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Conduct of public bodies has to be fair and not arbitrary; do not force citizens to approach courts: SC

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Supreme Court

It is a no-brainer that the apex court in a latest, landmark and laudable judgment titled Chief Executive Officer And Vice Chairman Gujarat Maritime Board vs Asiatic Steel Industries Ltd And Ors. in Civil Appeal No. 3807 of 2020 (Arising out of SLP (C) NO(S). 28244 of 2015) delivered on November 24, 2020 has fairly, frankly and forthrightly observed that the conduct of a public body charged to uphold the rule of law, has to be fair and not arbitrary. The Apex Court observed so while dismissing Gujarat Maritime Board’s appeal against the High Court judgment which allowed the writ petition filed by “Asiatic Steel” Court seeking refund of contract consideration of Rs 3,61,20,000/- paid by them to the Board. We thus see that the Apex Court upheld the Apex Court judgment.

To start with, Justice S Ravindra Bhat who authored this noteworthy judgment for himself and Justice Indira Banerjee sets the ball rolling by first and foremost observing in para 1 that, “Leave granted. With consent, the appeal was heard. This appeal is directed against a judgment of the High Court of Gujarat dated 24.07.2015. The respondent (hereafter “Asiatic Steel”) had filed a writ petition before the High Court seeking refund of contract consideration of

3,61,20,000/- paid by them to the appellant (hereafter “the Board”). The High Court allowed the writ petition, in view of its earlier interim order, and directed the Board to pay interest for the period from 08.11.1994 to 19.05.1998. The brief facts that arise for consideration are as follows.”

While stating some key facts, para 2 then states that, “The Board issued a tender notice on 02.08.1994 for allotment of plots at Sosiya (near Bhavnagar, Gujarat) for ship-breaking of ‘very large crude carriers/ultra large crude carriers’ (VLCC/ULCC). Asiatic Steel made the highest bid, which was accepted and confirmed by the Board on 08.11.1994, for

3, 61, 20,000/- (hereafter the ‘Principal’). Asiatic Steel was allotted Plot V-10. The bid payment was made on 22.03.1995 in foreign currency, to the tune of $1,153,000, while the earnest money deposit of

5,00,000/- was paid on 08.11.1994.”

While continuing in the same vein, it is then narrated in para 3 that, “On 23.02.1995, Asiatic Steel and other allottees approached the Board citing difficulties in commencing commercial operations, on account of the connectivity to the plots and the existence of rocks inhibiting beaching of ships on the plot for the purpose of ship-breaking. Through a letter dated 19.05.1998, Asiatic steel intimated the Board that it wished to abandon the contract and demanded that the payment be refunded (an amount of $1,153,000), with interest at 10% per annum from the date of remittance. The Board, through a notice dated 19.05.1998, stated that an amount of

3, 61, 20,000/- would be refunded, but without interest. The Board also clarified that the refund would be directed to the original allottee of the plot (i.e. the second respondent, i.e. M/s Ganpatrai Jaigopal- hereafter referred to as “Ganpatrai”). Asiatic Steel then filed a writ petition before the High Court, seeking (i) refund of USD $ 1,153,000 with interest of 12% per annum compounded quarterly, to the third respondent, M/s Industeel Investment Holdings (hereafter “Industeel”, which had made the payment originally on behalf of Asiatic Steel); and (ii) refund of earnest money of

5,00,000/- with interest of 12% per annum, compounded quarterly to Asiatic Steel.”

To say the least, it is then noted in para 4 that, “Through an interim order dated 26.02.2002, the High Court held that prima facie, Asiatic Steel was entitled to a refund with interest at 10% per annum. Accordingly, the Board was directed to deposit the admitted amount, i.e., the Principal, with interest at 10% p.a. with the court’s Registry on or before 15.04.2002. The interest was to be calculated from 19.05.1998 up to 15.04.2002. The amount was permitted to be withdrawn by Respondent No. 3, with the consent of the other respondents. The Board made this deposit, as directed by the court.”

In hindsight, it is then pointed out in para 5 that, “On 17.09.2014, the High Court determined that the following issues survived to be determined:

(a) Whether interest on payment should be calculated from 24.03.1995 to 15.04.2002, or from 19.05.1998;

(b) Whether the earnest money of

5,00,000 should be refunded;

(c) Whether interest should be calculated at 10% p.a. or 12% p.a.

To put things in perspective, the Bench then explains in para 6 that, “The Board resolved, through a resolution dated 17.12.2014, to refund the earnest money deposit with interest of 10% calculated from 19.05.1998. On account of this development, the High Court examined the issue of quantification of interest, and held that so far as the amount that had already been refunded with interest at 10% was concerned, no grievance could be raised by Asiatic Steel, as it had initially claimed an interest of 10%, in the letter to the Board dated 19.05.1998. In the case of the refund already made of the Principal and the earnest money deposit, it was held that Asiatic Steel was not justified in claiming more than 10% interest. Neither party raised any grievance against the High Court’s interim order dated 26.02.2002 fixing the interest at 10%. The only question then left to be decided was with respect to the date from which interest on the Principal was to be calculated, and what the rate of interest was to be.”

As a corollary, it is then stated in para 7 plainly that, “The High Court held that the Board never claimed that it suffered any damage or loss due to Asiatic Steel’s termination of the contract. The reasoning of the impugned judgment was that hence, the Board was under a liability to compensate or pay reasonable interest for the period during which the money was retained by it. The High Court took into consideration that Indusind was a Singaporean company, and that the rate of interest was lower in developed countries. Accordingly, the rate of interest was altered to 6% p.a., for the period during which the money was enjoyed by the Board. The Board was directed to (i) refund the earnest money of

5,00,000/- with interest at 10% p.a., in accordance with the resolution of 17.12.2014; and (ii) pay interest of 6% on the Principal from 08.11.1994 to 19.05.1998. This interest amount works out to

76,47,544/-. The Board is, hence, aggrieved by the impugned judgment.”

What’s more, the Bench then elucidates in para 24 that, “Asiatic Steel was the highest bidder in an auction for five shipbreaking plots, held on 08.11.1994. The Board received payment of the earnest money deposit of

5,00,000/- on this day. Plot V-10 was allotted to Respondent No. 1 (Asiatic Steel Industries Ltd.). M/s Ganpatrai were the Indian shareholders of Asiatic Steel, while M/s Industeel was a foreign shareholder based in Singapore. The upset premium was remitted by Industeel in US currency (dollars $), on 22.03.1995.”

Interestingly enough, the Bench then makes it clear in para 27 that, “Such being the position, it was nobody’s case that Asiatic Steel was unaware about the site conditions. This is particularly important because it was willing to commit a substantial amount in foreign exchange for the plot which it bid for and was eventually granted. Likewise, the requisite undertaking too was furnished on its behalf. It is in this background of circumstances, that the claim for interest for the period in question requires examination.”

