Legal News | 20 September

Supreme Court: Dividend Income from Indian Entity’s Oman Establishment with ‘Permanent Establishment’ Status under DTAA Exempt from Indian Taxation

In a significant ruling, the Supreme Court of India has held that dividend income received by an Indian entity from its establishment in Oman, possessing a ‘Permanent Establishment’ status under the Double Taxation Avoidance Agreement (DTAA), will not be taxable under Indian tax laws. This decision is grounded in Oman’s tax laws, which exempt dividend distributions from income tax, even for tax-exempt companies.

The Court emphasised that the establishment in Oman had consistently been treated as a Permanent Establishment for around a decade, making it eligible for tax exemption under the DTAA’s provisions. The ruling affirms the importance of international tax agreements in cross-border financial transactions.

Women’s Reservation Bill and the Vision of India’s Founding Mothers

The proposed Constitution (One Hundred and Twenty Eighth Amendment) Bill, 2023, also known as the Women’s Reservation Bill, is stirring conversations as it seeks to reserve one-third of seats for women in various legislative bodies. This significant move aims to boost women’s political representation. Interestingly, it was the first bill tabled in the new Parliament building, symbolising gender justice.

Reflecting on the Constituent Assembly debates, where 15 remarkable women representatives, often overlooked, played vital roles, it’s evident that they emphasised merit over reservations. Founding mother Hansa Mehta stressed equality of opportunity, not special treatment, while others, like Renuka Ray, voiced opposition to reservations, fearing it might overshadow women’s competence. Today, questions linger about the low women’s representation, hinting at the need for change.

Supreme Court Emphasises Eyewitness Testimony in Criminal Trials Over Medical Evidence

In a recent judgment, the Supreme Court has reinforced the significance of eyewitness accounts in criminal trials. The Court cited previous cases to underscore the importance of ocular evidence over medical expert opinions. It stressed that even if there are inconsistencies between eyewitness accounts and medical evidence, the former holds substantial weight in establishing the sequence of events. The case involved a murder conviction where the trial court had initially acquitted the accused based on medical evidence, but the High Court later reversed the acquittal.

The Supreme Court held that minor contradictions in witness statements should not negate the prosecution’s case and emphasised the need to avoid undue reliance on fanciful doubts when considering the benefit of the doubt. Consequently, the conviction was upheld and the appellant was directed to surrender before the trial court.

Supreme Court Refers Question of MPs/MLAs’ Immunity in Bribery Cases to 7-Judge Bench

The Supreme Court has referred the issue of whether Members of Parliament (MPs) and Members of Legislative Assemblies (MLAs) enjoy immunity from prosecution in cases of bribery related to parliamentary votes and speeches to a seven-judge bench. The reference is based on the judgment in PV Narasimha Rao v State (1998), which held that legislators were immune from prosecution in such cases as per Article 105(2) and Article 194(2) of the Indian Constitution. However, the judgment clarified that this immunity only applied if legislators carried out the act for which they had taken a bribe. The case in question pertains to Sita Soren, a member of the Jharkhand Mukti Morcha, accused of accepting a bribe for a vote in the 2012 Rajya Sabha Elections.

Delhi High Court Directs WhatsApp and Telegram to Deactivate Groups Selling Pirated Movie Copies

The Delhi High Court has directed Meta (owner of WhatsApp) and Telegram to deactivate all WhatsApp groups and Telegram channels that are distributing or selling pirated copies of the Bollywood movie “Jawan,” starring Shah Rukh Khan. The court also ordered WhatsApp, Telegram and several mobile network operators to disclose subscriber information, including user names and addresses, for the phone numbers involved in these activities, to enable legal action against them. This decision came in response to a plea from the movie’s producer, Red Chillies Entertainment.

The court took strong action against an individual named Rohit Sharma, who was identified by Red Chillies for selling illegal copies of the film at a low price through WhatsApp. It ordered Meta to deactivate Sharma’s WhatsApp number and remove his WhatsApp group, Facebook and Instagram pages. Similar actions will be taken against administrators of other WhatsApp groups and Telegram channels once they are identified.

Red Chillies Entertainment has engaged anti-piracy agencies and agents to search for pirated copies of the film on messaging platforms like WhatsApp and Telegram and on social media. They have also filed a police complaint against individuals involved in the illegal circulation of the movie.

Supreme Court to Begin Final Hearing on Challenge to Section 6A of Citizenship Act

The Supreme Court has announced that it will commence the final hearings in petitions challenging the constitutionality of Section 6A of the Citizenship Act on October 17. A Constitution Bench, including Chief Justice of India DY Chandrachud and other Justices, urged the parties involved to adhere to the Standard Operation Procedure (SOP) used in the Article 370 case.

The court ordered the preparation of a common compilation in a specific format and the creation of a common index. Soft copies of the common compilation should be prepared within two weeks, followed by written submissions a week later.

Section 6A of the Citizenship Act deals with the registration of people who entered India between January 1, 1966 and March 25, 1971 and have been residing in Assam. The outcome of this case will have significant implications for the National Register of Citizens (NRC) list.

