2015 (3) TMI 1435 - HC - VAT and Sales Tax

FIR under Section 420 IPC quashed despite revenue's argument that tax payment cannot absolve criminal liability

Sandeep Kumar and another Versus State of Punjab

Punjab and Haryana HC allowed petition seeking quashing of FIR under Section 420 IPC. Revenue argued that petitioners' discharge of civil liability ... Seeking quashing of FIR - case of Revenue is that only because the petitioners have discharged their civil liability by making payment of tax, they cannot be absolved from criminal liability - HELD THAT:- After careful perusal of the record of the case and giving thoughtful consideration to the rival contentions raised, this Court is of the considered opinion that present case is squarely covered by the judgment of this Court in PRITPAL SINGH VERSUS STATE OF PUNJAB AND ANOTHER [2012 (3) TMI 576 - PUNJAB AND HARYANA HIGH COURT]. It is so said, because the similar controversy fell for consideration before this Court in Pritpal Singh's case and finally the matter was decided in favour of the petitioners therein, ordering quashing of FIR alongwith subsequent proceedings arising therefrom. Accordingly, with a view to secure the ends of justice, present petition is allowed and FIR No. 227 dated 12.10.2012 under Section 420 IPC registered at Police Station Civil Lines Bathinda, alongwith subsequent proceedings arising therefrom, are ordered to be quashed, however, qua the petitioners only. Petition allowed. Issues:Quashing of FIR under Section 420 IPC.Analysis:The petitioners sought the quashing of FIR No. 227 dated 12.10.2012 under Section 420 of the Indian Penal Code (IPC) registered at Police Station Civil Lines, Bathinda. The petitioners contended that they had discharged their financial liability by paying the total amount due against them. They relied on a previous judgment in a similar case where the FIR was quashed. The State argued that the FIR was rightly lodged as the offense was committed at the time, regardless of the subsequent payment made by the petitioners. The Court examined the facts and considered the arguments presented by both parties.The Court noted that a similar controversy was previously decided in favor of the petitioners in a judgment related to VAT Act provisions. It was emphasized that specific provisions existed for penalties related to tax evasion, and the registration of FIR in such matters was considered an abuse of process of law. The Court referred to the judgment of the Hon'ble Supreme Court in Dilawar Singh v. Parvinder Singh, highlighting the principle that special provisions prevail over general provisions. The Court concluded that the FIR against the petitioners for assisting in tax evasion did not warrant charges under Section 420 IPC, as the VAT Act adequately addressed such matters through penalties.The State's counsel could not differentiate the present case from the previous judgment, indicating that the facts aligned closely. The Court, considering the circumstances and the legal principles involved, found that continuing criminal proceedings against the petitioners would be an abuse of process of law. Consequently, the Court allowed the petition and ordered the quashing of FIR No. 227 dated 12.10.2012 under Section 420 IPC registered at Police Station Civil Lines, Bathinda, along with subsequent proceedings, specifically against the petitioners. The judgment emphasized that the VAT Act provisions were sufficient to address tax evasion matters, and FIR registration in such cases was unwarranted.In conclusion, the Court allowed the petition, citing the previous judgment's applicability and the abuse of process of law in continuing criminal proceedings against the petitioners. The Court emphasized the adequacy of VAT Act provisions in dealing with tax evasion issues and ordered the quashing of the FIR against the petitioners under Section 420 IPC, highlighting the importance of specific legal provisions prevailing over general provisions in such cases.