As it turned out, it is then envisaged in para 33 that, “Two important aspects need to be noticed at this stage: first, on the one hand, that Asiatic Steel was aware of the condition of the plot, at an early stage, when it bid for it. In this regard, its conduct is to be judged in the light of the Board’s inaction in regard to the unfitness of the allotted site, as in the case of the other concerns. Two, Asiatic Steel was no better and no worse than the other plot lessees, who demanded refund of their amounts. The difference between them, and Asiatic Steel was that the latter chose to demand refund on 19.05.1998. Asiatic Steel’s final letter discloses its awareness that the other concerns approached the court earlier, but that it waited as it wished to have the issue resolved amicably, rather than moving the court for relief.”

Bluntly put, the Bench then minces no words to state in para 34 that, “In the opinion of this court, that fact that Asiatic Steel and other concerns bid for the plots knowing the state they were in, cannot be disputed. However, the conduct of all the successful bidders consistently suggests that they expected that the plots would be given in usable condition, within reasonable time. Clearly, the Board could not and most certainly did not rectify the conditions by removing the beachfront rocks. The Board is not forthcoming about the reasons for its inaction. It urged two defences in its reply to the writ petition: one, that the dispute was in the realm of contract and two, that even though like in other cases, the Board was prepared to consider a refund, Asiatic Steel was a joint venture company. These, in the opinion of this court are wholly insubstantial reasons.”

No doubt, the Bench then is intrigued to note in para 35 that, “It is clear from the Board’s conduct that it never responded to the letters written by Asiatic Steel; at least, no reply has been placed on record. Even Asiatic Steel’s request for permission to carry-out the necessary clearance work at the cost of the board, was not responded to – either positively or negatively. Further, whenever any bidder approached the court complaining that the plot allotted was unusable, the Board decided, mostly contemporaneously, to refund the amount, even with interest. In the case of Asiatic Steel, however, when the demand was made for refund on 19.05.1998, the Board did not act, forcing the company to approach the court, firstly through a civil suit which was later withdrawn, and then in a writ petition.”

Not stopping here, the Bench then puts forth in para 36 that, “In the opinion of this court, the Board’s complete silence in responding to Asiatic Steel’s demand for refund, coupled with the absence of any material placed on record by it suggesting that the complaints had no substance leaves it vulnerable to the charge of complete arbitrariness. The Board’s conduct or indifference in regard to the refund sought (in respect of which there was no meaningful argument on its part before the High Court) can be only on the premise that it wished the parties to approach the court, till a decision could be taken to refund the amounts received by it.”

More damningly and more crucially, it is then observed in para 37 that, “In this court’s considered view, the Board’s action is entirely unacceptable. As a public body charged to uphold the rule of law, its conduct had to be fair and not arbitrary. If it had any meaningful justification for withholding the amount received from Asiatic Steel, such justification has not been highlighted ever. On the other hand, its conduct reveals that it wished that the parties should approach the court, before it took a decision. This behavior of deliberate inaction to force a citizen or a commercial concern to approach the court, rather than take a decision, justified on the anvil of reason (in the present case, a decision to refund) means that the Board acted in a discriminatory manner.”

Needless to say, it is very rightly observed in para 40 that, “In this case, conduct of the Board betrays a callous and indifferent attitude, which in effect is that if Asiatic Steel wished for its money to be returned, it had to approach the court. This was despite its knowledge that at least three other identically placed entities had asked for return of money and, upon approaching the court, were refunded the amounts given by them promptly. In view of these facts, nothing prevented the Board from deciding to refund the amount, without forcing Asiatic Steel to approach the court.”

Truth be told, it cannot be ignored that it is then very crucially revealed in para 41 that, “This court notes that the High Court directed payment of interest for the entire period (i.e. starting from 08.11.1994 and ending on 19.05.1998). However, it is evident that Asiatic Steel had not paid the entire amount on 08.11.1994; in fact the sum of $1,153,000 /- i.e. the principal consideration, excluding the earnest money deposit, was deposited on 24.03.1995. Therefore, the impugned judgment erred in directing payment of interest on the entire amount from 08.11.1994; instead, the direction to pay interest on

3,61,20,000/- shall operate with effect from 22.03.1995 to 19.05.1998.”

No wonder, it is then finally observed in para 42 that, “The appeal is dismissed, subject to the modification indicated above, to the impugned judgment of the High Court.”

In conclusion, the bottom line of this key judgement is that conduct of public bodies has to be fair. It should not be arbitrary. Also, citizens should not be forced to approach the courts. Very rightly so!

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Policy & Politics

MAKING IT HAPPEN: RESTORATION OF WASTELAND

Anil Swarup

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Aishwarya Raj joined the Indian Forest Service in 2017, and Parvati Division was his second posting after Kullu in the state of Himachal Pradesh. Having taken charge in January, 2021, the first task was to assess the ground situation in different areas of his jurisdiction. On one such field visit close to the confluence of the mighty Beas and Parvati rivers, he came across a tract of forest land dumped with garbage and infested with heavy weed overgrowth. This was also a cause of riverside pollution. His staff informed him that the space was being misused by anti-social elements both during day and night to bide their time. These elements were involved in substance abuse as well. There was a threat of encroachment in the near future. Wanting to do something about these challenges, Aishwarya wondered how the forest land could be reclaimed into something safe and how some funds could be sourced to carry out the execution of a plan that he had on his mind. In his previous posting too, he had worked on a 15 hectare wasteland project in Manali that was being developed into an ecotourism project which gave him the confidence to think in terms of a possible revamp here as well.

Interestingly, the Government of Himachal Pradesh, around the same time, declared its intention to set up ‘Swarnim Vatikas’ across the state as part of Himachal’s 50 years statehood celebration. Using this as an opportunity, it was decided to transform this 1 hectare of wasteland into an eco-friendly sprawling, green urban space for town dwellers and nature seekers alike. The green zone was christened as ‘Sangam Swarnim Vatika’ for it stood at the confluence of two mighty rivers. If someone visits the place today, the view is serene, with no evidence of a shabby dump yard that once held ground here. Instead, it has been replaced with a beautifully landscaped garden, with a variety of tree species, creepers, shrubs, herbs along the area, frequented by a variety of beautiful birds.

The first step was to clear the area of its waste pile, cactus and weeds. The enthusiastic forest guards organized the clean-up quite efficiently. The garbage of around 25 tippers was collected and disposed. The organic waste was turned into processing vermicompost in nearby nurseries. The quality of soil was checked by deep digging and it was found to be in fairly good condition for plant growth. After mixing with some fertile mountain soil and humus, the soil was readied.

Before planting, the second step was to ensure the protection of the 2.5 acre area from both grazing/biotic pressures and movement of anti-social elements. In part RCC fencing and inter-link chain fencing was carried out for the entire space. Additionally, CCTV cameras were also installed nearby for monitoring purpose.

Technology cam handy. Aishwarya’s I-pad (which he deployed at workplace to minimize paper use) was a huge help in designing the entire lay-out of the Swarnim Vatika. After spending sometime exploring and reading on the local ecology and plant suitability of the ecotone area (Riverine), species of trees, shrubs and ornamental ones were identified. These could be considered for plantation in the park.

