passed the verdict in October last year. It observed that had there been any such urgency, the appellant would have approached this tribunal forthwith

However, the Bench of Justice Rakesh Kumar, member (judicial) and Dr Alok Srivastava, member (technical), listed the matter for final hearing on April 3, considering the urgency shown by Google for interim relief and taking into account the voluminous records and long order of the CCI.

NCLAT had further directed Google to deposit 10 percent of the Rs 1337.76 crore fine amount within three weeks.

In October 2022, CCI had imposed the penalty on Google for abusing its dominant position in multiple markets in the Android mobile device ecosystem.

Apart from the monetary penalty, Google was further ceased and desisted from participating in anti-competitive practices and was directed to modify its conduct within a defined timeline. Google challenged the order before the NCLAT.

Alphabet Inc, a multinational technology conglomerate holding company, created through restructuring of Google on October 2, 2015, became the parent company of Google and several former Google subsidiaries. 

Google LLC (formerly Google Inc) was a Delaware limited liability company and wholly-owned subsidiary of Alphabet Inc, which provided a variety of information technology-related services and an internet search service. 

Google India Private Limited (Google India) is an indirect subsidiary of Google LLC.

The Supreme Court will take up Google’s petition on January 16, challenging an order of the National Company Law Appellate Tribunal (NCLAT), which upheld the imposition of Rs 1,337 crore penalty by the Competition Commission of India (CCI) on the tech giant for abusing its dominant position.

Senior Advocate Abhishek Manu Singhvi mentioned the matter before the Bench of Chief Justice of India (CJI) D.Y. Chandrachud and Justice P.S. Narasimha, stating that the order would force the company to change the way it marketed its Android platform.

The Counsel appearing for Google contended that CCI passed extraordinary directions in the case, stating that the compliance date was January 19 and Google filed the plea in December.
He said there has been urgency since January 19 was compliance date and that there was no finding on abuse of dominance.

As per Singhvi, the CCI order passed in October 2022, was challenged by the NCLAT on January 4. He said Google filed the appeal in December 2022 and hence, no case for interim relief was made out.
The Tribunal had observed that since it did not show any urgency after the CCI passed the verdict in October last year, interim relief could not be given to Google.
As per the NCLAT order, the appellant did not show any urgency after the CCI passed the verdict in October last year. It observed that had there been any such urgency, the appellant would have approached this tribunal forthwith
However, the Bench of Justice Rakesh Kumar, member (judicial) and Dr Alok Srivastava, member (technical), listed the matter for final hearing on April 3, considering the urgency shown by Google for interim relief and taking into account the voluminous records and long order of the CCI.

NCLAT had further directed Google to deposit 10 percent of the Rs 1337.76 crore fine amount within three weeks.

In October 2022, CCI had imposed the penalty on Google for abusing its dominant position in multiple markets in the Android mobile device ecosystem.

Apart from the monetary penalty, Google was further ceased and desisted from participating in anti-competitive practices and was directed to modify its conduct within a defined timeline. Google challenged the order before the NCLAT.

The Delhi High Court on Tuesday proposed to reduce from Rs 20 lakh to Rs 2 lakh the costs imposed on actor Juhi Chawla and two others by a single judge while dismissing her plea against 5G.

It will consider reducing the cost imposed on Bollywood actor Juhi Chawla for her petition challenging the 5G technology roll-out from Rs 20 lakh to Rs 2 lakh, the Delhi High Court said.

A bench of Justices Vipin Sanghi and Jasmeet Singh said that Chawla’s status can be used for the good of society and therefore, she will have to do some public work which could involve featuring in a programme for the Delhi State Legal Services Authority (DSLSA).

A bench of Justices Vipin Sanghi and Jasmeet Singh issued notice to the DSLSA secretary seeking his response on the appeal and listed the matter for further hearing on January 27.

Chawla’s counsel, Senior Advocate Salman Khurshid, consented to the court’s suggestion which came during the hearing of an appeal by Chawla and the two others against the order dismissing her lawsuit against the 5G roll out. If the cost amount could be waived, they could go back to pursue the cause, Khurshid submitted.

To this, the bench proposed to the counsel that it could reduce the cost amount but this would come with a condition that Chawla would have to do some public work.

While issuing notice to the DSLSA, the bench said it was not inclined to issue notice to other respondents at this stage because of their primary grievance is relating to payment of Rs 20 lakh costs amount to the DSLSA.

Last week, the DSLSA also approached the Delhi High Court seeking execution of the order directing Chawla to deposit the money.

The Delhi High Court has asked the Delhi Government to treat a plea as a representation filed by the Delhi Contract Bus Association seeking exemption from payment of road tax and levy of penalty post-December 2020, in view of the Covid-19 pandemic which has caused severe losses to their business operation. (Delhi Contract Bus Association Vs Honble Lt. Governor & Ors.)

A Single-Judge bench of Justice Sanjeev Sachdeva has asked the counsel appearing for the respondent GNCTD to take a decision preferably within six weeks. 

The court has also said that in case there is a direction of the Government to reopen schools/educational institutions, respondent shall consider issuing appropriate interim directions, pending consideration of the representation.

The counsel for the petitioner submitted that it is an association of commercial bus owners catering primarily to schools, colleges and educational institutions for transportation of students and staff of the said institutions as well as to office-goers of MNCs and industrial establishments.

“In view of the lockdown, closure of schools and work from home culture, petitioners have not been able to ply their buses and the buses are lying stationary. It is, in these circumstances, that petitioners seek exemptions from payment of road taxes and penalty as also refund/ adjustment of the amount already paid by some bus operators,”

-it said. 

The Counsel for the respondent had submitted that a decision has already been taken to grant exemption from payment of penalty till 31.12.2020. He further submitted that in a similar writ petition filed by another association, this Court had directed the petition to be considered as a representation.

Also Read: CBI court discharges Delhi Health Minister’s former OSD in appointment irregularities case

The petitioners were seeking exemption from payment of road tax and levy of penalty even post 31.12.2020 as the schools and educational institutions have not yet been reopened and some of the offices have still not commenced full operations.

Read the order here;