Page 17 - Banking Finance April 2016
P. 17
LEGAL UPDATE
'Grocery' to include soft SC: If interpretation of a notification leads to absurdity,
drinks, bottled water avoid it
The term 'grocery' would include soft The Supreme Court has stated that if VAT Act and notifications, which af-
drinks and bottled water, not merely the interpretation of a notification on fected the benefits granted originally.
value-added tax leads to an absurdity,
food items, the it should be avoided. The court stated It led to multiple litigations, mainly on
Supreme Court so in its judgment, State of Jharkhand the issue whether a dealer enjoying
stated extending vs Tata Steel Ltd, where the benefit of tax exemption is allowed
the meaning of the company demanded
the word gro- benefits under the to convert the facility from
cery. This interpretation would ben- Jharkhand Value Added payment of tax into the fa-
efit manual labourers in Tax Act. cility of deferment.
Maharashtra, as the court has dis-
missed the appeal, PepsiCo India The company's unit was The company sought 13
Holding P Ltd vs Grocery Market & originally in Bihar but years for repayment from
Shops Board, against the Bombay after the bifurcation of the time of grant of benefit.
high court judgment. the state, it fell into the The court stated that "such
new state of Jharkhand. interpretation not only
The loaders got only wages and were causes serious violence to
deprived of provident fund contribu- While the Bihar government had the language employed in the notifica-
tion, paid holidays, house rent, granted certain sales tax benefits as tion but if it is allowed to be understood
workmen's compensation, bonus incentives for the company to invest in in such a manner, it shall lead to an ab-
and other medical benefits. It was to the state under the industrial policy, surd situation." The court reduced the
protect such workers that the wel- the Jharkhand government passed the period to five years in the facts of the
fare legislation titled Maharashtra case.
Manual Workers Welfare Act and a
scheme were introduced. When the Pained terminated employees can move to court in job
authorities applied the law to
PepsiCo, which produces soft drinks place or HQ
like Pepsi, Mirinda, 7 Up and mineral
water, it objected to it and moved The Supreme Court has set aside the moved the Puducherry labour court as
the Bombay high court. judgment of the Bombay High Court he was employed there. The labour
and ruled that an em-
PepsiCo's argument was that the ex- ployee aggrieved by his court rejected the argu-
pression grocery would only com- termination can move the ment, but the industrial
prise articles, which are required as labour court where he court and the high court
daily necessities such as oil and grain had been employed or ruled that Puducherry was
in households, and not soft drinks. where the company head- the place to tackle the
quarters is located. labour dispute. On ap-
The high court dismissed the petition peal, the Supreme Court stated that he
stating that "Now-a-days, soft drinks In this case, Nandram vs Garware could move court in either place.
are available in the grocery shops Polyster Ltd, a supervisor was em-
and supermarkets. They are items of ployed in the Puducherry unit by the He was terminated in Puducherry; so he
food and, therefore, they are all gro- firm with corporate office in could move the court there. "But that
cery items. In all the manufacturing Aurangabad. The unit was closed and does not mean that the labour court in
process, loading and unloading activi- there was dispute over his termina- Aurangabad within whose jurisdiction
ties are carried out, which are the tion. He moved the Aurangabad the management is situated and where
activities of the manual workers." The labour court. the decision to close down the unit at
Supreme Court upheld this view to Puducherry also does not have the ju-
the benefit of manual workers. The firm argued that he should have risdiction," the judgment said.
BANKING FINANCE | APRIL | 2016 | 17