In phase I, over 400 species of native varieties such as deodar, silver oak, horse-chestnut, jacaranda, golden shower, bougainvillea, rose, thuja, cycas, ribbon plant, gladiola, peach, apricot, plum and pomegranate, among others have been planted. More than 200 additional species will be planted by the coming monsoon season. Groves of some of these species have been created so that can be enjoyed by visitors in future.

For landscaping, it was decided to go the up-cycling way in three aspects. One, the discarded or used slates, a stone with which houses are made in the hills, from the neighboring settlement were up-cycled to create the walking trails. The local ‘Dhrub’ grass sprouting in between those slates within 2 months is a sight to behold. Two, only riverside stones were used to landscape and beautify the Vatika. In addition to being eco-friendly, they enhanced the natural riverside view. Three, signages regarding nature awareness and seating are being installed. For this purpose, driftwood, obtained during last monsoon, are being put to use.

Parvati Valley is a hugely popular tourist hotspot with a number of breathtaking destinations. The Vatika, however, was primarily created for the local people who actually didn’t have enough urban walking or recreational avenues. Interestingly, there have been a number of avian visitors at the park – including yellow-billed blue magpie, parakeets, Eurasian hoopoe, barn swallow and doves. There is a likelihood of further increase in the number of such visitors.

The local panchayats, Mahila Mandals as well as youth groups have been engaged in this effort to instill a sense of ownership amongst them. This will help sustain the effort of keeping this area clean and green.

Next up, an attempt is being made to identify more such degraded areas in Parvati jurisdiction that can be converted into green zones. With funds and local support in place, this initiative will help revamp such areas and enrich the environment. The Vatika is an example where the Forest Department under the visionary leadership of a young forest officer, Aishwarya Raj and his committed team demonstrated a win-win scenario of nature conservation and development. Such initiatives, though small and in remote locations, can inspire others to do the same as they attempt to restore the beauty of Mother Earth. It is also an effort to demonstrate that a combination of concern for nature and capability to take the stake holders along can help transform the landscape in many regions. There are indeed many parts of the country that require such interventions

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Policy & Politics

WHEN WILL YOU CHANGE, WHEN WILL THE COUNTRY TRANSFORM?

Milkha Singh wished to see an Indian win Olympic gold medal in athletics.

Vijay Darda

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I salute and bow down to the legendary sprinter Milkha Singh who got the sobriquet of Flying Sikh. On his departure, two thoughts come to my mind. First, will we ever see a runner like him again? And the second, when will Milkha Singh’s unfulfilled dream be fulfilled? He had a dream, that one day an Indian will win an Olympic gold medal! I wonder whether true tribute can be paid with an unfulfilled dream!0

When Milkha Singh ran in the Commonwealth Games and set a record that remained unbroken for 40 years, he did not have the resources. He faced immense hardship. He didn’t have a good pair of shoes. The concept of nutritious food was totally unfamiliar then. He used to run barefoot during practice. Yet he excelled, all these difficulties notwithstanding. His wife Nirmal Kaur was the captain of the national volleyball team and son Jeev Milkha Singh is a professional golfer. Milkha Singh always regretted why no Indian could win a gold medal in the athletics section in the Olympics. This regret became his dream. He would always express it. Unfortunately, this dream could not be fulfilled during his lifetime. After his death, the country is invariably remembering his dream and his contribution to sports. The entire country including the President, Vice President and Prime Minister has paid tribute to him. I think the real way of paying tribute to him will be to fulfil the dream he saw all his life. The nation should remember the blisters on his feet when he ran barefoot so as to groom an entire generation of sportsmen. Like Milkha Singh, it was Dhyanchand’s dream too that India should become the world champion in hockey again.

Actually, to fulfil the dreams of Milkha Singh and Dhyanchand, we have to work together on many fronts. First of all, we have to understand that sports is not just a means of enhancing physical ability. Sports are directly related to our patriotism, our self-respect, our progress and our nation’s pride. Remember that when the tricolour flies high in the celebration of victory and when the tune of Jana Gana Mana is played, we are thrilled to the bone. Tears of joy flow from the eyes of the winner. It was the dream of Milkha Singh to celebrate victory in the Olympic arena and hold the tricolour high to the tune of Jana Gana Mana.

Of course, the atmosphere is changing now. Kiren Rijiju is a very competent minister. He wants that an environment of sports should be created in the country. Children who have abilities should get opportunities. It can be said that the government seems to be becoming conscious about sports; the government has started to think that it should spend on sports, but the atmosphere is still not so positive that we can produce another Milkha Singh again. If we really want to create and train a generation of players, we have to learn how children are spotted and groomed by China, Russia or Croatia. Today the players of these countries dominate the playground, and the commitment of the government there is the biggest reason. I remember, I was watching a World Cup match. When the Croatian football team won, their President Colinda Graber walked into the dressing room and hugged the sweaty players and kissed them. When will our players experience such a moment?

We are all witness to the state of affairs about sports in our country. From the schooldays itself, we should keep in mind and identify which child has the potential for which sport. They should be selected there and their training should start. But today, our children are away from the playgrounds and remain obsessed with mobile phones. Neither the parents care much nor our government. Children’s playgrounds are also shrinking. Concrete jungles are encroaching upon them. If Saina Nehwal has risen from amidst us and made a name for herself today, the government has no contribution in it. This is the result of the determination of a mother who trained Saina from the age of five with a pledge to make her a world champion.

Saina Nehwal’s mother Usha Rani Nehwal was seven months pregnant and still played a local match. This shows her passion. Be it Saina Nehwal, Sania Mirza or Mary Kom or other players like them, all of them have been able to excel on their own strength and determination. Many people have potential but they do not get opportunities due to various reasons. Politics has to be kept away from sports, only then will success be achieved. Sometime back, I had heard that Maharashtra’s shooter Anjali Bhagwat, who earned a name in the world, faced a lot of harassment. Many such incidents keep coming to light. If incidents like these happen, why would anyone make sports his or her career?

Spotting and grooming children with potential is not an impossible task. It just needs perspective. You spot the children and give the responsibility to the industrial houses to mould them. Yes, it will be very important to keep in mind that the government does not interfere and the industrial houses should get full freedom for this purpose. And of course, also ensure that the craze for cricket should not destroy other games. We have to understand that cricket is not a national or international game. It’s neither in the Olympics nor in the Commonwealth Games. This is a club game. But cricket has become a religion in India. Given the amount of money cricket has, it has its share of controversies and scandals too. I would not like to discuss any of them. All I have to say is that to fulfil the dream of Milkha Singh and hold the tricolour aloft in the world of sports, we need to create enthusiasm, passion and love for sports among the children.

And finally, the only question to the system is when will you change, when will the country change, and when will this dream come true?

The author is the chairman, Editorial Board of Lokmat Media and former member of Rajya Sabha.

