Vikas Agarwal v. Serious Fraud Investigation Office(SIFO)

Introduction

Trade license is the method to legalize a particular occupation from a specific area. It is managed to safeguard that the citizen is not enviably affected by strength, danger & nuisance by the unsuitable booming of a transaction. The trade license is a revenue to confirm that the way and area in which the business is being approved on is rendering to the relevant rules, standards and safety guidelines. The provision of trade license is laid down by the State government to handle and manage the transaction within a city. This article talks about the case law Vikas Agarwal v. Serious Fraud Investigation Office(SIFO)

According to Companies Act 2013 as per Section 447[1], which includes any suppression of any detail, lapse, turn or exploitation of position dedicated by any individual with the responsibility in any way, with determination to increase excessive benefit from, or to wound its shareholders or the interests of the company or any other individual, whether or not there is any unlawful advantage or unlawful damage. An unlawful damage means the damage by illegal means of property to which the individual losing is legally allowed whereas an unlawful advantage means the improvement by illegal means of stuff to which the individual advantage is not lawfully permitted.

When a situation has already been given to the SFIO no other activity of the administration has the expert to proceed to investigate an offence which is faithful under this Act and the same is to be given to the SFIO. The business and its majors and workers, who are or have been in the engagement of the business, shall be accountable to provide all information, explanation, documents and help to the investigating officer as he may require for the conduct of the investigation.

The Act uses the term “person” which has not only extended the applicability of it to the directors, officers, employees but any other person who is into the affairs of a company. Under any other person, it includes consultants, advisors, auditors, independent directors or any key managerial person can be held liable if the said acts are done within their knowledge.

Issue

The issue raised in the case Vikas Agarwal v. Serious Fraud Investigation Office(SIFO) is that: whether this consignment of requests and writ petitions raise the inquiry – whether the transfer of an Import License called R.E.P. Licence/Exim Scrip by the container thereof to additional individuals establishes: an auction of goods within the connotation of and for the reasons of the Sales Tax representations of Tamil Nadu, Karnataka and Kerala.

Contentions of the Petitioner

In the Above-mentioned case of Vikas Agarwal v. SFIO[2] case the scholarly experienced senior advocate on behalf of the petitioner submits that with an opinion to preserve expensive overseas, trade and to transfer the State’s; financial on anticipated appearances, the Central Legislature enacted the Imports and Exports Control Act in 1994. The Section 3 empowers the Central Government to make laws by order available in the official newspaper for segregation, confining or otherwise governing the import into and export of the goods from the nation.

The petitioner files the case Vikas Agarwal v. Serious Fraud Investigation Office(SIFO), challenging the transfer of goods within the connotation of and for the reasons of the Sales Tax representations. They also contended that Joseph Vellapally, vaidyananthan and KM Mohan, is that these permissions are not properties; they are not possessions; they characterize merely a consent to import goods, which consent can be cancelled at any time the licencing consultant; they are actually in the nature of stocks safeties which have been specifically omitted from the meaning of goods in the relevant portrayals.

Contentions of the Respondent

The latest submission commended by Sri Ganguly, scholarly advocate for the State of Tamil Nadu depends on upon the nonconforming judgement of S.R. Das. J. in Chiranjitlal Chowdhary v. Union of India, [1950][3] which is mentioned under Page No. 920-922, where the academic Judge distributed with the connotation of the term property in Article 19(l)(f) and Article 31 of the Constitution. Haying affection to the situation in which the said inquiry; had ascended, we do not ponder it essential to denote to the comment trusted upon since: the factual mentioned to by us on the connotation of the appearance movable property and the decision by Judge Anraj is more to the opinion.

