Unit 9 Legal Aspects of Business PYQ’s 17th Oct 2020 Shift 2

The correct answer is – The person who has sold the goods and has not yet received the price

Key Points

The Sale of Goods Act, 1930 defines an unpaid seller as a seller that has not been paid the full price of the goods that have been sold or that has received a bill of exchange or other negotiable instruments as conditional payment, and the condition on which it was received has not been fulfilled.

Therefore, the meaning of an unpaid seller is the person who has sold the goods and has not yet received the price.

Additional Information

Features of an unpaid seller:

• The seller must have sold the goods on a cash basis and must be unpaid.
• The seller must be unpaid either wholly or partly.
• The decided period of time has expired and the seller is still left unpaid.
• The seller must not refuse to accept the payment.
• The price is paid through a negotiable instrument i.e. bill of exchange, promissory note, cheque, etc. and the same has been dishonored.

The correct answer is – Commercial value

Intellectual Property Rights (IPRs) protect the use of information and ideas that are of Commercial Value.

Important Points

The four types of intellectual property rights include:

1. Trade Secrets
2. Trademarks
3. Copyrights, and
4. Patents

Key Points

The Economic and Commercial Value of Intellectual Property Rights (IPRs): IPRs as a Means of Protecting Business Interests, Encouraging Innovation and Technology Transfer and Promoting Trade and Investment.

• The valuation of IP is therefore essential in the framework of commercial transactions. Unfortunately, this aspect is often overlooked by businesses not experienced with these types of deals resulting in transactions that are either overvalued or undervalued and therefore unprofitable or sometimes disastrous situations leading to bankruptcy
• It is therefore essential to analyze and assess the value of the intellectual property during the negotiation process, before the conclusion of the commercial transaction
• A brand is generally subject to trademark protection.
• Technology can be subject to patent, industrial design, and/or copyright protection
• Other types of intellectual property may also exist

The correct answer is – A, C and E only

These three points are correct with respect to GST:

It is a destination tax

It benefits consuming states more

It is an umbrella tax to improve ease of doing business

Hence option 4 is correct.

Key Points

• The Goods and Services Tax or GST is a major indirect tax reform introduced in India by integrating the major indirect taxes of the centre and states. It is a comprehensive tax levied on the manufacture, sale, and consumption of goods and services. The GST is a destination-based consumption tax made on value addition.
• The GST is a destination tax, it is expected to favour ‘consuming States’ as opposed to the richer ‘producing States’, which supply goods and services to consumers in other states besides their own. Even the IGST collected by the Centre is shared with the State where the good or service concerned is sold, not the one in which it was produced.
• A progressive tax is a tax where the average tax rate, or the total amount of tax paid as a percentage of income, increases as the taxpayer’s income increases. A tax may be progressive if people with higher incomes pay a higher tax rate. A regressive tax is the opposite, where the average tax rate, or amount of tax paid as a percentage of income, decreases as income increases. GST is a regressive tax compared to Income Tax, which is a progressive tax.
• GST aims to simplify indirect taxes so that businesses in India can focus on commercial and operational efficiency. In addition, the new GST regime is expected to give India a face-lift on the global map, and to improve the country’s ranking on the ease of doing business index.

The correct answer is – Both statements are correct

A void contract, also known as a void agreement, is not actually a contract. A void contract cannot be enforced by law. For example, a contract to carry out illegal activity is a void contract or void agreement.

Key Points

Features of a void contract:

• A contract made by incompetent parties is void.
• Any contract with bilateral mistakes is void.
• Contracts that have unlawful object or consideration are void.
• Contract in restraint of marriage of any major person is void.
• Contract in restraint of trade is void.
• Contracts in restraint of legal proceedings are void.
• A contract the term of which is uncertain is void.
• A contract by way of the wager (gambling/betting) is void.
• A contract contingent upon the happening of an impossible event is void.
• A contract to do impossible acts is void.

Therefore, both statements are correct.

The correct answer is – a-ii, b-iii, c-iv, d-i

Below is the explanation of the above-mentioned act:

1. Indian Contract Act, 1872:

• The Indian Contract Act, 1872 defines the term “Contract” under its section 2 (h) as “An agreement enforceable by law”. In other words, we can say that a contract is anything that is an agreement and enforceable by the law of the land.
• The objective of the Contract Act is to ensure that the rights and obligations arising out of a contract are honored and that legal remedies are made available to an aggrieved party against the party failing to honor his part of the agreement.

2. Right to Information Act 2005

• It mandates timely response to citizen requests for government information.
• The basic object of the Act is to empower the citizens, promote transparency and accountability in the working of the Government, contain corruption, and make our democracy work for the people in the real sense.
• It goes without saying that an informed citizen is better equipped to keep necessary vigil on the instruments of governance and make the government more accountable to the governed.
• The Act is a big step towards making the citizens informed about the activities of the Government.

3. Information Technology Act:

• It provides a legal framework for electronic governance by giving recognition to electronic records and digital signatures.
• It also defines cybercrimes and prescribes penalties for them.
• The Act directed the formation of a Controller of Certifying Authorities to regulate the issuance of digital signatures. It also established a Cyber Appellate Tribunal to resolve disputes arising from this new law.

4. Competition Act, 2002:

• The Competition Act, 2002 was enacted by the Parliament of India and governs Indian competition law.
• It replaced the archaic Monopolies and Restrictive Trade Practices Act, 1969. Under this legislation, the Competition Commission of India was established to prevent activities that have an adverse effect on competition in India. This act extends to the whole of India.
• It is a tool to implement and enforce competition policy and to prevent and punish anti-competitive business practices by firms and unnecessary Government interference in the market.

Therefore, the correct match is:

Hence, opton4 is correct.

The correct answer is – A, C, B, D

Option2 is the correct sequence.

Key Points

Section 154 of CGST rules :

Disposal of proceeds of the sale of goods and movable or immovable property.- The amounts so realized from the sale of goods, movable or immovable property, for the recovery of dues from a defaulter shall –

(a) first, be appropriated against the administrative cost of the recovery process;

(b) next, be appropriated against the amount to be recovered;

(c) next, be appropriated against any other amount due from the defaulter under the Act or the Integrated Goods and Services Tax Act, 2017 or the Union Territory Goods and Services Tax Act, 2017 or any of the State Goods and Services Tax Act, 2017 and the rules made thereunder; and

(d) any balance, be refunded to the defaulter.