TaxTMI 
TaxTMI 
TaxTMI 
2008 (4) TMI 298
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....Rules, 1977 (hereinafter referred to as "the Rules") are involved in these cases. 2. W. A. Nos. 218 of 2003 and 1098 of 2003 arise out of O.P.No.16488 of 1998. The Original Petition was filed by Godrej/GE Appliances Limited, first respondent in the Writ Appeals. These Writ Appeals are being dealt with at first so that the decision herein can be followed, to the extent possible, in other cases. 3. O. P. No.16488 of 1998 was filed for the following reliefs: "(a) for an order and declaration of this Hon'ble Court that the provisions of Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and the Standards of Weights and Measures (Enforcement) Act, 1985 do not apply to the products manufactured and marketed by the petitioner; (b) for an order and declaration of this Hon'ble Court that Section 33 of the Standards of Weights and Measures (Enforcement) Act, 1985 is ultra vires the Constitution of India and is void and liable to be struck down; (c) for a writ of certiorari, or a writ in the nature of certiorari, or any other appropriate writ, order or direction of this Hon'ble Court calling for the records of the case....
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.... provisions therein are applicable only in respect of the trade or commerce by weight, measure or number. A stereo set or a refrigerator is not sold in weight or by measure or by number. It will be sold only in single number. There is no case before me by the respondents that such equipments or devices are sold in packets containing more than one. ...... As already mentioned above, these equipments are sold, with freedom for the customer to inspect and satisfy regarding its appearance and functioning. Therefore it cannot be taken that it is a commodity sold in package. Nobody is purchasing equipments like refrigerator or devices like Television sets, stereo sets etc., in packed form. Any purchaser will first get satisfied of its appearance and functioning. Then alone one will buy such articles. Therefore on any count it cannot be taken that such equipment or devices are packaged commodity to come under the definition in Sec. 2(b) of the 1976 Act. 9. When those are not packaged commodities, restrictions contained in Sec.39 of 1976 Act cannot be made applicable to such commodities. Naturally, there cannot be any violation to be proceeded against the petitioners including by prosecu....
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....shall, - (a) make, manufacture, pack, sell, or cause to be packed or sold; or (b) distribute, deliver, or cause to be distributed or delivered; or (c) offer, expose or possess for sale, any commodity in packaged form to which this Part applies unless such package bears thereon or on a label securely attached thereto a definite, plain and conspicuous declaration, made in the prescribed manner, of - (i) the identity of the commodity in the package; (ii) the net quantity, in terms of the standard unit of weight or measure, of the commodity in the package; (iii) where the commodity is packaged or sold by number, the accurate number of the commodity contained in the package; (iv) the unit sale price of the commodity in the package; and (v) the sale price of the package. Explanation:- In this sub-section, the expression "unit sale price" means the price according to such unit or weight, measure or number as may be prescribed. (2) Every package to which this Part applies shall bear thereon the name of the manufacturer and also of the packer or distributor. (3) Where the package of a commodity to which this Part applies or the label thereon bears a representation as to the num....
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.... printed on the packages the words Maximum or Max, retail prices ... inclusive of all taxes or in the form MRP Rs.... inclusive of all taxes. Explanation:- For the purpose of the clause "maximum price" in relation to any commodity in packaged form shall include all taxes local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be;" Chapter II of the Rules relates to "Provisions applicable to packages intended for retail sale". Rule 3 provides that the provisions of Chapter II shall apply to packages intended for retail sale and the expression "package", wherever it occurs in the said Chapter shall be construed accordingly. Rule 4 stipulates that on and from the commencement of the Rules, no person shall pre-pack, or cause or permit to be pre-packed any commodity for sale, distribution or delivery unless the package in which the commodity is pre-packed bears thereon, or on a label securely affixed thereto, such declarations as are required to be made under the rules. Rule 6 provides that every package shall bear thereon or on a label securely affixed thereto, a ....
