TaxTMI 
TaxTMI 
2015 (8) TMI 1110
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....factory by the Cashew Corporation of India are not being processed in the factory to which allotment has been made or that such nuts are being transferred to any other cashew factory; or (c) that there has been large scale unemployment, other than by way of lay off or retrenchment, of the workers of a cashew factory by order published in the Gazette declare that the cashew factory shall stand transferred to, and vest in the Government. Provided that before making a declaration under this sub-section in respect of a cashew factory, the Government shall give the occupier of the factory and the owner of the factory where he is not the occupier, a notice of their intention to take action under this sub-section and the grounds therefore and consider the objections that may be preferred in pursuance of such notice. Explanation.- For the purposes of this sub-section, the expressions "lay off" and "retrenchment" shall have the meanings respectively assigned to them in the Industrial Disputes Act, 1947 (Central Act 14 of 1947). (2) The notice referred to in the proviso to sub-section (1) shall also be published in two newspapers published in the State of Kerala, and such publica....
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....d period or no persons appears on the said date it will be presumed that there are no objections against the proposed action and further steps will be taken. All concerned are further informed that Shri N. Gopalan Nair, Additional Director of Industries and Commerce and Special Officer for Cashew Societies, Vikas Bhavan, Thiruvananthapuram has been authorized to prepare an inventory of all properties of the cashew factories mentioned above under section 5(1) of the Act. They are also informed that commissions of any act by any person which will diminish the value of the properties and assets of the cashew factory or the removal of any property or assets from the premises of the factory is punishable under section 13 of the Act. GROUNDS It has been reported by the Authorized officer that your factory is lying closed and that there is no possibility of its starting functioning within a period of ten days or in the immediate future. The Government are therefore, of opinion that the said situation will lead to large scale unemployment of the workers of the Cashew Factory. By Order of the Governor Place: Thiruvananthapuram M. Vijayanunni Dated: 16.9.1....
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....he factories was lying closed. We are not able to appreciate as to how by a common notice all the 36 cashew factories could be summoned to show cause without giving particulars of conditions existing in different factories. The learned counsel, who appeared on behalf of the State, could not point out, as to how different occupiers or the owners of the factories could have filed objections to such common notice which did not refer to any conditions pertaining to their factories. 9. There is no dispute that the cashew nut factories do not work throughout the year but work for varying periods depending upon the supply of raw nuts etc. As such the particulars of the alleged closure of each of the factories were required to be furnished to the individual owner to meet the case against him. The object of the Act is to safeguard the interests of the workers in the cashew factories and it is to safeguard their interests that the power has been vested in the State Government to issue orders for the transfer of the factories. The transfer or vesting of the factories has to be in accordance with the procedure prescribed in the Act. As already pointed out above, the proviso to sub-section (....
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.... of the relevant material, that any of the three conditions mentioned therein exists in individual factories, by following the procedure prescribed therein. 13. In order to work out the equities and the rights and liabilities which have arisen between the date of the transfer of the factories and passing of this order, we direct: (i) The possession of the factories shall be handed over to the respective owners within two weeks from the date of this order. As and when possession is given, an inventory of all the materials shall be made. (ii) The daily workers other than the members of the staff engaged by the Kerala State Cashew Development Corporation Ltd., or the State Government, as the case may be, shall be retained by the factory owners and shall not be retrenched except in accordance with law. So far as the members of the staff are concerned, it shall not be the obligation of the factory owners to retain them, in view of the interim order passed by this Court on 19-7- 1988. (iii) The petitioners shall pay the same salary and emoluments which were being paid by the State Government while the factories were with the State Government. (iv) Any claim for compensatio....
