From cell towers to voluntary retirement, here're the key court orders

Bombay High Court
Courts cancel railways' curb on investors


The Calcutta High Court last week, as well as the Orissa High Court earlier, has disapproved of the restrictions imposed by the railways on the companies which had signed agreements under the Wagon Investment Scheme (WIS). The WIS policy stipulated that the investor was supplied a guaranteed number of rakes per month and a freight rebate for 10 years. According to the Railway Board, the investor shall not carry consignments of third parties and the benefit was specific to the firm which signed the agreement. This rule was challenged in the Orissa High Court. It had quashed the Railway Board’s circulars. The board moved the Supreme Court against the Orissa High Court ruling. The Supreme Court rejected the appeal. Now the same issue came up at the Calcutta High Court in the case, Rashmi Metalliks Ltd vs Union of India. The high court asked the railway to follow the Orissa High Court ruling. “When several similarly situated investors under the scheme were allowed permission to carry the consignment of third parties on the strength of the decision of the Orissa High Court, the doctrine of judicial comity and discipline demand that similar benefit should be given to others,” the Calcutta High Court noted. It pointed out that the Supreme Court had observed in several judgments that “every high court must give due deference to the enunciation of law made by another even though it was free to charter a divergent direction.”


Toyota challenge to IT rules rejected


The Karnataka High Court has rejected a challenge to a provision in the Income Tax Act imposing a penalty on amounts determined pursuant to the Convention for Avoidance of Double Taxation between the Government of India and other sovereign countries. Toyota Kirloskar Motor, a subsidiary of Toyota Motor Corporation, Japan, had been challenging the notices of tax authorities with regard to the assessment year 2006-07. The company had agitated the issue before the Transfer Pricing Officer, the Dispute Resolution Panel, the Income Tax Appellate Tribunal and the high court. Meanwhile, the Japanese corporation had invoked the Mutual Agreement Procedure under the India-Japan Double Taxation Avoidance Treaty before the National Tax Agency of Japan and arrived at a settled figure. Yet, the authorities imposed a penalty of Rs 30,89,98,800 in respect of the transfer pricing adjustment on the ground that the company had concealed income within the meaning of Section 271[1][c] of the Act. While rejecting the constitutional challenge to the provision, the high court asked the appellate authority to consider the case of the company on merits.


Fear of cell towers as health hazard


Whether cellphone towers are a health hazard has been debated in several high courts. Some appeals have also been heard in the Supreme Court. Last week, the Madras High Court ruled that "till a positive finding is given in this regard, cellphone towers cannot be prevented to be installed on mere apprehensions”. The high court was dealing with the petition moved by Reliance JioInfocomm alleging that residents in certain areas of Coimbatore city were causing hindrance to the company officials from carrying out the construction work of the tower. It sought police protection to its officials. While granting protection, the high court observed that apprehensions of the residents about the threat of radiation have no scientific backing. It recalled a Bombay High Court judgment, which also took the same stand. Till a positive finding arrived at about the harm, erection of towers and accessories cannot be prevented. It may be recalled that a few years ago, the Rajasthan High Court had prevented the installation of cellphone towers near schools and hospitals. However, the Supreme Court stayed that order.


PSU caught in bona fide mistake


The Bombay High Court last week dismissed five appeals moved by the Central Warehousing Corporation, challenging the award of an arbitrator against it in its dispute with Aqdas Maritime Agency. The latter was functioning as the handling and transport contractor for the government corporation. It deposited service tax with the income tax department. The corporation reimbursed the amount of tax to the contractor. It submitted before the arbitrator that the reimbursement was made due to a “bona fide mistake” and should be returned. The arbitrator held that the corporation, as the service recip­ient, was liable to pay service tax and that according to the contractual clause, the contractor had not taken over the liability to bear service tax. The corporation moved the single judge Bench of the high court and failed to get relief. The Ben­ch held that it was for the arbitrator to interpret the clau­ses in the contract and the court could not do it. The corporation then moved the division Bench, which also dismissed its appeal. 


Disciplinary action stalks retired staff


Voluntary retirement by an employee does not prevent the appointing authority from continuing action for misconduct committed during the currency of the service. The judgment was passed by the Bombay High Court while dismissing a writ petition moved by a retired judicial officer in the case, Padmini Nandkumar vs Registrar General Bombay High Court.  She was selected to preside over the National Highway Tribunal, when she sought voluntary retirement. While accepting her request, the authorities had made it clear that disciplinary proceedings initiated against her while she was in service would continue. The court stated that since she was aware of the condition, she could not argue that the departmental proceedings should be terminated. Her arguments based on the Maharashtra Civil Service Rules were also rejected.


One alphabet can confuse consumers


The Calcutta High Court has allowed the trademark suit of Proline, which deals in speakers and electronic goods with the name ‘Sweton’, and prevented a rival firm from using the mark ‘Sweeton’. The names are deceptively similar with only a difference in alphabet E. “Such addition of an E does not make the mark of the opposite party substantially different from that of Proline, and it is very easy to create confusion in the mind of the customer,” the judgment said. Further, the font and colour of the infringing mark are similar to that of the registered trademark of Proline. “Looking at the mark as a composite whole along with the artistic, visual, phonetic and structural standpoints, it is clear that a layman of average intelligence and imperfect recollection will in all likelihood be confused and may attribute the infringing mark to Proline’s trademark,” the court explained and asserted that it infringed the Trade Mark Act.

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