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.... sub-rule. (4) Where, after any commodity has been pre-packed, for sale, any tax payable in relation to such commodity is revised, the retail dealer or any other person shall not make any retail sale of such commodity at a price exceeding the revised retail sale price, communicated to him by the manufacturer, or where the manufacturer is not the packer, the packer and it shall be the duty of the manufacturer or packer as the case may be, to indicate by not less than two advertisements in one or more newspapers and also by circulation of notices to the dealers and to the Director in the Central Government and Controllers of Legal Metrology in the States and Union Territories, the revised prices of such packages but the difference between the price marked, on the package and the revised price shall not, in any case, be higher than the extent of increase in the tax or in the case of imposition of fresh tax higher than the fresh tax so imposed: Provided that publication in any newspaper, of such revised price shall not be necessary where such revision is due to any increase in, or in imposition of, any tax payable under any law made by the State Legislatures: Provided further that t....
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....r made under, this Act subject to the modification that any reference therein to the "Central Government", "Standards Act" and the "Director" shall be construed as references respectively, to the "State Government", "this Act" and the "Controller". (2) The State Government may make rules, not inconsistent with the Standards Act or any rule made thereunder, to regulate the packaging of any commodity intended to be sold or distributed, within the State in packaged form, or to regulate the sale or distribution, within the State, of any commodity in packaged form. Explanation:- For the purposes of this section, "commodity in packaged form" shall have the meaning assigned to it in the Standards Act and shall include a pre-packed commodity." Section 51 of the Enforcement Act provides for penalty for contravention of Section 33. 9. W.A.No.218 of 2003 is filed by respondents 1 and 2 in the Original Petition No. 16488 of 1998 while W.A.No.1098 of 2003 is filed by respondents 3 and 4. Sri. P. Parameswaran Nair, learned Assistant Solicitor General of India and the learned Government Pleader appearing for the appellants submitted that the finding of the learned single Judge that a stereo s....
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....t dismissed the appeal filed by the manufacturer against the decision of the National Commission. The Supreme Court in that context dealt with the provisions of the Consumer Protection Act, 1986 and the Standards Act and Rules framed thereunder and held as follows: "4. The Consumer Protection Act, 1986 has been enacted to provide for better protection of the interests of the consumers by making provisions for the establishment of consumer councils, other authorities for the settlement of consumer disputes and for matters connected therewith. The Act was enacted as a result of widespread consumer protection movement. On the basis of the report of the Secretary General on Consumer Protection dated 27-5-1983, the United Nations Economic and Social Council recommended that the world Governments should develop, strengthen and implement a coherent consumer protection policy taking into consideration the guidelines set out therein. Each Government was obliged to set its own priorities for the protection of consumers in accordance with the economic and social conditions of the country keeping in view the needs of its people and bearing in mind the costs and benefit of the proposed legisla....
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....ged form, but have to be allowed to be handled and inspected and even worn by the customer before sale. The Bombay High Court accepted the contention of the manufacturer and held, after referring Section 2(b) of the Standards Act and Rule 2(l) of the Rules, thus: ".. From a reading of the Rule, what emerges is that the pre-packed commodity must be placed in a package of whatever nature without the purchaser being present. The product in the package must have a pre-determined value, which value cannot be altered without the package or its lid or cap, as the case may be, being opened or the product undergoing a perceptible modification. In other words on the package being opened or its lid or cap being opened, the pre-determined value of the commodity must stand altered or undergo a perceptible modification. These two requirements, therefore, have to be met, for it to be a pre-packed commodity and the expression package is to be construed as a package containing pre-packed commodity. In other words the stress is on the package containing the pre-packed commodity. ...... A proper reading or consideration, can only mean those commodities which intrinsically require to be packed and w....
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....y number as per Sixth Schedule, if the number is less than ten a declaration shall be made by integral number. A vacuum cleaner is sold as a single piece and when the customer visits the office of the petitioner it is not in a pre-packed commodity nor can it be packed, be deemed as commodity in packed form. Therefore, Rule 13(5) of the Rules and the Sixth Schedule have no application. Even otherwise, as one piece is sold, I fail to understand how it can be expressed by integral number of one. This is a strong circumstance to show that when a vacuum cleaner is sold as single piece without any package, the Act and the Rules have no application." 14. With respect, we find ourselves unable to agree with the view taken by the Bombay High Court and the Andhra Pradesh High Court. The view taken by the Bombay High Court that, if the intention of the Legislature or the Rule making Authority was to include every commodity which was packed, such a provision could have been made in the Rules, does not appear to us to be a correct view. The question is whether the commodity in question satisfy the definition of "commodity in packaged form" in Section 2(b) of the Standards Act and the definitio....
