Statutory tax-enforcement mechanism bars criminal prosecution where goods vehicle allegedly concealed true cargo particulars.

The special enforcement scheme under the Punjab Value Added Tax Act, providing for detention of goods, verification of documents, recording of statements, notice, inquiry and penalty for attempted tax evasion or false documentation, was held to be sufficient to address allegations that a goods vehicle was used to suppress the true particulars of the goods carried. In view of that statutory mechanism, criminal prosecution for evasion of entry tax and cheating was treated as an abuse of process. The FIR and all consequential proceedings were quashed qua the petitioners.

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Issues: Whether the FIR and consequential proceedings alleging evasion of entry tax and cheating were liable to be quashed in view of the statutory scheme under the Punjab Value Added Tax Act.

Analysis: The allegations were that the goods vehicle was being used to avoid payment of tax by suppressing the true particulars of the goods carried. The statutory scheme under the Punjab Value Added Tax Act contained specific provisions for detention of goods, verification of documents, recording of statements, notice and inquiry, and imposition of penalty where there was an attempt to evade tax or where documents were absent or not genuine. On that basis, the Court held that the special fiscal mechanism was sufficient to deal with such conduct and that resort to criminal prosecution in these circumstances amounted to abuse of process of law.

Conclusion: The FIR and all consequential proceedings were quashed qua the petitioners.

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