Though Milkha Singh is no longer among us. He has left a dream for all of us to fulfil, that some Indian athlete should win a gold medal in the Olympics. We will pay him a true tribute only when we are able to mould our youngsters into sporting stalwarts who will be able to win gold medals and make us all feel the thrill of the tricolour held high to the tune of ‘Jana Gana Mana…’ in the Olympics.

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Policy & Politics

Significance of attaining the age of majority: Decoding the landmark judgements in the light of Article 21

The 242nd Law Commission Report titled ‘Prevention of Interference with the Freedom of Matrimonial Alliances (in the name of Honour and Tradition): A Suggested Legal Framework’ demonstrates how crimes and unwarranted interference against persons marrying have the catastrophic and grave chilling effect on the individual’s right to choose. The report highlights, “As far as India is concerned, ‘honour killings’ are mostly reported from the states of Haryana, Punjab, Rajasthan and UP. Bhagalpur in Bihar is also one of the known places for ‘honour killings’.”

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If you are a major, you can even solemnize marriage with a criminal and no fetters can be placed on your choice; indeed, it may appear somewhat paradoxical to the ordinary mind but not to a legal mind. I am not pronouncing this verdict on unqualified grounds rather this phenomenon of the right to make a choice is the result of the peculiar stupendous judicial pronouncements. Recently, the right to choose a partner of one choice, the right to renounce one religion and accept another religion are such constructive, progressive, and liberal concepts that have garnered the substantive attention of large public discourse. But with the attention on the topic of choice of partner and religion, few people have paid attention to the subject matter of “Age of the Majority”.

According to Sec 3(1) of the Indian Majority Act 1875, an individual is said to attain the age of majority when he/she completes his/her 18 years. Article 21, does mandate that no person shall be deprived of his/her liberty but there is no such expression, expressly enumerated under this Article that we are having the liberty to marry a person, involved in criminal activities. Interestingly, it is worth mentioning that there are many rights guaranteed implicitly under Article 21 of the Indian Constitution as it is the mother in recognizing the “Unrecognised liberties”. It is desirable to note that one of such recognitions, was recognizing the significance of an individual who attains the age of majority.

The Hon’ble Supreme Court, while recently hearing the contention advanced by the petitioner in the case of Soni Gerry v. Gerry Douglas (2018) 2 SCC 197 that the daughter is under illegal custody/detention and the Court must free her from illegal restraint. The Hon’ble Court considered this particular fact that the daughter had completed 18 years of age on 19.9.2016, thus she had attained the age of majority. In this regard, the landmark observation that was made by the Court that – ‘when an individual attains the age of majority, it has its own significance. It was also observed that he/she is entitled to make his/her choice. The Hon’ble Supreme Court rejected the contention to pass the writ of habeas corpus and held that she was not under illegal detention.

AGE OF MAJORITY: A DETERMINATE FACTOR IN UPHOLDING THE TWO MAJOR RIGHTS

Recognising the two major rights- the right to marry a person of one’s choice and the right to renounce one religion and accept another religion are appositely valued and also its esteemed status is conferred under Article 21 of the Constitution of India.

Article 16 of the Universal Declaration of Human Rights also lays down the importance of age of majority that – “Men and women of full age, without any limitation due to race, nationality or religion, have the right to marry and to found a family. They are entitled to equal rights as to marriage, during marriage and at its dissolution.

“India is a free and democratic country and once a person becomes a major he/she can marry whosoever he/she likes. If the parents of the boy or girl do not approve of such inter-caste or inter-religious marriage the maximum they can do is that they can cut-off social relation with son or daughter,….”- This was the erudite observation made in the much-celebrated case of Lata Singh v. State of U.P and Another, (2006) 5 SCC 475 that reverberates in the Constitutional guarantee of freedom from the patriarchal tyranny and autocracy.

The notion of liberty was also examined and evaluated in the case of Gian Devi v. Superintendent, Nari Niketan, Delhi (1976) 3 SCC 234, that the girl has attained the age of majority and no restraints can be placed on her choices of the person with whom she is to stay, nor can any restriction be imposed regarding the place where she could stay. Even the Court does not possess the right to determine.

The landmark case of Shafin Jahan v. K.M Ashokan & Ors. AIR 2018 SC 357 cannot be ignored as the same is an important development for the right to choose a partner of one’s choice. It is worth stepping into the facts of the case where a girl namely Hadiya aged 26 years converted herself to Islam and married a Muslim boy namely Shafin Jahan. In this case, the father Ashokan moved a habeas corpus petition before the Hon’ble Kerala High Court alleged that her girl Hadiya was the victim of systematic psychological manipulation and forcefully converted to Islam and in the furtherance of same, her daughter was likely to transport out of the country. The High Court accepted the contentions and allowed him to sustain the writ petition of habeas corpus and annulled the marriage of her with Shafin Jahan. The High Court of Kerala was in the view that even though she has attained the age of majority, she is weak and vulnerable and capable of being exploited in many ways in the circumstances noticed in this instant case. An investigation was also ordered to National Investigation Agency to investigate the ‘education, family background, antecedents and other relevant details of Shafin Jahan and it is fascinating to note that the principal finding of the report was that Shafin Jahan is accused in a criminal case and his Facebook posts show a radical inclination.

When this matter came before the Hon’ble Supreme Court, it was observed that Kerala High Court has failed to recognize the undisputed fact that the girl Hadiya is major, and when an individual attains the age of majority, he/she becomes capable to take her own decision. It was also observed that the annulment order passed by the Kerala High Court is the non-acceptance of her choice that simply transgresses her fundamental rights guaranteed under our Constitution. The Kerala High Court, being a Constitutional Court was not supposed to interfere in this matter as the very interference amounts to a miscarriage of justice and the liberty and dignity of two consenting adults who have been subjected to judicial affront. The Hon’ble Supreme Court also clarified that if there is any criminality in any sphere then NIA may continue its investigation however the validity shall not form the subject matter of the investigation and NIA cannot interfere with the marital status of the two major couples. The appeal was allowed and judgment of the High Court was set aside.

There are other landmark judgments as well but in this overall context, the importance of emphasizing the concept of age of majority and right to make a free choice that the basic elements of a dignified life are also the realization of the significance of the right to choose within the legitimate parameters of the law. The individual’s authority is supreme and no one possesses the right to dictate or limit a person’s choice. Our choices are cherished because they are ours. Indeed, it is not a privilege rather a right of a major and more importantly it is further protected by the Constitution of India which ensures that every person can make the determinations on the matters which is central to the pursuit of happiness and is the intrinsic part of liberty and dignity guaranteed by the Indian Constitution.

Grave Social Symptoms: The Unwarranted Interference and Distressful Silence

It is disheartening to see all the survey carried or report submitted have become veritable documents of the fact that consent of family or the society or the clan is still required to enter into a wedlock. Despite of the fact, no shackles can be placed on the choice of a major, still there is an unwarranted interference of the family or the society or the clan that guillotines the freedom and liberty guaranteed under the Constitution of India and the distressful silence of the protectors of this right succumbs the objective of our Constitutional guarantee of freedom of choice which is the quintessence of the 21st Century.