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....oes not cease to be a packaged commodity. The thrust is on the quantity of the product which has a pre-determined value being placed in a package without the presence of the purchaser. The purchaser should be told as to the nature of the content in the package and that is achieved by the declaration under Rule 6 bearing on the package or on a label securely affixed thereto. By seeing the label and declaration therein, the consumer must be in a position to ascertain whether he should purchase it. All the necessary specifications and the value of the commodity should be made known to the consumer. 16. Rule 13(5) of the Rules reads as follows: "(5) When any commodity is packed by number, such number shall be expressed on the package in international form of Indian numerals, and every package intended to be sold by number shall be packed in the manner specified in the Sixth Schedule: Provided that the Central Government may, if it is satisfied that for any technical or mechanical reason it is not possible to prepack any commodity in the standard quantities specified in the sixth Schedule, authorise the pre-packing of such commodities in such numbers as it may specify." The Sixth Sc....
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.... a package intended for retail sale, containing two or more individual packages, or individual pieces, of similar, but not identical (whether in quantity or size) commodities. The definition of "multi-piece package" and "group package" would also lead us to the conclusion that even if the number of the commodity is one, it would satisfy the definition of a pre-packed commodity or commodity in packaged form. 18. The definition of "pre-packed commodity" in Rule 2(l) was amended and a new definition is substituted with effect from 13.1.2007. The amended definition reads as follows: "(l) "pre-packed commodity", means a commodity, which without the purchaser being present, is placed in a package of whatever nature, whether sealed or opened, so that the commodity contained therein has a pre-determined value and includes those commodities which could be taken out of the package for testing or examining or inspecting the commodity;" Explanations to Rule 2(l) were omitted and the definition was re-cast. It does not appear that the substitution of Rule 2(l) was to change the definition of "pre-packed commodity" altogether but to streamline the definition to avoid different interpretations....
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.... it is abundantly clear that the intention of the manufacturer, packer or retailer is hardly relevant in construing the various provisions of the Acts and Rules. 21. The writ petitioner has raised ground (G) in the Writ Petition in support of the contention that the sale price of the commodity need not be shown on the carton containing the commodity. The said ground reads as follows: "(G) It is respectfully submitted that out of the five declarations required to be made by Section 39 of the said Act and the eight declarations required to be made by Rule 6 of the said Rules, the only declaration which is likely to be subject to change between the date of manufacture of the products and their sale, is the sale price of the package. It is respectfully submitted that the sale price of the package is dependent upon several factors particularly differential rates of local taxes, budgetary changes in excise and other Central Taxes, Costs of freight, direct and indirect taxes or all or any of the aforesaid factors. It is respectfully submitted that in a given case by reasons of the change in direct and indirect taxes or by reason of change in rates of freight, etc., the consumer may eith....
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....goods which are sold or distributed by weight, measure or number is dealt with under the Standards Act. The Enforcement Act, 1985 provides for the enforcement of the standards of weights and measures established by or under the Standards of Weights and Measures Act, 1976 in respect of intra-State trade or commerce. Section 33 of the Enforcement Act provides that the provisions of the Standards Act and the rules thereunder with regard to commodities in packaged form shall, as far as may be, apply to every commodity in packaged form which is distributed, sold, or kept, offered or exposed for sale, in the State. Sub-section (2) of Section 33 empowers the State Government to make rules, not inconsistent with the Standards Act or any Rule made thereunder, to regulate the packaging of any such commodity. The Standards Act and the rules thereunder and the Enforcement Act are intended for the protection of the rights of the consumer. Interpretation of the provisions of the Acts and the Rules shall be in a rational manner keeping in mind the objects sought to be achieved by the enactments and Rules. A too technical interpretation as is sought to be made by the writ petitioner, if accepted, ....