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....e respondents. Specific attention was drawn by the petitioner on 1.4.1995 for compliance with the order but, apparently, compliance was kept delayed because change of law was contemplated which ultimately fructified by an Ordinance on 16.8.1995. Though it would have been desirable for the respondents to carry out the order of this court, their taking shelter in the contemplated Ordinance is not totally out of place. They are guilty, though, of contempt for non-compliance for a small period. Holding so, we accept their apology as tendered in the affidavits filed in response. The contempt proceedings are, thus, terminated." 6. The promised Ordinance was then brought in which became the Kerala Cashew Factories Acquisition (Amendment) Act of 16.8.1995. This Act was brought into force with effect from 1.5.1984 so as to cover all 46 acquisitions that had been made under the Principal Act. This Act is a short Act of six Sections and a Schedule. We are concerned with Section 3A and Section 6 which are set out hereinbelow: "3A. Power to acquire any cashew factory in public interest. (1) Notwithstanding anything contained in section 3, if the Government are satisfied, in relation....
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....pal, learned counsel appearing on behalf of the some of the petitioners raised three points before us. He argued that first and foremost Section 6 of the Amendment Act is bad as it seeks to directly nullify the judgments of this Hon'ble Court dated 12.5.1994 and 10.3.1995 without changing the basis of the law. For this proposition he cited several judgments including State of T.N. v. M. Rayappa Gounder (1971) 3 SCC 1, Madan Mohan Pathak & Anr. v. Union of India & Ors. 1978 (2) SCC 50, Virender Singh Hooda & Ors. v. State of Haryana & Anr. 2004 (12) SCC 588 and State of Tamil Nadu v. State of Kerala & Anr. 2014 (6) SCALE 380. His second point was that considering that all the notices served were in identical terms, and considering that the objects and reasons of the 1995 Amendment Act placed all 46 factories at par, Section 6 of the Act violated Article 14 inasmuch as it discriminated between the 10 factories which were sought to be taken over and the 36 factories which were not sought to be taken over by the Amendment Act. The third point he argued before us was that in any case Section 6 of the Amendment Act read with Section 9 of the original Act was an independent stand alon....
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....ould bar any challenge to the compensation provision that is Section 9 of the main Act. Section 6 merely refers to Section 9 and, therefore, legislation is not by incorporation but by reference. 11. Having heard learned counsel for both parties, we think Mr. Venugopal is on firm ground on both points 1 and 2 argued by him. We do not feel it necessary to enter upon a discussion on point 3 inasmuch as the Civil Appeals before us have to be allowed on points 1 and 2. 12. Point 1. It is settled law by a catena of decisions of this Court that the legislature cannot directly annul a judgment of a court. The legislative function consists in "making" law [see: Article 245 of the Constitution] and not in "declaring" what the law shall be [see: Article 141 of the Constitution]. If the legislature were at liberty to annul judgments of courts, the ghost of bills of attainder will revisit us to enable legislatures to pass legislative judgments on matters which are inter- parties. Interestingly, in England, the last such bill of attainder passing a legislative judgment against a man called Fenwick was passed as far back as in 1696. A century later, the US Constitution expressly outlawed....
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....be and to have been always validly assessed or reassessed or collected and accordingly- (a) all acts, proceedings or things done or taken by the State Government or by any officer of the State Government or by any other authority in connection with the assessment or reassessment or collection of such tax, shall, for all purposes, be deemed to be and to have always been done or taken in accordance with law; (b) no suit or other proceeding shall be maintained or continued in any court against the State Government or any person or authority whatsoever for the refund of any tax so paid; and (c) no Court shall enforce any decree or order directing the refund of any tax so paid." 4. The reassessments with which we are concerned in these cases were made prior to the coming into force of the Act. Therefore all that we have to see is whether those reassessments are validly protected by Section 7. The High Court of Madras allowed the writ petitions and quashed the reassessments on the ground that the power to reassess under Section 7(B) introduced by the Act is incomplete and not exercisable in the absence of prescription as to limitation contemplated by the section and hence Sec....
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....the case clearly arbitrary and unreasonable. The defect or lacuna is not even sought to be remedied and the only justification for the steep rise in the rate of duty by the amended provision is to nullify the effect of the binding judgment. The vice of illegal collection in the absence of the removal of the illegality which led to the invalidation of the earlier assessments on the basis of illegal levy, continues to taint the earlier levy. In our opinion, this is not a proper ground for imposing the levy at the higher rate with retrospective effect. It may be open to the Legislature to impose the levy at the higher rate with prospective operation but levy of taxation at higher rate which really amounts to imposition of tax with retrospective operation has to be justified on proper and cogent grounds. This aspect of the matter does not appear to have been properly considered by the High Court and the High Court in our view was not right in holding that "by the enactment of Section 2 of the impugned Act the very basis of the complaint made by the petitioner before this Court in the earlier writ petition as also the basis of the decision of this Court in Cawasji's case that the St....