National Testing Agency (NTA) to Conduct CLAT in Regional Languages

The National Testing Agency (NTA) has informed the Delhi High Court that it is capable of conducting the Common Law Admission Test (CLAT) in vernacular languages in addition to English. Currently, CLAT, which determines admission to 22 national law universities for LLB and LLM courses, is conducted only in English.

In its affidavit, NTA stated that it conducts examinations like NEET-UG and JEE in multiple languages and it possesses a pool of experts and translators for various subjects to prepare question papers in different languages. The NTA asserted that CLAT (UG) question papers could be translated into languages such as Assamese, Bengali, Gujarati, Hindi, Kannada, Malayalam, Marathi, Odia, Punjabi, Tamil, Telugu and Urdu, along with the design and printing of OMR Answer Sheets.

However, NTA mentioned that if it were to conduct CLAT (UG) in 2024, it would likely take place in the third or fourth week of January 2024, as adequate time is required for question paper development, translation, proofreading, vetting, finalising exam centers, logistics and other preparations.

The NTA also suggested the possibility of conducting CLAT (UG) in Computer-Based Test (CBT) mode, similar to JEE (Main) and CUET (UG), in consultation with the Consortium of National Law Universities.

This development came in response to a public interest litigation (PIL) filed by a law student named Sudhanshu Pathak, who advocated for conducting CLAT in regional languages alongside English.

The Bar Council of India (BCI) has also expressed its willingness to conduct CLAT in regional languages to ensure that deserving candidates are not deprived of the opportunity due to language proficiency. The BCI cited its experience in conducting similar exams, such as the All India Bar Examination, in a fair and transparent manner. The Central government has also granted its approval for conducting CLAT in regional languages.

Right to Seek Remission as a Fundamental Right? Supreme Court Questions Convicts

The Supreme Court has raised a fundamental question in the Bilkis Bano gang rape case, asking whether the right of a convict to seek remission of their prison sentence falls under any of the fundamental rights guaranteed by the Indian Constitution. The case involves petitions challenging the early release of convicts who had gang-raped Bilkis Bano and murdered her family members during the 2002 Gujarat riots.

The bench of Justices BV Nagarathna and Ujjal Bhuyan questioned whether an Article 32 petition, which is filed for the enforcement of fundamental rights, could be filed by convicts seeking remission. Senior Advocate V Chitambaresh, representing one of the convicts, argued that such petitions should be filed under Article 226, which are filed before High Courts and are maintainable only for convicts whose fundamental rights have been affected.

Justice Bhuyan then inquired whether the right to seek remission is a fundamental right. Chitambaresh responded that seeking remission is not a fundamental right and therefore, Article 32 petitions filed by convicts in this regard would not be maintainable.

The hearing is set to continue on October 4, when the verdict is expected to be reserved after hearing rejoinder submissions by the petitioners.

The case revolves around the Gujarat government’s decision to grant remission to 11 convicts in the Bilkis Bano case following a Supreme Court judgment in May 2022. This decision led to a series of petitions challenging the grant of remission, including public interest litigation pleas and a petition by Bilkis Bano herself.

The Supreme Court has been examining whether the convicts received preferential treatment in their premature release from prison and the selective application of remission policies. The Court has also emphasised the importance of holistically considering applications for premature release and not mechanically relying on a trial judge’s opinion in remission decisions.

Supreme Court to Examine Validity of Law Extending SC/ST Quota Seats for MPs, MLAs

The Supreme Court has announced that it will examine the constitutional validity of the 104th Amendment of the Indian Constitution, which extended the duration of reservation of seats in the Lok Sabha and state assemblies for Scheduled Castes (SC) and Scheduled Tribes (ST) for another 10 years. This decision comes shortly after the Women’s Reservation Bill was introduced in the Lok Sabha.

A five-judge bench, led by Chief Justice of India DY Chandrachud, will conduct the hearings on November 21. The court clarified that it will not delve into the validity of previous extensions granted for SC/ST reservations through earlier amendments.

The two key issues framed for consideration during the hearing are:

1. Whether the Constitution (104th Amendment) Act 2019 is unconstitutional.

2. Whether the exercise of constituent powers of amendment to extend the period prescribed for the expiration of the period of reservations under Article 334 is constitutionally valid.

Senior Advocate C Aryama Sundaram emphasised the need to determine if the reservation of seats for one community at the expense of another violates the basic structure of the Constitution.

The 104th Amendment Act in 2019 extended political reservations for SC/ST communities for another decade. The quota for Anglo-Indians was also removed with this amendment.

The bench has asked all parties involved to submit a common compilation of documents by October 17 and has scheduled a detailed hearing for November 21. The case involves petitions filed in 2000 challenging the Constitution (79th) Amendment Act, 1999, which initially extended political reservations for SC/ST communities for an additional 10 years.

Article 334 of the Constitution initially called for the cessation of seat reservations in 1960 but has been extended multiple times through subsequent amendments, with the 104th Amendment extending it until 2030.