Saroj K. Datta vs R.L. Thapliyal
2009 Latest Caselaw 833 Del

                        IN THE HIGH COURT OF DELHI AT NEW DELHI


                                                    Order reserved: February 2, 2009
                                                    Date of decision: March 16, 2009


                        CRL.M.C. No. 1414 of 2008 & CRL.M. No. 5301 of 2008


                        SAROJ K. DATTA                          ..... Petitioner
                                      Through : Mr. Siddharth Luthra, Senior
                                      Advocate with Mr. U.A. Rana, Ms.
                                      Arundhati Katju, Mr. Sanjay Pal &
                                      Mr. Abhishek Rao, Advocates

                                     versus

                        R.L. THAPLIYAL                                ..... Respondent
                                              Through: Mr. Satish Aggarwala, Advocate

                        CORAM:
                        HON'BLE DR. JUSTICE S.MURALIDHAR

                        1. Whether Reporters of local papers may be
                          allowed to see the judgment?                      No
                        2. To be referred to the Reporter or not?           Yes
                        3. Whether the judgment should be reported in Digest? Yes

                                       JUDGMENT

Dr. S.Muralidhar, J:

1. The prayer in this petition under Section 482 of the Code of

Criminal Procedure 1973 („CrPC‟) is for quashing of Complaint Case

No. 16/08 titled R.L. Thapliyal v. Saroj K. Datta pending in the court

of the learned Metropolitan Magistrate („MM‟), Delhi under Sections

174 and 175 of Indian Penal Code („IPC‟) and all proceedings

consequent thereto. The petition also challenges an order dated 7th

March 2008 passed by the learned MM summoning the Petitioner for

the aforementioned offences.

2. The aforementioned complaint was filed by R.L.Thapliyal the

Senior Intelligence Officer, Directorate General of Central Excise

Intelligence („DGCEI‟) New Delhi. In para 2 of the complaint it was

stated that the complainant is a competent person as required under

Section 14 of the Central Excises Act 1944 (CE Act), as made

applicable in respect of Service Tax matters vide Section 83 of the

Finance Act 1994.

3. The complaint states that DGCEI is investigating a case of non-

payment of Service Tax by Sahara Airlines Limited [„SAL‟] (now

Jetlite India Limited) [„JIL‟] which was providing taxable services to

Sahara India Commercial Corporation Limited („SICCL‟) but was not

discharging the service tax liability on the amounts received.

According to the complainant, the documents obtained from SAL

revealed that SAL was rendering taxable services to SICCL for which

they received more than Rs.1400 crores from SICCL during the

period 2003-04 to 2006-07 and the service tax liability was estimated

more than Rs.100 crores.

4. According to the complainant, since Saroj K. Datta (Petitioner) is

presently the Director and authorized signatory of JIL, "his statement

was necessary" and constituted crucial evidence in the case against

SAL. The Petitioner was therefore issued summons dated 27th

December 2007 for his appearance before the Complainant on 14th

January 2008. He was also asked to submit documents. However, the

petitioner failed to appear. Instead he sent a letter dated 14th January

2008 stating that he had been appointed Director of JIL with effect

from 20th April 2007 consequent upon the change in management and

that since the service tax enquiry related to the period prior to the

change of management, he was neither aware of the facts nor had

knowledge of the concerned transactions. The complaint

acknowledges that the Petitioner stated in the said letter that prior to

the change in management of JIL Shri R.S. Dubey of the Sahara

Group was the authorized signatory and was aware of the entire facts

and would therefore be able to explain the matter. The Petitioner

asked his reply to be treated by the Complainant as sufficient

compliance of the summons issued to him.

5. Another summons dated 15th January 2008 requiring the Petitioner

to appear on 23rd January 2008 was issued by the Senior Intelligence

Officer. This time, Shri J.P Tiwari, Manager of JIL sent a letter dated

23rd January 2008 stating that the Petitioner had been appointed as

Director of JIL with effect from 20th April 2007 and that he was in the

process of discussing the service tax issues with the earlier

management to enable him to take stand on behalf of the company.

