Quashing of TDS default proceedings refused where the complaint disclosed a prima facie case and no explanation for non-deposit emerged.

Criminal proceedings for alleged failure to deposit tax deducted at source were not quashed because the complaint disclosed a prima facie case and no manifest illegality or injustice was shown. The Court noted that cognizance had already been taken, two prosecution witnesses had been examined, and the record did not reveal any bona fide or reasonable explanation for the default. At the cognizance stage, only a prima facie view is required, so the inherent jurisdiction was not invoked to interfere with the proceedings. The challenge to the cognizance order therefore failed.

---

---

Issues: Whether criminal proceedings arising from the complaint for failure to deposit tax deducted at source were liable to be quashed in exercise of inherent jurisdiction.

Analysis: The complaint alleged deduction of tax at source under the interest-payment provisions and failure to deposit the deducted amount within the prescribed time, attracting the penal provisions for non-deposit and the provision fastening liability on persons connected with the firm. The Court found that cognizance had already been taken, two prosecution witnesses had been examined, and no bona fides or reasonable explanation had been shown for the default. At the stage of cognizance, only a prima facie view is required, and the record disclosed no ground for interference under the inherent jurisdiction to quash the proceedings.

Conclusion: The prayer to quash the criminal proceedings was rejected and the challenge to the cognizance order failed.

Ratio Decidendi: Inherent jurisdiction to quash criminal proceedings will not be exercised where the complaint and material on record disclose a prima facie case and no manifest illegality, injustice, or sufficient explanation for the alleged tax default is shown.

---