Madras High Court

M. Ganesan vs The Additional Deputy Commercial ... on 21 October, 2021

                                                                          CRL. O.P. NOS.20632-20634/2018

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                      DATE : 21.10.2021

                                                          CORAM

                                  THE HONOURABLE MR. JUSTICE M.DHANDAPANI

                                   CRL. O.P. NOS.20632 TO 20634 OF 2018
                                                      and
                          CRL.M.P.Nos.11094, 11095, 11096, 11097, 11098 & 11099 of 2021


                          M. Ganesan                                      ... Petitioner

                                                            - Vs -

                        The Additional Deputy Commercial Tax Officer,
                        Intelligence Wing,
                        Commercial Tax Department,
                        100 feet Road,
                        Pudupalayam,
                        Puducherry-605005.                         ... Respondent

PRAYER:Criminal Original Petitions have been filed under Section 482 of Cr.P.C, to call for the records in CC Nos.7/2018, 618 of 2009 & 304 of 2008 on the filed of the Learned Judicial Magistrate No-I, Puducherry and quash the same.

For Petitioner : Ms. V. Meenakshi for M/s.Gnanadesikan Law Associates

For Respondent-1 : Mr. V. Balamurugane, Additional Public Prosecutor, Pondicherry.

https://www.mhc.tn.gov.in/judis

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COMMON ORDER These Criminal Original Petitions have been filed to quash the

criminal cases, which have been launched by the respondent relating to the

respective assessment years in which tax has been failed to be paid in full in

which penalty proceedings have been invoked resulting in levy of penalty

and payment of the escaped tax.

2. It is the case of the petitioner that for the assessment year 2001-

2002 and 2002-2003 the petitioner had submitted the respective A-2 return

and A-9 return to the Commercial Tax Department, Puducherry, along with

payment of necessary turnover tax, which were duly processed and

approved. Insofar as the assessment year 2006-2007, the return filed by the

petitioner was rejected and, accordingly, notice for the period 2001-2002 and

2002-2003 and pre-assessment notice for the assessment period 2006-2007

was issued to the petitioner relating to suppression of turnover and relating

to escaped turnover on the basis of the details obtained from Indian Oil

Corporation. It is the case of the petitioner that as he was very sick and was

undergoing treatment for very many medical complications, he had requested

the respondent that they may be some calculation error in the escaped

turnover and had deputed his Manager to attend to the issue. However, the https://www.mhc.tn.gov.in/judis

CRL. O.P. NOS.20632-20634/2018

Commercial Tax Officer, after conducting enquiry, passed the respective

impugned orders calculating the tax and also levying penalty at 100%.

3. It is the further case of the petitioner that the petitioner filed appeal

without paying the mandatory 25% of the difference of tax assessed and due

to the non-payment of the amount, the appeal was dismissed, which was

challenged by filing writ petition and the same was also dismissed.

Thereafter, by order dated 15.12.2005, sanction was accorded to prosecute

the petitioner based on which complaint was filed before the learned Judicial

Magistrate, Puducherry, which was taken on file and assailing the same, the

present petitions have been filed.

4. Learned counsel appearing for the petitioner submitted that the

petitioner has not committed any offence as claimed by the respondent. It is

the further submission of the learned counsel for the petitioner that the

period for which assessment is sought to be reopened, the petitioner was not

in possession of the requisite materials due to efflux of time and even the

respondent has passed the assessment order based on the best of judgment on

the materials available with it, however, it is the submission of the learned

counsel for the petitioner that the error between the figures furnished by the https://www.mhc.tn.gov.in/judis

CRL. O.P. NOS.20632-20634/2018

petitioner and the Indian Oil Corporation cannot be put against the petitioner

and that the 'C' Forms, which according to the respondent has not reflected

the correct turnover position was signed and left with the Indian Oil

Corporation and errors in the same cannot be the basis to take action against

the petitioner.

5. It is the further submission of the learned counsel for the petitioner

that the sanction for prosecution has been given without proper application

of mind by the Commissioner, when very many offences of penal nature

have been sought to be fastened against the petitioner. It is the submission

of the learned counsel for the petitioner that the order of the sanctioning

authority does not disclose the basis and the materials on which the sanction

order has been passed. It is further submitted on behalf of the petitioner

that the complaint filed by the respondent against the petitioner does not

disclose the offences made out excepting repeating the Section and the best

of judgment order and there is no whisper as to how the petitioner is liable to

be prosecuted for the said offences.

6. It is the further submission of the learned counsel for the petitioner

that Section 18 (1) of the Central Sales Tax Act prescribes a period of 5 https://www.mhc.tn.gov.in/judis

CRL. O.P. NOS.20632-20634/2018

years to determine the best of judgment assessment on turnover from the

expiry of the year for which the tax relates. In the case on hand, the

assessment pertains to the period 2000-2001 and 2001-2002 and escaped

turnover notice was issued and order passed in the year 2006 and, therefore,

the limitation of five years having expired, no prosecution could be made

against the petitioner.

7. It is the further submission of the learned counsel for the petitioner

that though penalty could be levied upto 150%, however, the reason for

levying the requisite percentage of penalty ought to be discussed. However,

in the case on hand, the penalty order does not reveal the basis on which the

penalty is quantified and that being the case, the order passed by the

authority, without any proper reasoning is unsustainable, more so when there

is no clear finding that the failure to disclose the correct turnover was wilful

and wanton.