The 242nd Law Commission Report titled “Prevention of Interference with the Freedom of Matrimonial Alliances (in the name of Honour and Tradition): A Suggested Legal Framework” demonstrates that how crimes and unwarranted interference against persons marrying have the catastrophic and grave chilling effect on the individual’s right to choose. The report highlights that- “As far as India is concerned, “honour killings” are mostly reported from the States of Haryana, Punjab, Rajasthan and U.P. Bhagalpur in Bihar is also one of the known places for ‘honour killings”. Even some incidents are reported from Delhi and Tamil Nadu. Marriages with members of other castes or the couple leaving the parental home to live together and marry provoke the harmful acts against the couple and immediate family members.”

The Report also underlines the pernicious interference of caste/community assemblies in the guise of ‘Khap Panchayats’ that underscores the liberty and instil the terror by inhuman treatment and inflicting the excessively harsh punishments on those individuals who tried to do exogamous marriage. Unfortunately, these merciless hands haunt the dignity of the individuals in the name of ‘moral vigilantism’ and distressful silence of the society waters them to continue this evil practise.

In 2018, Lok Foundation-Oxford University Survey run by the Centre for Monitoring India Economy (CMIE) reported that just 3 percent of marriages are love marriages. According to the 2011-12 India Human Development Survey, only 13 percent of married women in metro cities knew their husbands prior to marriage. Arranged marriages do not imply forced marriages necessarily however, this fact cannot be ignored that most of the Indian families and communities try to maintain endogamous marriage.

REASON BEHIND SUCH GRAVE SOCIAL SYMPTOMS

It is apt to refer to the case of Bhagwan Dass v. State (NCT of Delhi) (2011) 6 SCC 396 where the Hon’ble Supreme Court stated that many people feel that they are disgraced or dishonoured by the conduct of the young individuals who is related to them or belongs to their caste simply because they marry against their will or wishes or having an affair with someone, and as a result, they take the law into their hands and mentally, physically assault them and inflict the other atrocities which is not lawful in the eyes of law. The 242nd Law Commission Report mentions that the crimes against the young individuals take place as the result of doing exogamous marriage without receiving the family consent. Even the marriages between the young couples outside the gotra often called the violent reaction from the family or clan or society.

Ostensibly, it is clear that that the couples must be freed from the unlawful fetters or hindrances placed by the so-called social guardians who are doing nothing for the benefit for the society rather killing the soul of our Constitution. Hence, it is important to break down the same.

STEPS TAKEN

Undoubtedly, the Courts are playing the active and important role in asserting the choices of majors. For this reason, this particular subject matter becomes of utmost importance. The case of Sakti Vahini v. Union of India (2018) 7 SCC 192 is the evident and glaring example where the Hon’ble Supreme Court directed the police departments and State governments to adopt a robust mechanism to eradicate the crime of ‘Honour Killing’. The Hon’ble Court laid down certain guidelines which was preventive and punitive in nature. Also, the remedial measures were issued. However, if the governments and administrations at the different tiers will not work properly and become silent spectator then the importance of same will languish which is fortunately not in our case.

In order to boost and encourage the inter-caste marriages, the NDA government is providing Rs. 2.5 lakh for every inter-caste marriage with Dalit under the ‘Dr. Ambedkar scheme for social integration through inter-caste marriage’. This financial motivation was started in 2013 but there was a bar that total income must be less than Rs. 5 lakhs so that one can be eligible to receive the one-time monetary incentives of Rs. 2.5 lakhs. Recently, in order to infuse the teachings of BR Ambedkar in the society and to promote the social equity, the Ministry of Social Justice and Empowerment took this bold step and scrapped this bar. This will definitely help in the effective implementation and the administration of this scheme. Many states also have the similar schemes and protective, pre-emptive and corrective measures to curb the menace of crimes against the individuals and to assert their choices. For instance, Bihar government provides the National Saving Certificate amounting to Rs 25,000/- as monetary incentive to women performing inter-caste marriage. The Madhya Pradesh Government has a dedicated cell better known as ‘Crime Against Women Cell” that ensures the safety of couples.

CLOSING OBSERVATIONS

Indeed, The notion of ‘Significance of Age of Majority’ has achieved the landmark growth. Still, in the long growth, the directions issued by the Courts and policy, measures adopted by the Central and State governments has to reach at the grassroot levels and more importantly the society itself has to come forward to stamp out the acts of barbarism against the individuals “WHO HAVE ATTAINED THE AGE OF MAJORITY”.

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Policy & Politics

Second coronavirus wave, administration and Fundamental Rights

The pandemic saw the infringement of various Fundamental Rights guaranteed by our Constitution. The fundamental human rights that are most affected are ‘Right to Health’ and ‘Right to Life’ which also includes ‘Right to die with dignity’. In many well-known judgements, the Supreme Court and several High Courts agreed that the dead corpse should be treated with proper dignity and treated fairly. The Supreme Court recognised that right to life extends not only to living persons but also to their bodies after death.

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In the words of William Shakespeare which says “All that lives must die, passing through nature to eternity.”While death is regarded as a natural occurrence, the basic decent treatment that is anticipated and should be provided to the deceased does not always germinate and materialize naturally. We recently had to witness such tragic cases which have not only shocked the entire country but have also witnessed and drawn intervention towards this grave issue from all over the world.

Sightings of dead bodies floating on the bank of the holy river Ganga were reported in the country’s top newspapers. Villagers in Bihar and Uttar Pradesh discovered bodies in the Ganga and Yamuna rivers on May 11, 2021. Ganga, a holy river where people undertake various rituals in relation to ceremonies that are therein mentioned in their holy book, they not only perform ceremonies but also venerate river Ganga for its purity. On May 11, seven bodies wrapped in plastic bags were discovered floating in Uttar Pradesh’s Ghazipur and Hamirpur districts. Similar incidents have also been reported in the Baksar district of Bihar. The greatest concern among residents was that stray dogs and birds would devour the carcasses which would then result in spreading the coronavirus. However, instead of taking action against those responsible for the malafide attacks, the state authorities are now playing a blame game with one another. The world is in danger and the situation has been seen severely detrimental among masses. The heart-rending incidents from these states remind us of the last Mughal emperor and his poetic lament. Unable to find a final resting place in his beloved homeland (India), the last Mughal emperor quite rightly put forth the plight of the dead – Kitna hai badnaseeb Zafar dafn ke liye/Do gazz amen bhi na milikoo-e-yaar mein (How unlucky is Zafar! For burial, even two yards of land were not to be had in the land of his beloved). In the recent past, a ‘novel’ difficulty, similar to the ‘novel’ Corona Virus, has arisen for our contemplation, which would be guided eventually from the foundations of this present article. The article shall examine three major contentions vis-à-vis the issue of dead bodies which were found floating on the banks of river Ganga. Firstly, whether the actions of state authorities being negligent towards the horrendous issue i.e the floating of dead bodies, be condemned? Secondly, the fundamental right of a dead person, enumerated under the constitution of India violated or do we not owe a duty to cremate the deceased respectfully? Third, is there a need to amend the guidelines issued by the Ministry of Health and Family Welfare on management of corpses?