Accordingly, time was sought. Another summons was issued on 23 rd

January 2008 for the appearance of the Petitioner on 29th January

2008. This time also he sent a letter reiterating that the enquiry

relating to the period prior to the change of management and the

Petitioner had been appointed as Director and he was not aware of the

facts and requested that the reply sent by him be treated as sufficient

compliance of the summons issued to him. The Senior Intelligence

Officer issued another summons dated 4th February 2008 for the

appearance of the Petitioner on 13th February 2008. A reply to the

summons was sent on 13th February 2008 by JIL stating that the

Petitioner was pre-occupied in the company affairs and would appear

in person on 18th February 2008. The Petitioner did appear before the

Deputy Director, DGCEI, New Delhi on 18th February 2008 and

requested that his statement to be recorded on 22nd February 2008. On

22nd February 2008 the petitioner sent by fax a letter and did not

appear in person. On the above basis of the above averments the

Complainant filed the aforementioned complaint in the court of the

learned MM on 5th March 2008 contending that the Petitioner had

committed offences punishable under Sections 174 and 175 IPC. The

summons was issued by the learned MM by an order dated 7 th March

2008 which has been challenged in the present petition before this

Court.

6. On the first date of hearing of this case on 2nd May 2008, the

following order was passed by this Court:

"The present petition has been filed under Section 482 Cr.P.C. for quashing of Complaint Case No.

16/2008 pending before the court of Shri Praveen Singh, Metropolitan Magistrate, Patiala House New Delhi as well as the impugned order dated 7 th March 2008.

Learned counsel for the Petitioner states that the service tax inquiry being conducted by the respondent relates to the period prior to the change in Management of the company and therefore, the petitioner is neither aware of the facts nor has knowledge of the modus operandi of the concerned transactions. Mr. Luthra, learned Senior Advocate for the Petitioner states that the Petitioner had in fact appeared in person before the Respondent on 18th February 2008. Mr. Luthra further states that the Petitioner is even otherwise ready and willing to appear before the Respondent.

Mr. Aggarwal appears for the Respondent and he makes a statement that the Respondent is willing to record Petitioner‟s statement on any date convenient to the Petitioner. On instructions Mr. Luthra states that he would appear before the Respondent on 7th May 2008 at 100 AM on which date the Respondent would record the Petitioner‟s statement. In case the investigation is not over on that particular date, the Petitioner would appear on any subsequent date that is mutually convenient to the Petitioner and respondent.

List the matter on 7th May 2008 at 2.00 PM."

7. Thereafter on 7th May 2008 the following order was passed:

"Mr. Agarwal, learned counsel for the Respondent states that the Petitioner has appeared before the Respondent today. The Petitioner‟s statement is in the process of being recorded under Section 14 of Central Excise Act. Mr. Luthra, learned counsel for the Petitioner, on instructions states that the Petitioner will fully cooperate with the investigation and would appear on any subsequent date that may be mutually fixed between the Petitioner and the respondent.

Issue notice. Mr. Aggarwal accepts notice on behalf of the respondent. Mr. Aggarwal prays for two weeks time to file a reply.

List the matter on 29th May 2008.

Till the next date of hearing I stay the proceedings in Complaint No. 16/2008 pending before Sh. Praveen Singh, MM, Patiala House, New Delhi. Dasti under the signature of Court Master."

8. On 21st January 2009 this Court required the learned counsel for

Respondent to ascertain if the Petitioner was required to appear

further before the officer concerned and the interim stay was directed

to be continued. At the next hearing Mr. Satish Aggarwala, learned

counsel for the Respondent submitted that though the presence of the

petitioner may not be further required, the investigations were

inconclusive and therefore the Complaint would neither be rendered

infructuous nor could it be quashed on the ground that the petitioner

had been appearing before the Complainant pursuant to the orders of

this Court. Consequently, the arguments on merits were finally heard

by this Court.

9. It is submitted by Mr. Luthra, learned Senior counsel appearing for

the Petitioner that in the first instance the complaint itself was not

maintainable since it was not filed by a person duly authorized in

terms of Rule 3 of the Service Tax Rules 1994 which requires a

special notification to be issued appointing a Central Excise Officer to

exercise the powers conferred under Chapter V of the Finance Act

1994. It is stated that the Respondent failed to furnish along with the

Complaint or even before the learned MM a copy of any such

notification.

10. It is next submitted that even if the averments in the complaint are

taken to be true, they do not make out a prima facie case for

proceeding against the petitioner for the offences under Sections 174

and 175 IPC. Mr. Luthra points out that notices are in a standard

format which do not specify the document to be produced by the

noticee. The summons in question require the noticee to attend the

office of DGCEI, "to give evidence, to make statement and/or produce

the documents and things" mentioned in the schedule "for

examination." The schedule to the summons simply states "for

tendering evidence." Since no documents were asked to be produced,

the question of applicability of Section 175 IPC would not arise.

Reliance is placed upon the decision of this Court in Meera Kapoor v.

State & Another 2008 [2] JCC 829.

11. It is next submitted that as regards the summons dated 27 th

December 2007 addressed to the Petitioner it was in fact not served on

the Petitioner but on J.P. Tiwari. A reply to the said letter was indeed

sent by the Petitioner on 14th January 2008 as stated in the complaint.