8. The basis of the prosecution under the repealed Act, which has been

substituted with the Puducherry Value Added Tax Act, 2007, which came

into force with effect from 3.12.2007 is also pressed into service to assail the

penalty order passed by the respondent and also the prosecution launched https://www.mhc.tn.gov.in/judis

CRL. O.P. NOS.20632-20634/2018

against the petitioner. Due to the very many inherent improbabilities and

also on the question of limitation and other facts as mentioned above, it is

prayed that the present petitions to quash the case is liable to be allowed.

9. Per contra, counter has been filed by the respondent and the learned

standing counsel appearing for the respondent, adverting to the counter

submitted that the petitioner, without exhausting the remedies available

under the relevant provisions of law, cannot come before this Court under

Section 482 Cr.P.C. and seek quashment of a criminal case, as the criminal

court is not vested with jurisdiction to pass any orders. It is the further

submission of the learned standing counsel for the respondent that the

assessment order having not been challenged in a manner known to law and

having allowed the assessment order and proceedings to survive, the

petitioner is estopped from questioning the prosecution initiated against him.

10. It is the further submission of the learned standing counsel for the

respondent that the Commissioner, after satisfying himself has passed the

order according sanction for prosecution and merely because the order is not

to the liking of the petitioner or that it does not speak about the documents,

which have been relied upon to arrive at the subjective satisfaction, the same https://www.mhc.tn.gov.in/judis

CRL. O.P. NOS.20632-20634/2018

cannot be termed to be an order passed without application of mind to the

materials placed before the concerned sanctioning authority.

11. It is the further submission of the learned standing counsel for the

respondent that all the contentions raised by the petitioner are factual in

nature, which cannot be decided by this Court sitting under 482 Cr.P.C. and

the petitioner has to go through the rigour of trial to establish his innocence

and, therefore, it would not be justifiable for this Court to quash the case at

the threshold. Therefore, he prays for dismissing the present petitions.

12. This Court paid its anxious consideration to the submissions

advanced by the learned counsel on either side and perused the materials

available on record.

13. A careful scrutiny of the materials reveal that the petitioner,

though filed appeal, has not filed it in accordance with law by depositing the

mandatory security deposit of 25% of the amount, which has led to the

dismissal of the appeal and the writ petition filed against the said order also

ended in dismissal. The above clearly shows that the petitioner, without

properly utilising the remedy available to it, has, as a mere formality https://www.mhc.tn.gov.in/judis

CRL. O.P. NOS.20632-20634/2018

submitted an appeal without the mandatory deposit amount. The petitioner

not having availed the appeal remedy in the proper manner now cannot come

and say that the due process of law has not been followed.

14. Insofar as the contention of the petitioner relating to application of

mind on the part of the sanctioning authority sanctioning prosecution against

the petitioner, the question of limitation and also the non-application of mind

in the appreciation of materials filed before the assessment officer resulting

in the best of judgment, this Court is of the considered view that those

contentions are factual in nature, which cannot be gone into by this Court

under 482 Cr.P.C. and those contentions have to be raised and tested only at

the time of trial. The Court, exercising inherent powers under Section 482

Cr.P.C., cannot quash the case against the petitioner without properly

appreciating the facts.

15. The Hon'ble Supreme Court in the case of State of Haryana – Vs

Bhajan Lal (1992 Supp (1) SCC 335), has expounded the various

circumstances in which the inherent power u/s 482 Cr.P.C. can be invoked.

For better appreciation, the relevant portion of the said decision is quoted

hereunder :-

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“102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.

(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. (2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code

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except under an order of a Magistrate within the purview of Section 155(2) of the Code.

(3) Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.

(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code.

(5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.

(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for

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the grievance of the aggrieved party.

(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.

103. We also give a note of caution to the effect that the power of quashing a criminal proceeding should be exercised very sparingly and with circumspection and that too in the rarest of rare cases; that the court will not be justified in embarking upon an enquiry as to the reliability or genuineness or otherwise of the allegations made in the FIR or the complaint and that the extraordinary or inherent powers do not confer an arbitrary jurisdiction on the court to act according to its whim or caprice.

104. It may be true, as repeatedly pointed out by Mr Parasaran, that in a given situation, false and vexatious charges of corruption and venality may be maliciously attributed against any person holding a high office and enjoying a respectable status thereby sullying his character, injuring his reputation and exposing him to social ridicule with a view to spite him on account of some personal rancour,

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predilections and past prejudices of the complainant. In such a piquant situation, the question is what would be the remedy that would redress the grievance of the verily affected party? The answer would be that the person who dishonestly makes such false allegations is liable to be proceeded against under the relevant provisions of the Penal Code, 1860 — namely under Section 182 or 211 or 500 besides becoming liable to be sued for damages.”

16. The present case of the petitioner does not come within any of the

circumstances pointed out by the Hon'ble Supreme Court in Bhajan Lal's

case (supra) and, therefore, invoking of the jurisdiction of this Court u/s 482

Cr.P.C. would be wholly untenable and impermissible. The petitioner has to

establish his innocence or otherwise at the time of trial by adducing proper

evidence and it would be unsafe to close the case of the respondent at the

threshold, when the case has revenue implications, which pertains to public

money.

17. For the reasons aforesaid, this Court is not inclined to accede to

the prayer as sought for by the petitioner and, accordingly, these petitions are

dismissed leaving open all the points for the petitioner to canvass the same

before the trial court at the time of trial. It is made clear that any observation