NEGLIGENCE ON PART OF STATE AUTHORITIES

The term other authorities that are enumerated under Article 12 of the constitution of India has given interpretation to the term ‘AUTHORITIES’ by the means of landmark precedents. It is settled law that the State under Article 12 is the custodian of the welfare and wellbeing of its citizens. However, looking at the present scenario the situation seems to be such where the actions on part of state authorities are not at all seems to be custodian but seems to become a warrior against the interest of masses.

Legislation derives its power from the constitutions of India, 1950 which grant the liberal interpretation of Articles 21, 48 and 51(g) by the Hon’ble Judges of Apex court and other courts across the country. In the famous case of Narmada Bachao Andolan v. union of India 2010 SCC 664, The Supreme Court has held that the right to clean water is a fundamental right under article 21 of the Indian constitution. Water prevention and control of pollution act of 1974 is the key specific legislation for preventing water pollution and for taking care and maintaining water bodies. It also aims for promoting for restoration of water bodies. For better implementation of the act, the Central pollution control board and the state pollution control board have been established by the Central and the state government. Under the aforesaid act, the board has the requisite power to encourage and conduct research and investigation with the view of promoting, the prevention of contamination of water in a significant manner and also to add the central government for the matters relating to environmental issues and for the prevention and control of water pollution. In the present issue, the duties and obligations that have been imparted to such boards and the ones enumerated in the aforesaid act have been brazenly ignored by state authorities. They have failed to impart their duties in such remorse condition because of which the lives of masses are now at stake. Hence, because of the aforesaid reason the actions of state authorities should be condemned.

DEAD PERSON TOO HOLDS A FUNDAMENTAL RIGHT

The flagrants acts during the pandemic has resulted in the infringement of various Fundamental Rights guaranteed by our Constitution.The fundamental human rights that are most affected are “Right to Health” and “Right to Life which also includes Right to die with dignity.” In many well-known judgements, the Supreme Court of India and many High Courts agreed that the dead corpse should be treated with proper dignity and treated fairly. The Supreme Court of India recognized that right to life, to fair treatment and dignity, extends not only to a living person but also to their bodies after death. In a landmark judgment (Common Cause, A Regd. Society V. Union of India & Anr.) delivered on 9th March, 2018, the Supreme Court of India held that the right to die with dignity is an intrinsic facet of the right to life under Article 21 of the Constitution of India. In fact, in the year 2007, the Madras high court in the case of S.Sethu Raja vs The Chief Secretary (2007) 5 MLJ 404 had held in Para 18 of the Judgment that the same human dignity (if not more) with which a living being is suppose to be treated by our tradition and our culture should also apply to the dead person and he too holds a right of dignified burial or cremation of a dead body. The right to decent burial is upholding in Indian context, but who is authorized for burial is not explained in any Indian Law. There is a strong societal interest in the proper disposition of the bodies of deceased person. It is universally accepted that a duty is owed to both society and the deceased that the body be buried without any unnecessary delay.

AMENDEDMENT IN THE GUIDELINES AMID COVID-19 IS ‘THE NEED OF THE HOUR’

A document containing ‘Dead Body Guidelines (COVID-19)’ – [hereinafter, ‘Document’], was released by the Directorate General of Health Services (EMR División), Minister of Health and Family Welfare of India on March 15, 2020. To date, it remains unamended and builds on the epidemiological understanding of COVID-19 of the Ministry at present. The aforesaid document lacks some crucial quintessential.

Thereby, the authors would like to propose some takeaways from the other jurisdiction of the nations across the globe, which can be included in the aforesaid guidelines for the benefit of the masses across the country.

The guidelines should be inclusive or seeks to impose a compulsory cremation of the covid-19 victims, which is foremost aimed to prevent local bodies from being able to cremate the body of the deceased overriding his/her religious belief.

In the midst of the global pandemic of covid-19 where graveyards and crematoriums crammed, the locals people of various states are of the view that there emerged shortage of woods for pyre, thereby resulted in the hike in the cost of cremation, whereby this becomes the sole reason why the bodies were buried or seen floating. Hence, the guidelines should impose a reasonable amount or capped a certain amount that crematoriums can charge from families at the time of cremation of a dead body.

Prices should be regulated for hearse or ambulance services so that people are not used and are not exposed to difficulty transporting dead bodies.

The guideline should impose sanction on those people committing horrendous acts such as throwing bodies in rivers, not cremating bodies as per rules enumerated therein.

In order to avoid health risks from smoke emission from burning pyres in large numbers, the use of electric crematoria can be encouraged.

The burial or cremation of masses should not occur because it infringes the right to dignity of the dead.

CONCLUSION

India has been overwhelmed by a devastating second wave of the pandemic in recent weeks. It has recorded more than 25 million cases and 2,75,000 deaths. But the experts say the real death toll is several times higher. The bodies dumped on the river banks and the funeral pyres burning round the clock and cremation grounds running out of space are the proof that the official tally of deaths represent a substantial undercount of the true burdens. In recent times, various eye opening incidents surfaced through media wherein humans were seen to be treated worse than animals. There were interminable news reports which reported incidents like dumping of corpses in a pit at a burial ground without performing their last rites. Many photographs and videos of the half burnt and decomposed dead bodies have gone viral on social media. In order to stop this menace that is bulging the entire nation, all those aforesaid measure as stated hereinabove should be adopted and the the adminstration should pay heed and curb against all those activities that are disturbing not only the rights of dead person but all the right of a living person.

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Policy & Politics

Freedom of speech & sedition law in India : An analysis in the light of recent controversy

The definition of sedition must be narrowed down to encompass only the problems pertaining to the territorial integrity of India, in addition to the sovereignty of the country. The word ‘sedition’ is extraordinarily nuanced and needs to be implemented with caution. It should rarely be used but kept by and large as a deterrent.

Raju Kumar

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INTRODUCTION

It is an irony for the mostdemocratic nation, ie, India, where freedom of speech and expression has been granted under the Indian Constitu- tion, and while exercising their power enshrined un- der the Constitution of India. they are being booked for the offence of sedition. Accord ing to the report of Rights and Risks Analysis Group, as many as 55 journalists were targeted by the government during 25 March and 31 May for covering facts about the government handling of the Covid-19 pandemic.

Recently, the Supreme Court of India has quashed the sedition case registered against senior journalist Vinod Dua in Himachal Pradesh. The verdict was pronounced by a single judge bench led by Hon’ble Justice UU. Lalit.

Vinod Dua was booked for sedition for criticising the Narendra Modi government’s handling of the Covid-19 lock down and had uploaded the same on Youtube last year, While granting the relief the court relied on the principles laid down in the Judgment of Kedar Nath. The judg ment was delivered in the year 1962, where the consti- tutional validity of sedition law in India was validated. However, it was observed that free speech, discussions on matters of government functioning and their criti cism, and freedom of press are “essential for the proper functioning of the processes of popular government Currently, in the Vinod Dua case, the Hon’ble Court has also observed that the jour nalist will be entitled to pro tection under the judgment”.

