Income-tax criminal prosecution not barred by pending tax proceedings; anticipatory bail cannot be refused solely for economic offence allegations.

Pendency of rectification or reference proceedings under the Income-tax Act does not bar institution or continuation of criminal prosecution for offences under sections 276C and 277 read with section 278B; the criminal court must independently assess the offence on the evidence before it, though it may consider the outcome of tax proceedings where relevant. Anticipatory bail should not be denied solely because the allegations concern economic offences, and interim protection may be granted with a direction to appear before the Magistrate. The objection to maintainability before the Rajasthan High Court at Jodhpur was rejected, and the applications were entertained.

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Issues: (i) whether the pendency of rectification and reference proceedings under the Income-tax Act barred criminal prosecution for offences under sections 276C and 277 read with section 278B; (ii) whether anticipatory bail should be refused on the ground that the matter involved economic offences; and (iii) whether the applications were not maintainable before the High Court at Jodhpur.

Issue (i): whether the pendency of rectification and reference proceedings under the Income-tax Act barred criminal prosecution for offences under sections 276C and 277 read with section 278B

Analysis: The pendency of proceedings under the Act does not prevent institution or continuation of criminal prosecution. The criminal court must assess the ingredients of the offence independently on the evidence before it, though it may take due regard of the outcome of proceedings under the Act where relevant. Mere expectation of success in appeal or reference cannot bar prosecution.

Conclusion: The pendency of rectification or reference proceedings did not bar the criminal case.

Issue (ii): whether anticipatory bail should be refused on the ground that the matter involved economic offences

Analysis: The nature of the allegation as an economic offence did not, by itself, justify denial of anticipatory bail. The court found no reason to decline interim protection merely on that ground and considered it proper to follow the course adopted in similar matters by directing appearance before the Magistrate and granting protection against arrest till then.

Conclusion: Anticipatory bail was not refused on the ground of economic offence.

Issue (iii): whether the applications were not maintainable before the High Court at Jodhpur

Analysis: The objection based on territorial forum was rejected. The court held that a matter arising from the Jaipur area could be entertained by the Rajasthan High Court at Jodhpur, and the applications were not liable to be rejected on that ground.

Conclusion: The applications were maintainable before the High Court at Jodhpur.

Final Conclusion: The petitioners were directed to appear before the Chief Judicial Magistrate (Economic Offences), Jaipur, with prior intimation, and the warrants of arrest were kept in abeyance till then.

Ratio Decidendi: Pendency of tax proceedings does not bar criminal prosecution for offences under the Income-tax Act, and in an appropriate case anticipatory bail may be protected by directing appearance before the Magistrate rather than refusing relief solely because the matter is an economic offence.

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