The explanation by the Petitioner showed that there was no deliberate

intention of not appearing before the Complainant. It is pointed out

that the next notice dated 15th January 2008 was also served on J.P.

Tiwari and not the Petitioner. It was J.P. Tiwari who sent a reply on

23rd January 2008. The third notice dated 23rd January 2008 addressed

to the Petitioner was also not served on the Petitioner. It was J.P.

Tiwari who sent a reply on 29th January 2008. The fourth notice dated

4th February 2008 was addressed to O.P. Srivastava, Director of SAL

and not to the Petitioner at all. Reply was sent again by J.P. Tiwari on

13th February 2008.

12. The Petitioner does not deny that he appeared before the Deputy

Director, DGCEI on 18th February 2008 and further sent a letter dated

22nd February 2008 wherein inter alia it was stated as under:

"3. Since the receipt of your notice, we have consulted our lawyers and advisors including the ex-Solicitor General of India who have advised us that the basis on which summons have been issued to us are on mere technical grounds. Accordingly,

they are of the opinion that this issue is wide open for interpretation. Accordingly we have been advised that there is no requirement for us to make any payment prior to the due process being followed. I am also advised that the recording of a statement of any person is by way of evidence - I have no personal knowledge of my facts that would be relevant for obvious reasons. The question of my making a "statement" in response to your summons on whether we would agree to pay tax, I am advised, does not arise.

4. During my meeting with you on 18th February 2008, you specifically asked me to confirm our willingness to pay (under protest) and schedule of such payment. In this respect, we would like to submit that we have briefed our Board of this matter and our Board, in turn, has decided to engage a team of lawyers and advisors to handle the matter. However, if you feel that it is necessary for me to meet you, I will make my courtesy visit at any date suitable to you during the next week.

However, we will extend our full cooperation and support to your department in this matter."

It is submitted that in the background of the above facts it cannot be

said that the Petitioner was deliberately avoiding the summons which

was an essential ingredients of Sections 174 & 175 IPC.

13. In reply Mr. Aggarwala learned Senior standing counsel for the

Department produced a copy of the notification No. 3/2004-S.T. dated

11th March 2004 as corrected by Corrigendum F. No. 137/14/2003-

CX,4 dated 29th March 2004 in terms of which the Superintendent,

Central Excise Intelligence has been appointed in terms of Rule 3 of

the Service Tax Rules 1994 read with Section 65 (4) of the Finance

Act 1994 as Central Excise Officer and invested with all the powers

exercisable by the Chief Commissioner of Central Excise. It is

submitted that the Complainant accordingly was duly authorized in

terms of the Finance Act 1994 to file a complaint. It is pointed out that

in another case investigated by the Delhi Zonal Unit of DGCEI the

petitioner did not appear in compliance of summons issued to him in

that case. The summons was issued to the Petitioner pursuant to the

show cause notice issued to JIL by the Additional Director (G)

DGCEI on 2nd/3rd October 2008 in relation to non-payment of service

tax amounting to Rs.1,42,45,93,066/- during the period from July

2003 to January 2007. It is submitted that despite several summons as

indicated hereinabove, the Petitioner had failed to appear before the

officers and therefore, it cannot be said that not even a prima facie

case under Section 174 IPC was made out against the Petitioner. As

regards the offence under Section 175 IPC although Mr. Aggarwala

does not dispute that fact that schedule to the notice does not indicate

the documents required to be produced. He submits that since the

Petitioner never appeared before the officer, the occasion for requiring

any document to be produced does not arise.

14. The submissions of learned counsel on both sides have been

considered.