It was further observed that “It must, however, beclarified that every Journalist will be entitled to protection in terms of Kedar Nath Singh, as every prosecution under Sections 124 and 505 of the IPC must be in strict conformity with the scope and ambit of said Sections as explained in, and completely in tune with the law laid down in Kedar Nath Singh”. The Court Held that

HISTORICAL

BACKGROUND OF SEDITION LAW

Sedition laws were enacted during 17th century England, when the lawmakers believed that only good opinions of the government should survive as the criticism of a Govern- ment may result in detri- mental to the government and monarchy. The law was originally drafted in 1837 by the father of the Indian Penal Code, Thomas Macaulay, but it was omitted when the In- dian Penal Code (IPC) was enacted in the year 1860.

Many freedom fighters were charged under this provision which includes the case of Joggendra Chandra Bose, who was the editor of the newspaper, Bangbosi, who wrote an article criticis ing the age of consent Bill for posing a threat to the religion and for its coercive relation ship with Indians.

Great freedom fighters like Bal Gangadhar Tilak and Mahatma Gandhi were also booked under this offense.

SEDITION LAW IN INDIA: CURRENT SCENARIO

Sedition is an offense under Sectio 124A of the Indian Penal Code (Hereinafter re- ferred to as IPC), 1860. See tion 124A IPC, defines the offense sedition when “any person by words, either spo- kenorwritten, or by signs, or by visible representation, or otherwise, brings or attempts to bring into hatred or con- tempt, or excites or attempts toexcite disaffection towards the government established by law in India”. Disaffection also includes disloyalty and all feelings of enmity. How ever, it is here notable that comments without exciting or attempting to excite ha tred, contempt or disaffee tion, will not constitute an offense under this section.

PUNISHMENT FOR SEDITION

Sedition is a non-bailable offense. Punishment un der Section 124A ranges from imprisonment up to three years to a life term. to which fine may be added. It is also notable that if a person is charged under this law, he will be barred from a govern ment Job. They have to live without their passport and must produce themselves in
constitutional. Furthermore, it was also held that the dis turbing the public order will mean nothing less than en dangering the foundations of the Stateor threatening its overthrow: These Judgments prompted the First Constitu tion Amendment, where Ar ticle 19 (2) was rewritten to replace “undermining the security of the State” with “in the interest of public order”. In the year 1962, in the historic judgment of Kedar Nath Singh vs State of Bihar. the supreme court decided on the constitutionality of See tion 124A. The Hon’ble court upheld the constitutionality of sedition, but had limited its application to “acts involving intention or tendency tore ate disorder,ordisturbance of law and order, or incitement to violence”. Itdistinguished these from “very strong speech” or the use of “vigor ous words” strongly critical of the government.

In the year 1965, the Su preme Court, in the judgment of Balwant Singh vs State of Punjab, held that mere slo ganeering which evoked no public response did not amount to sedition.

ARGUMENTS FOR SECTION 124A

The Provision of Sedition law has its application in fighting anti-national, secessionist and terrorist elements. It is argued withinside the fa- vour of this law that, it pro tects the elected government from tries to overthrow the authorities with violence and unlawful means. The continued existence of the government set up through regulation is an important circumstance of the stability of the State. Furthermore, it is also believed that if Contempt of court results in the penal action, the contempt of Gov ernment should also attract
the same.

ARGUMENTS AGAINST SECTION 124A

The Provision of Sedition Law isarelic of colonial lega cyand it is not fit for democra- ey This is a restriction on the legal exercise of the freedom of speech guaranteed by the Constitution. Government disagreements and criti cisms are an important part of healthy public debate in dynamie democracy. They should not be constructed as sedition. It is notable that The British who resisted the suppression of the Indians overturned their countrys laws. India has no reason not to abolish this part and
the time has come to amend this portion. It is also argued against this law that the terms usedunder Section 124A like disaffection are vague and subject to different interpre- tations to the whims and fan- cies of the investigating offi- cers. The sedition law isbeing misused as a tool to persecute political dissent. A wide and concentrated executive dis- cretion is inbuilt into it which permits the blatant abuse.

CONCLUSION AND WAY FORWARD

Dr Justice (Retd.) Balbir Singh Chouhan has observed that “The sedition law needs reconsideration”. Since the creation of this British Sedition Law, its application has always been inconsistent. In all cases, its application is vague and self-contradictory. Considering that it is used to suppress the masses, when it serves the masses, its application was initially vague. It is used as a tool to strengthen political motivations by preventing speeches that threaten the authority of the country. A clear and unam- biguous explanation of the crime. In recent years, the ap- plication of the sedition law has been too arbitrary and has become a controversial topic. Although our sedition position was established in 1960, it still exists. Over the past 50 years, Indian society has developed rapidly, and people have shown “toler ance” towards summons and violence. The nature of the government has also changed, and people’s under- standing of the government is different from that of its representatives.

India is the largest de- mocracy of the world and the right to free speech and expression is a vital aspect of democracy. The expres- sion or thought that isn’t in consonance with the policy

Freedom of speech & sedition kew in India: An analysis in the light of recent controversy

of the government of the day must now no longer be taken into consideration as sedition. Section 124A mus now no longer be misused as a device to scale down loose speech. The SC caveat, giver in Kedar Nath case, on pros ecution beneathneath the regulation can test its misuse It needs to be tested under the modified facts and situation: 1 additionally at the anvi of ever-evolving tests of ne cessity, proportionality and arbitrariness. The higher judiciary must use its super visory powers to sensitize the magistracy and police to the constitutional provision: protective free speech. The definition of sedition mus be narrowed down, to en compass only the problem: pertaining to the territoria integrity of India in addi tion to the sovereignty of the country. The word ‘sedition is extraordinarily nuancec and needs to be implement ed with caution. It is sort of a cannon that ought now no longer for use to shoot a mouse; however the arsena additionally needs posses sion of cannons, by and larg as a deterrent, and sometimes for shooting.

India is the largest democracy of the world and the right to free speech and expression
is a vital aspect of democracy. The expression or thought that isn’t in consonance
with the policy of the government of the day must now no longer be taken into
consideration as sedition. Section 124A must now no longer be misused as a device
to scale down loose speech. The SC caveat, given in the Kedarnath case, can test its
misuse. It needs to be tested under the modified facts and situations and additionally
at the anvil of ever-evolving tests of necessity, proportionality and arbitrariness.

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Policy & Politics

Tax on ocean freight: A case of inequitable double taxation at its best

Supply of ocean freight service is not covered either by Section 7 (inter-state supply) or Section 8 (intra-state supply) of the IGST Act. The Act does not contemplate levy or collection of tax from a person who is neither the supplier nor the recipient of supply.