Judgement

A Bench of three Judges in Vikas Sales Corporation and another vs. Commissioner of Commercial Taxes and another, (1996) 4 SCC 433, agreed with the verdict of H Anaraj necessitating reference before the Constitution Bench in Sunrise Associates, the Constitution Bench noticed the issue which arose before the Constitution Bench. In paragraph 29 it observed that the only issue we are called upon to respond to is whatever the conclusion in H Anaraj that lottery permits are properties for the reasons of Article 366(29A) (a)[4] of the Constitution and the State auctions tax rules was accurate. The Constitution Bench in paragraph 33 practiced that to the sum of money that the lottery ticket established the right to have the gift, it was not properties but a criminal privilege and therefore not properties under the sales tax rules.

The well averted Judge measured the description of goods in Section 2(m) of the Karnataka Act and held subsequent Anraj that having admiration to the nature and atmosphere of the said licences and their permitted negotiating they create belongings the sale whereof is subject sales tax.

The learned judge forbade the dispute that the said authority is in the nature of legal right. He held the import licence not solely allows an individual the right of indulging in a commercial of trading in goods but it also eliminates rivalry. Therefore, it cannot be thought that it is individually a valuable curiosity with regards of a transferable property not in ownership of the individual but is itself a respected right which giving to the petitioners themselves is freely moveable the importation, licence therefore must be conserved as produce for the determinations of the Act and clearly reductions within the explanation of assets.

The learned Judge further held that the liberty under this licence is in fact, more accurate and. more valuable than the right under a lottery ticket considered in Anraj. On application, a Division Bench of the Karnataka High Court declared the judgment of the learned Single Judge. Firstly, it is not produced to our notice that any claim has been made by the Central Government to the effect that these licence/scripts are for protection. Secondly, any such expression can only be for the time interval following the evolving into power of the related Amendment Act. i.e., following January 30, 1992.All the matters before us concern the time period earlier to the Said date. In this aspect of the material, it is not required to attempt this argument further.

For the above analyses, all the questions and writ appeals fail and are removed herewith. No costs.

Analysis

The analysis of the judgement of the case of Vikas that the presentation to the consequence that the obtaining is completely not for resale and hence, the public bank would not be accountable for tax does not praise adoption, for legal purpose does not anticipate or state down that Section 4(6)(iii) would put on to bought for the reason of only reselling but has left the look indefinite and unreserved; that there is no justification to confine it to reselling and boundary the look; that Section 4(6)(iii) uses the term purpose meaning a procurement for any reason other than those detailed in clauses (i) and (ii) of Section 4(6) would be adequate to captivate the rule and in the case at hand, RBI’s letter dated March 18, 1992 the purpose was to onward the scripts to the Combined Chief Supervisor of Importations and Exportations, from Central Government of India, after suitably abandoning them; that use of the bought scrips by way of termination and onward broadcast to the Joint Chief Controller was obviously succeeding to achievement of the businesses and such use cannot keep the dealings out of the harm and horizon of Section 4(6)(iii); that the businesses were really renunciations and not buying is indefensible because surrender is also foreseen by process of legal and hence, the notion of surrender is irrelevant in the instantaneous case; and that there was enough proposition of auction and purchase and transmission of property in the scrips as is apparent from documents that the container of cursive was encashing them by entirely preceding his powers under it.

The Supreme Court also interpreted property in the comprehensive relations I have come across so far. Before I analyse the verdict, certain definitions to help understand this post better:

According to The Sale of Goods Act, 1930 defines goods to define every kind of movable belongings other than tortious entitlements among other belongings.  The Sale of Goods Act, 1930 mentions property to state that the all-purpose assets in goods, and not just a different property. The Basic Clauses defines the term movable property very destructively to state property of every explanation except immovable property. Further, the General Clauses, 1897 defines the term immovable property to have land-living, assistance to rise out of land-living and things involved to the earth or permanently clipped to anything involved to the earth.

Actionable entitlements are defined in Section 3 of the Transfer of Property Act to nasty a prerogative to any liability, other than a obligation available by advance of immovable property or by a simple guess or initiate of movable property, or to any helpful interest in transferable property not in the ownership, either real or productive, of the applicant, which the Civil Courts guess as have enough ready lands for release, whether such debt or advantageous notice be current, accumulating, provisional or reliant. The question that the Court was faced with was if transfer of an Import Licence/Exam Scrip by its possessor to another individual founded the sale of a goods for the reason of charging sales tax on the business.

