SC: Labour courts cannot deal with disputes over bonuses

The Supreme Court has clarified in a batch of appeals by the Himachal Pradesh State Electricity Board that the labour courts cannot deal with disputes over bonus.

In this case, the labour court and the high court had ruled in favour of daily wage workers and declared that they were entitled to bonus. Remitting the cases to the high court, the Supreme Court stated that according to the Industrial Disputes Act, bonus is not a matter under the jurisdiction of the labour courts.

Kerala HC judgment set aside

The Supreme Court has set aside the judgment of the Kerala High Court in the appeal, Kerala Road Lines vs Commissioner of Income Tax in which the question was whether interest on delayed payment for a land deal was capital or revenue expenditure.

The transport company bought land from Peirce Leslie Ltd. There was an agreement to pay interest for delayed payment. The transport company claimed this amount as revenue expenditure under Section 37 of the Income Tax Act whereas the tax authorities treated it as capital expenditure.

The tribunal held in favour of the firm, but the high court reversed that finding holding that the transport company was not doing real estate business but doing business in transports. The Supreme Court reversed this ruling and stated that the payment of interest, as part of the contractual obligation, was business expenditure.

SC: Sildenafil Citrate is allopathic

The Supreme Court has held that Sildenafil Citrate (a Viagra-like drug) was an allopathic formulation and only companies holding a valid licence can manufacture and sell it.

It denied the claim that it was an Ayurvedic medicine and ruled that the selling this drug as one of the ingredients in an ayurvedic capsule, Ozomen, and not displaying its name among the capsule’s ingredients would also constitute an offence.

The drug inspector had started prosecution of the firm, Fizikem Laboratories Pvt Ltd, for selling the drug. The firm moved the Andhra Pradesh High Court, which held that the inspector had no power to deal with Ayurvedic medicines. The inspector appealed to the Supreme Court which reversed the high court order.

Reprieve given to Parakh Foods Ltd

The Supreme Court last week held that packets of soyabean oil containing pictures of vegetables which are, in no way, connected with soyabean oil, would not amount to ‘misbranding’ under the Prevention of Food Adulteration Act.

In this case, Parakh Foods Ltd. (now Cargill Foods India Limited) marketed packages of soyabean oil with pictures of vegetables. It was sought to be prosecuted. The Andhra Pradesh High Court quashed the prosecution but held that the company had misbranded the product as packages contained misleading pictures.

On appeal, the Supreme Court held that the vegetables shown on the label of soyabean oil did not in any way indicate that the quality of soyabean oil is ‘super-refined’ or ‘anti-cholesterol’ nor exaggerated the quality of the product. The pictures only indicated that the article of food can be used for cooking the vegetables.

Central excise appeal dismissed

The Supreme Court has dismissed the appeal of the commissioner of central excise against the order of the tribunal quashing the demand of duty against Scan Synthetics Ltd which produces textured yarn and captively consumes it in the manufacture of dyed yarn.

The firm was accused of undervaluing the yarn captively consumed. The court stated that the assessable value of the captively consumed grey yarn would be on the basis of the price at which it was sold to unrelated buyers in wholesale at the factory gate. The firm showed invoices showing the sale to independent buyers. Since the prices were the same, there was no undervaluation.

SC dismissed Gauhati HC judgment

The Supreme Court has set aside the judgment of the Gauhati High Court which had awarded damages under the Workmen Compensation Act to a driver who disappeared with the vehicle while on duty.

He was not heard of for more than seven years. The courts below assumed that he was dead according to Section 108 of the Evidence Act while giving the award.

Oriental Insurance Company, which was directed to pay the amount, challenged the ruling in the Supreme Court. It allowed the appeal stating that the presumption of death was wrong, as the charge sheet against the driver for running away with the vehicle was still pending.
LEGAL DIGEST, BS Reporter / New Delhi March 31, 2008
BUSINESS STANDARD; Tuesday, Apr 01, 2008