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HOW TAX ON OCEAN FREIGHT WORKS

 Ocean Freight is a method of transporting huge quantities of goods through the sea. The levy of taxes on Ocean Freight has been a matter of dispute in India for a while now. The GST law requires the importers to pay tax on ocean freight services under Section 9(3) of the CGST Act and Section 5(3) of the IGST Act, better known as the ‘Reverse Charge Mechanism’.

The location of the Service Provider (SP) and the Service Recipient (SR) must be considered. If the location of the SP and the SR is in India, Section 12(8) applies. But when the Location of SP or SR is outside India, the location of the SR is considered, unless the location of the SP is not known, then the SP’s location is considered but only for transportation [under Section 13(9)]. If the SP and SR are both outside India, the Importer is liable to pay IGST @ 5%. In addition to this, the importer also pays customs duty, freight on the CIF (Cost, Insurance and Freight) value and insurance even if the importer has paid IGST on the CIF value, he is still required to pay GST on ocean freight. This, is what any prudent person would term as “double taxation”.

When it comes to import on the CIF basis, the foreign supplier transports goods from a place outside India through a foreign shipping agency, to a port located in India. In CIF, the freight is paid by the foreign exporter to the shipping agency and the foreign supplier transports such shipment through the foreign shipping agency.

BEFORE GST

 From 01.06.2016, transportation of goods from a place outside India up to the customs clearance station in India became liable to service tax, through the Finance Act, 2016. But an exemption was given for services by way of transportation of goods by an aircraft from a place outside India up to the customs clearance station.

If the service provider was situated outside India, the liability to pay service tax would be on the service recipient. In Free on Board (FoB) imports, service tax would be payable by the shipping line, if the shipping line was based in India; and the service tax would be payable by the importer under reverse charge if the shipping line is not based in India.

In case of CIF imports, there was no service tax levy on freight, as the service provider as well as the service recipient are situated outside India.

There existed ambiguity in levy of service tax that was attracted on ocean freight component only in case of FOB imports, and not attracted for CIF imports.

Vide Notifications dated. 12.01.2017 (Notification 3/2017) and 20.06.2012 (Notification 30/2012 ST), some efforts were made to clear the ambiguities. In addition to this, in respect of services provided or agreed to be provided by way of transportation of goods by a vessel from a place outside India up to the customs clearance station in India, the person liable for paying service tax other than the service provider would be the person in India who complies with sections 29, 30 or 38 read with section 148 of the Customs Act, 1962.

In addition to this a series of Notifications were issued pursuant to the problem at hand:

 1. Vide Notification dated. 13.04.2017 (Notification 2/2017 ST), the definition of “person liable for payment of service tax” under Rule 2 (1) (d) (i) was amended and a new sub rule (Rule 7CA) was introduced in the Service Tax Rules, 1994.

 2. Vide Notification dated. 13.04.2017 (Notification 14/2017 ST), a new rule, Rule 8B was introduced in Point of Taxation Rules, 2011, which spoke about the “Determination of point of taxation in case of services provided by a person located in non-taxable territory to a person in non-taxable territory.”

3. Vide Notification dated. 13.04.2017 (Notification 10/2017 CE NT), the definition of “input service” in the CENVAT Credit Rules, 2004, was amended to further facilitate proper implementation of the respective tax provisions.

The importer was thus made liable to pay service tax for the services of transportation of goods by vessel from a foreign port to Indian port in case of CIF imports.

 The above position continued up to 30.06.2017, i.e., until the introduction of GST.

UNDER GST

 And as per Section 14 of the Customs Act, 1962, the value of the imported goods shall be the transaction value of such goods for the purpose of levy of Customs duty and such transaction value in the case of imported goods shall include, in addition to price, any amount paid or payable for costs and services, including commissions and brokerage, royalties and licence fees, costs of transportation to the place of import, insurance, loading, unloading and handling charges to the extent as per Rule 10(2) of the Customs valuation (Determination of Value of Imported Goods) Rules, 2007.

Section 5(3) of the IGST Act, 2017 empowered the Centre to issue notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and the recipient of such goods or services or both is liable to pay tax under reverse charge in relation to the supply of such goods or services or both.

Where the value of taxable service provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India is not available with the person liable for paying integrated tax, the same shall be deemed to be 10 % of the CIF value of imported goods.

How ocean freight suffers double taxation

Ocean freight component suffers tax twice; first, it suffers IGST as component of Customs Duty on imported goods on CIF basis and second time IGST @ 5% in the form of Import of Services (Reverse Charge Mechanism) for payment by the importer. Therefore, IGST payment is levied twice on Ocean freight in the guise as part of transaction value of imported goods.

The impugned notifications are contrary to the provisions of Article 265 of the Indian Constitution which says that “no tax shall be levied or collected except by authority of law”. A delegated legislation (includes the notifications herein or rules) cannot provide levy or collection of tax which is not authorised by the parent statute.

 Supply of ocean freight service is not covered either by Section 7 (inter-state supply) or Section 8 (intra-state supply) of the IGST Act. The Act does not contemplate levy or collection of tax from a person who is neither the supplier nor the recipient of supply.

A person other than a recipient cannot determine the “time of supply” as per the provisions of Section 13 of the IGST Act. In addition to this, Input Tax Credit can only be availed by the recipient of the supply which are intended to be used in the course of furtherance of business, under the provisions of Section 16 of the Act.

 The Supreme Court in case of State of Rajasthan v. Basant Agrotech (India) Limited [2014 (302) E.L.T. 3 (SC)], held that the rule of construction of a charging section is that before taxing any person, it must be shown that he falls within the ambit of the charging section by clear words used in the section. No one can be taxed by implication. A charging section has to be constructed strictly. If a person has not been brought within the ambit of the charging section by clear words, he cannot be taxed at all.

Commissioner of Central Excise v. Acer India Limited [2004 (172) E.L.T. 289 (S.C.)], the SC held – “The intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic result sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plan, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the statute which will serve the spirit and intention of the legislature. The statute should clearly and unambiguously convey the three components of the tax law i.e. the subject of the tax, the person who is liable to pay the tax and the rate at which the tax is to be paid. If there is any ambiguity regarding any of these ingredients in a taxation statute, then there is no tax in law.”

The Hon’ble Gujarat High Court in the case of Mohit Minerals Pvt. Ltd. Vs. Union of India [Special Civil Application No. 726 of 2018], has set aside IGST on Ocean Freight and held that no tax is leviable under the IGST Act, 2017 on the ocean freight for the services provided by a person located in a non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India and the levy and collection of tax of such ocean freight under the impugned Notifications is not permissible in law and that taxing ocean freight is ultra vires and leads to double taxation.

Despite the attempts of the judiciary in defending the very concept of negating any occurrence of double taxation, the efforts made to amend the imprudent levy of IGST on ocean freight, or so to say, the lack thereof, is still very unsettling.

A person other than a recipient cannot determine the “time of supply” as per the provisions of Section 13 of the IGST Act. In addition to this, Input Tax Credit can only be availed by the recipient of the supply which are intended to be used in the course of furtherance of business, under the provisions of Section 16 of the Act.

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