Quashing of tax prosecution refused where payment dispute required trial evidence; compounding request left for lawful consideration.

Prosecution under Section 276C(2) of the Income-tax Act was not quashed because the claim that tax and interest had already been paid raised disputed questions of fact that had to be tested at trial. The pending compounding request did not justify interference with the criminal proceedings, though the competent authority was directed to consider it in accordance with law within the stipulated time. Limited dispensation was granted regarding the petitioners' appearance before the trial court, except at specified stages. The criminal original petition was dismissed.

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Issues: Whether the criminal prosecution launched under Section 276C(2) of the Income-tax Act, 1961 was liable to be quashed on the ground that the tax and interest had already been paid and that a compounding petition was pending.

Analysis: The question whether the alleged liability had been fully discharged involved disputed questions of fact which could not be examined at the stage of quashing and had to be left to evidence before the trial court. The pending compounding request was directed to be considered by the competent authority in accordance with law within a stipulated time, but that circumstance did not warrant interference with the prosecution. Limited dispensation was also granted regarding the petitioners' presence before the trial court, except for specified stages.

Conclusion: The prayer to quash the prosecution was rejected and the criminal original petition was dismissed.

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