Supreme Court affirms sanction for prosecution against Company for non-depositing TDS. Trial to proceed.

The Supreme Court upheld the sanction for prosecution against a petitioner-Company for non-depositing TDS amounting to Rs.3,52,99,059/- in the Government treasury. The Court agreed with the High Court's decision to allow the trial to proceed, emphasizing the consequences of non-compliance and the need for the Company and responsible individual to face trial. The Supreme Court found no grounds for interference and dismissed the Special Leave Petition, affirming the High Court's ruling.

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Issues Involved:
1. Sanction for prosecution due to non-deposit of TDS by the petitioner-Company.
2. Validity of High Court's decision to uphold the sanction order and allow the trial to proceed.

Issue 1: Sanction for Prosecution:
The Supreme Court, comprising Hon'ble Mr. Justice M.R. Shah and Hon'ble Mrs. Justice B.V. Nagarathna, deliberated on the matter involving the non-deposit of a significant amount of Rs.3,52,99,059/- in the Government treasury as TDS by the petitioner-Company within the stipulated time frame. Despite the deduction, the amount was not remitted promptly, leading to the grant of sanction by the appropriate Authority to prosecute the petitioner(s). The Court acknowledged the delayed deposit and emphasized that the consequences of non-compliance, including prosecution, must ensue. The defenses raised by the petitioner-assessee were deemed as issues to be addressed during the trial proceedings, as highlighted by the High Court's judgment. The Court noted that the High Court's decision to uphold the sanction order was justified, especially considering that the trial had already commenced with the issuance of summons by the learned Magistrate before the High Court's intervention under Article 226 of the Constitution of India. Ultimately, the Supreme Court concurred with the High Court's stance, finding no grounds for interference in the matter under Article 136 of the Constitution of India, consequently leading to the dismissal of the Special Leave Petition.

Issue 2: Validity of High Court's Decision:
The Court further emphasized the necessity for the Company and the responsible individual to undergo the trial process, as directed by the High Court, in light of the ongoing legal proceedings initiated prior to the High Court's involvement. The Supreme Court affirmed the High Court's observation that the Company and the concerned individual must face the trial proceedings, indicating a concurrence with the High Court's decision. The Court concluded that no intervention from the Supreme Court was warranted in this scenario, thereby dismissing the Special Leave Petition and disposing of any pending applications related to the case.

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