15. As regards the competence of Respondent No.1 to file the

complaint, Section 65 (4) of the Finance Act 1994 defines "Central

Excise Officer" to have the same meaning as in the Section (2)(b) of

the CE Act. In terms of Section 94 of the Finance Act, the Central

Government has the power to make rules for carrying out the

provisions of that Chapter. In terms thereof the Service tax Rules

1994 have been made. Rule 3 thereof states that "the Central Board of

Excise and Customs may appoint such Central Excise Officers as it

thinks fit for exercising the powers under Chapter V of the Finance

Act 1994 within such local limits as it may assign to them as also

specify the taxable service in relation to which any such Central

Excise Officers shall exercise his powers." While it is true that

summons issued in the present case to the Petitioner by the

Respondent merely states that the Petitioner has been summoned

under Section 14 CE Act, it is seen that the said provision has been

made applicable to service tax matters vide Section 83 of the Finance

Act 1994. The notification dated 11th March 2004 as amended by the

subsequent notification dated 29th March 2004 has been issued

specifically in terms of Rule 3 of the Service tax Rules read with 65

(4) of the Finance Act 1994. It designates the Superintendent, Central

Excise Intelligence as a Central Excise Officer and invests him with

the powers of the Superintendent of Central Excise for whole of India

and it stipulates that such powers are the "powers of a Central Excise

Officer conferred under Chapter V of the Finance Act 1994 and the

Service Tax Rules 1994 regarding any taxable service." The

Respondent R.L. Thapliyal has signed all summons as "Senior

Intelligence Officer/Superintendent, Central Excise. In the

circumstances, there is no merit in the contention of the Petitioner that

R.L. Thapliyal was not competent to authorized to issue summon and

consequently filed the complaint. The first issue is, therefore,

answered against the Petitioner.

16. The second issue concerns Section 175 IPC which reads as under:

"Section 175: Omission to produce to document or electronic record to public servant by person legally bound to produce it : Whoever, being legally bound to produce or deliver up any document or Electronic Record of any public servant, as such, intentionally omits so to produce or deliver up the same, shall be punished with simple imprisonment for a term which may extend to one month, or with fine which may extend to five hundred rupees, or with both;

Or, if the document or Electronic Record is to be produced or delivered up to a Court of Justice, with simple imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both."

17. It is plain from a reading of the above provision, that the offence is

attracted only in the event that a person, who is legally bound to

produce or deliver up any document or Electronic Record of any

public servant, as such, intentionally omits to do so. Where no such

document has been asked to be produced by the public servant, the

question of the applicability of Section 175 IPC does not arise. In each

of the summons referred to hereinabove issued by the Respondent to

the Petitioner, there is no description of any document in the schedule

to the summons although in the body of the summons it is stated that

the Petitioner should produce documents. The schedule simply states

"for tendering evidence". There is no failure by the Petitioner to

produce any documents. No such document has been asked to be

produced by the Respondent. Consequently there is no question of

even a prima facie case being made out for summoning the petitioner

for the offence under Section 175 IPC.

18. The third issue concerns the offence under Section 174 IPC. The

requirement under that provision is that the person concerned should

intentionally omit to appear before the public servant in response to

summons issued by such public servant who is legally competent as

such public servant to issue summons. The question is whether on the

facts and circumstances of the present case, the Petitioner

intentionally failed to comply with the summons issued by the

Respondent.

19. On reading of the entire complaint this Court is unable to discern

any intentional or deliberate omission on the part of the Petitioner to

respond to the summons. The background of the case shows that the

alleged offence of payment of service tax by SAL was pertained to the

period prior to its take over by JIL. It is true that the summons dated

27th December 2007 was not received by the Petitioner but by J.P.

Tiwari. A reply thereto was nevertheless sent by the Petitioner. The

second summons dated 15th January 2008 was addressed to the

Petitioner received by J.P. Tiwari and reply sent by J.P. Tiwari on 23 rd

January 2008. The third summons dated 23rd January 2008 which was

addressed to the Petitioner and replied to by J.P. Tiwari on behalf of

the Petitioner. The fourth summons dated 4th February 2008 was

addressed to O.P. Srivastava, Director. The letter dated 18 th February

2008 merely indicates that the Petitioner attended the office of Deputy

Director, DGCEI and requested that his statement be recorded on 22nd

February 2008. Thereafter on 22nd February 2008 the Petitioner wrote

a further letter explaining why he was not prepared to make a

statement.

20. It appears to this Court on a conspectus of the above facts that the

Petitioner could not be said to have deliberately avoided answering

the summons or attending the office of DGCEI. Further, whatever

may have been the position about the appearance of the Petitioner

before the DGCEI earlier to the filing of the present petition, he did

appear before the DGCEI pursuant to the order dated 2nd May 2008 of

this Court. The petitioner has also expressed his willingness to appear

before the Respondent thereafter as well. In the circumstances, the

filing of the complaint for the offence under Section 174 IPC by the

Respondent against the Petitioner was really not warranted. In the

facts and circumstances of the present case, this Court holds that not

even a prima facie is made out against the Petitioner for the offence

under Section 174 IPC.

21. Accordingly, the Complaint Case No. 16/08 titled R.L. Thapliyal

v. Saroj K. Datta pending in the court of the learned MM Delhi under

Sections 174 and 175 of IPC and all proceedings consequent thereto

including the order dated 7th March 2008 passed by the learned MM

summoning the Petitioner for the aforementioned offences are hereby

quashed.

22. The petition is accordingly allowed and the application is disposed

of. A certified copy of this order be sent to the learned MM concerned

forthwith.

S. MURALIDHAR, J.

MARCH 16, 2009 rk