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....orise the Assistant Collector of first grade to decide the claims to be made before him claiming certain lands or immovable properties as 'shamilatdeh' vesting in Panchayats ignoring the judicial orders or decrees, by which any right, title or interest of private parties in such lands or immovable properties are recognised, are unconstitutional, requires to be upheld. Consequently, the provisions of the Amendment Act of 1981, insofar as they are intended to operate retrospectively for nullifying the adjudications made by civil courts prior to that Amendment Act, are invalid, inoperative and unconstitutional. However, the provisions in the Amendment Act of 1981, can undoubtedly operate prospectively for adjudicating upon claims to 'shamilatdeh' in proceedings initiated subsequent to the commencement of that Act, if they do not, in any way, disturb the finality of adjudications made earlier." Equally, in Re Cauvery Water Disputes Tribunal, 1993 Supp (1) SCC 96, this Court after referring to two earlier judgments stated: "76. The principle which emerges from these authorities is that the legislature can change the basis on which a decision is given by the Court and ....
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....ovisions of this Act." 18. A mere look at sub-section (2) of Section 11 shows that the respondent State of Karnataka, which was a party to the decision of the Division Bench of the High Court against it had tried to get out of the binding effect of the decision by resorting to its legislative power. The judgments, decrees and orders of any court or the competent authority which had become final against the State were sought to be done away with by enacting the impugned provisions of sub-section (2) of Section 11. Such an attempt cannot be said to be a permissible legislative exercise. Section 11(2), therefore, must be held to be an attempt on the part of the State Legislature to legislatively overrule binding decisions of competent courts against the State. It is no doubt true that if any decision was rendered against the State of Karnataka which was pending in appeal and had not become final it could rely upon the relevant provisions of the Act which were given retrospective effect by sub- section (2) of Section 1 of the Act for whatever such reliance was worth. But when such a decision had become final as in the present case when the High Court clearly directed respondent-Stat....
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....ory and that judgment has become final. 16. The Validating Act provides that, notwithstanding anything contained in Sections 4 to 7 of the 1959 Act or in any judgment, decree, order or direction of any court, the villages of Raipura and Ummedganj should be deemed always to have continued to exist and they continue to exist within the limits of the Kota Municipality, to all intents and for all purposes. This provision requires the deeming of the legal position that the villages of Raipura and Ummedganj fall within the limits of the Kota Municipality, not the deeming of facts from which this legal consequence would flow. A legal consequence cannot be deemed nor, therefrom, can the events that should have preceded it. Facts may be deemed and, therefrom, the legal consequences that follow. 17. Sections 4 to 7 remained on the statute book unamended when the Validating Act was passed. Their provisions were mandatory. They had admittedly not been followed. The defect of not following these mandatory provisions in the case of the villages of Raipura and Ummedganj was not cured by the Validating Act. The curing of the defect was an essential requirement for the passing of a valid vali....
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....held the validity of the Kerala Cashew Factories (Acquisition) Act, 1974 however the Court declared certain notifications issued by the Government under Section 5(1) of the aforesaid Act as null and void. Based on the above decision of the Supreme Court, the Kerala High Court disposed of certain petitions pending in the High Court against acquisition under the said Act and directed the Government to hand over the factories to the original owners. 3. The main ground for quashing the notifications was that the Government had not given proper notice as required under section 3 of the Act and that the parties were not given sufficient opportunity of being heard before final orders were passed by the Government. 4. These factories are now under the management of the Cashew Development Corporation and also CAPEX. In case the factories are to be handed over to the petitioners in the OP's as stipulated by the Court, the above mentioned institutions and Government will suffer financially, amounting to crores of rupees. 5. If the cashew factories are handed over to its previous owners based on the directions of the Court, owners may not be in a position to start work in the near....