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....t Appeal. The petitioner in the Original Petition, namely, M/s. Godrej & Doyce Mfg. Co. Ltd., is a manufacturer of Typewriters. The Original Petition was allowed by the learned single Judge. The judgment in O. P. No.16488 of 1998 was also relied on by the learned single Judge. Following the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, this Writ Appeal is allowed, the judgment of the learned single Judge is set aside and the Original Petition is dismissed. No order as to costs. W. A. No.1217 of 2003: Respondents 1 and 2 in O. P. No.14239 of 1993 have filed the Writ Appeal, challenging the judgment of the learned single Judge in the Original Petition. The petitioner in the Original Petition, namely, M/s. Premier Mills Limited, is a manufacturer of wide range of Dhothies under different brand names, namely, Chakravarthy, Primeking, Chalukya, etc. The petitioner contended that the Dhothies cut into standard dimensions in the mill are distributed to various wholesale dealers. The wholesale dealers would, thereafter send the pieces to retail dealers. The Dhothies are placed in polythene bags only for the purpose of preventing the commodity from getting soiled. It was contended th....
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....bution of Cassette Recorders, Video Cassette Players, Rechargeable Lanterns and Push Button Telephones. Similar reliefs as claimed in O. P. No.16488 of 1998 are claimed in this Original Petition as well. For the reasons stated in the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. No.11776 of 1998: In this Original Petition filed by BPL Telecom Limited, BPL Sanyo Technologies Limited and BPL Limited, similar reliefs as claimed in O. P. No.16488 of 1998 are claimed. The petitioners also prayed to set aside all actions initiated as per Exts.P1, P2, P5 and P8 show cause notices and Ext.P11 order issued by the Controller of Legal Metrology, Thiruvananthapuram. As per Ext.P11, the third respondent has granted sanction to file complaint against the first petitioner and others. Following the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. No.12395 of 2001: The petitioner is engaged in the business of distribution of electronic spares and accessories. The goods distributed by the petitioner include amplifiers, cables, capacitors, plugs and sockets, cords....
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....o not attract the Standards Act, the Enforcement Act and the Rules. There is also a prayer for a writ of mandamus restraining the respondents from initiating any legal proceedings against the petitioner. Since disputed questions of fact are involved in the Original Petition and in view of the pendency of the prosecution against the petitioner, the Original Petition is closed leaving open all the contentions of the petitioner. O. P. No.15944 of 1994: The petitioner is a partnership firm engaged in the business of wholesale distribution and sale of paper and paper-boards. For the reasons stated in the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. No.21966 of 1999: The petitioner in the Original Petition, namely, Garware-Wall Ropes Limited, is engaged in the manufacture and distribution of different types of synthetic ropes, polypropolene, multifilament yarn twines, etc. The Inspector of Legal Metrology seized package containing synthetic ropes kept for sale on the ground that the package does not contain the statutory declarations. The contentions put forward by the petitioner are similar to the contentions raise....
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....vate Limited, is a manufacturer of home soda makers. On inspection in the trade premises of the retailer, the Inspector of Legal Metrology found that the necessary statutory declarations are not shown on the package. The contentions put forward by the petitioners are similar to the contentions raised in W. A. Nos.218 of 2003 and 1098 of 2003. For the reasons stated in the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. No.17181 of 1999: The petitioner, namely, T.T.K. Prestige Limited, is engaged in the manufacturing and marketing of pressure cookers, pressure pans, cook wear, non-stick cook wear etc. The contentions put forward by the petitioner are similar to the contentions raised in W.A.Nos.218 of 2003 and 1098 of 2003. For the reasons stated in the judgment in W. A. Nos.218 of 2003 and 1098 of 2003, the Original Petition is dismissed. No order as to costs. O. P. No.27234 of 1999: The petitioner, M/s.Falcon Agencies Private Limited, is an authorised distributor of footwear items manufactured by 25 companies mentioned in the Original Petition. The contention of the petitioner is that the package containing foot....