The assessee in the case took the view that a bought license was neither a “good” within the sense of sales tax laws nor assets own, but was solely an unlawful claim which was omitted from the description of goods in the Sale of Goods Law. According to the assessee, Property is a bunch of civil liberties but every element in that bunch does not by the situation contain property. Subsequently, the assessee contended that sales tax did not smear transmission of a significance licence. The contentions of the assessee’s were forbidden by this Court. The Court mentioned to the explanation of goods and sale in both the above-mentioned representations, the characterization of goods in Article 366(12) and the definition of levy on the auction or obtaining of goods in Article 366(29A).

It mentions about the meaning of the expression lottery ticket in law lexicons and decided belongings; it discussed about the explanation of movable property in the General Clauses Act, and the explanation of the countenance criminal entitlements in Section 3 of the Transfer of Property Act and experiential.

The Entry 54 in the List-II of the Seventh Schedule of the Constitution of India authorizes the State Legislatures to make rules with admiration to duties on the rummage sale or obtaining of possessions other than newspapers theme to the rules of Entry 92 List-I, Entry 92-A of List-I, expresses of taxes on the auction or obtaining of properties other than newspapers, were such sale or obtaining lakes place in the course of inter-State trade or business. The intangible right like patent or an immaterial object like light energy can be viewed as goods qualified to sales tax there is no motive why the privilege to right to a take part in an enticement which is advantageous notice in movable possessions of disembodied attractiveness should not be termed as goods for the determination of collecting the sales tax. As mentioned, directly above lottery tickets comprises the privilege to find a stock-in-occupation of every trader and therefore is produced which can be accepted and vended in the market. Lottery tickets encompassing such right, therefore, would fall within the description of properties given in the Tamil Nadu Act and the Bengal Act.

When these licences are being authorised and traded spontaneously in the market as properties and when then have a worth of their own discrete to the properties which can be transferred thereunder, it is indolent to struggle that they are in the nature of criminal entitlements. Certainly, in Anraj, the foremost argument of the petitioners was that a lottery voucher was in the nature of a legal right.

The said reasoning was forbidden after an extravagant conversation of law on the topic. We, decide with the said result and on that foundation hold that the Licences/Exim Scrips are not on the basis of actionable entitlements.

Conclusion

From a scrutiny of the laws and cases discussed above, it could be inferred that there is no particular law or principle regarding the copyright negotiation in India. The Administration and the Supreme Court has not specified any sort of answer to the query of Arbitrability of Copyright Disputes.

For the concluding the Judgement of Vikas Sales Corporation v Commissioner of Commercial Taxes AIR 1996 SC 2082, the Court set up that case as the precedent in the case of Yasha Overseas v. Commissioner of Sales Tax (2008)[5]. The Issue in that case is whether the verdict in Vikas case can be said to be implied to exercise authority by the Constitution Bench conclusion in Sunrise Authorizes?  If it was a no, whether Vikas case is still a good rule and put on to belongings of DEPB?

S.C. apprehended that it was undeniably true that the Constitution Bench in the Sunrise Associates case did not accept the decision in Vikas Sales Corporation’s case insofar as it gave their free ability to transfer as an extra motive to embrace that REP licences were not legal entitlements but properties so called appropriately. But there this issue did not come for the situation and hence no conclusion was agreed on this matter. The decision in Vikas sales still embraces good and is appropriate to DEPB as well. This decision sets up a precedent as well.

References:

[1] The Companies Act 2013, s. 447.

[2] Vikas Agarwal vs Serious Fraud Investigation … on 6 February, 2019, CRL.M.C. 647/2019.

[3] Chiranjit Lal Chowdhuri vs The Union Of India And Others, 1951 AIR 41.

[4] The Constitution of India, 1949, Article 366(29A)(a).

[5] Yasha Overseas v. Commissioner of Sales Tax, Appeal (civil)  2155 of 2000.