7 October 2024 - Legal Updates

1. Section 398 CrPC | Suspension of Sentence Can’t Be Denied Merely Because Another Trial Is Pending Against Accused: Supreme Court

The Supreme Court observed that a pendency of trial against the accused in one case cannot be a ground to deny him the benefit of a suspension of sentence.

The bench comprising Justices Dipankar Datta and Prashant Kumar Mishra granted a relief to the accused who were convicted in a murder case but denied the benefit of the suspension of sentence by the High Court.

The accused demanded parity with other co-accused who were granted the benefit of suspension of sentence. The plea for suspension of the sentence of one of the accused was opposed by the State on the ground that a trial in another criminal case was pending against him.

However, it was contended by the accused/appellant that mere pendency of the trial should not stand in the way of this court considering the prayer of the appellant Narendra Singh for suspension of sentence.

That apart, mere pendency of the other trial where the appellant-Narendra Singh is an accused (on bail) cannot be regarded as sufficient for denying him the benefit of suspension of sentence in this case. After all, he is presumed to be innocent till found guilty, the court observed.

“Bearing in mind the above factors, we are of the view that the appellants have made out sufficient ground for suspension of sentence and release on bail upon such terms and conditions to be imposed by the sessions court,” the court added.

The appeal was allowed.

Case- Jitendra & Ors. Vs. State of Uttar Pradesh

2. Specific Relief Act | Supreme Court Allows Oral Hearing Of Review Petition Judgment Holding 2018 Amendment To Be Prospective

A three-judge bench of the Supreme Court, by 2:1 majority, agreed to hear in open court a review petition filed against a 2022 judgment which held that the 2018 amendment to the Specific Relief Act, 1963 will apply only prospectively to transactions effected after the date when the amendment came into force.

The original judgment was rendered by a three judge bench comprising the Chief Justice of India NV Ramana, Justices Krishna Murari and Hima Kohli in Katta Sujatha Reddy vs. Siddamsetty Infra Projects PVT. Ltd. 2022.

On August 31, 2023, the review petition filed against the judgment was listed in chambers before a bench of CJI DY Chandrachud, Justice PS Narasimha and Justice Hima Kohli.

While CJI Chandrachud allowed the oral hearing of the review petition, Justice Hima Kohli (who was part of the original judgment) disagreed with the CJI. Justice Kohli held that there was no case for review and dismissed it. "With respectful regards, I regret my inability to concur with the order passed by the Hon. Chief Justice of India for listing the Review Petitions for open court hearing and notice returnable," Justice Kohli observed.

Justice Narasimha recused from the matter.

In view of the split, the matter was then placed before Justice Manoj Misra.

In the order passed on September 26 (uploaded on October 4), Justice Misra agreed with the view of CJI Chandrachud and held that an open hearing of the review petition was necessary. "Upon consideration of the materials on record, I am also of the view that delay in filing the review petition be condoned and the oral hearing of the review petition be allowed. Therefore, the delay in filing the review petition is condoned. Prayer for oral hearing of the review petition in open Court is allowed," Justice Misra observed.

Accordingly, notice was issued, returnable on October 14.

The 2018 amendment, among other things, made it mandatory for Courts to grant the relief of specific performance of contract, unless the case fell within the specified exceptions. Prior to 2018, specific performance was a discretionary remedy.

In the 2022 judgment, the Supreme Court took the view that the 2018 amendment was not merely procedural, as it created substantive rights, and hence, it cannot be given retrospective effect.

Case- M/S Siddamsetty Infra Projects Pvt. Ltd. vs. Katta Sujatha Reddy & Ors.

3. Recovery By Department During Pendency of Investigation In The Name of ‘Self-Ascertainment of Tax’ U/S 74 CGST Act is Violative To Article 265: Karnataka High Court

The Karnataka High Court held that voluntary determination by the assessee himself as regards the liability of tax, is sine qua non for ‘self-ascertainment of tax’ under CGST Act.

The High Court therefore clarified that when notice sought to be issued u/s 74(1) indicate a fresh and complete adjudication and does not refer to short fail of actual tax required to be paid as contemplated u/s 74(7), the state itself is estopped from connecting that there was self-ascertainment by the assessee.

Single Bench of Justice Sunil Dutt Yadav observed that “if the Authority was of the view that petitioner had made payments as a part of the process of self-ascertainment u/s 74(5) of the CGST Act, the proceedings would terminate”.

“If the Authorities were of the view that the self-ascertainment and the amount paid u/s 74(5) would fall short of the amount actually payable, the Authority could in terms of Section 74(7) proceed to issue a notice as provided for u/s 74(1) in respect of such amount which falls short of the amount actually payable”, added the Bench.

Facts of the case:

During investigation of the firm Raj Chemicals, the statements of one of its partner Vijay Kumar Gupta was recorded u/s 70 of CGST Act, in which he referred to supplies made by the firm to entities including that of the petitioner/ assessee related to invoices raised without actual supply of goods. Upon analysis of e-way bills & the Fastag data, the respondent/ Department found that the vehicles had not moved. This resulted in investigation and even before issuance of show cause notice, forcible recovery was made and it was sought to pass it off as voluntary payments as per prescribed procedure prescribed. The petitioner therefore sought for refund of the amounts paid under duress, and contended that self-ascertainment of tax was not established and the recovery made during investigation was in violation of legal mandate of Article 265 of the Constitution.

The petitioner therefore approached the High Court challenging the legality of investigation carried out u/s 67 of CGST Act and sought for declaration that the recoveries to the tune of Rs.2.50 crores 'extracted coercively' in Form GST PMT–06 Payment Challan. The petitioner also contended that recovery at the office of respondent, pending investigation, while responding to the summons u/s 70 of CGST Act, was an abuse of power.

Observations of the High Court:

The Bench noted that the assessee has an opportunity even before the service of notice u/s 74(1) based on 'his own ascertainment of such tax or the tax as ascertained by the proper officer', make payment and inform the proper officer in writing regarding such payment as envisaged u/s 74(5).

The Bench referred to Section 74(8) of CGST Act, to observe that once the person chargeable with tax pays tax, interest, and penalty, then all proceedings in respect of the said notice shall be deemed to be concluded.

Referring to the payments made by the petitioner of one crore and further amount of one & half crore, as well as the 'DRC-03 declaration', the Bench stated that such is not self-ascertainment of tax.

The Bench also referred to the summary of show cause notice, to found that the State itself has not accepted the self-ascertainment.

Thus, the Bench stated that the recovery made pending adjudication could be construed as 'recovery' contrary to Article 265 of the Constitution of India.

Hence, the High Court directed the Department to refund the amount of Rs.2.50 crores along with interest, which was alleged to be recovered by the Department in the garb of 'self-ascertainment' and partly allowed the Assessee's petition.

Case- Kesar Colour Chem Industries vs. Intelligence officer