Prior sanction and pending penalty proceedings barred criminal prosecution on identical sales tax facts

Prior sanction of the Commissioner was treated as a mandatory precondition for cognizance under the sales tax statute, and the record showed no specific sanction; a mere direction to prosecute was insufficient, so the criminal proceeding was unsustainable. The note also states that where a penalty proceeding was already pending on the same period, alleged suppression, and factual basis, prosecution on identical facts was barred to avoid duplicative consequences and abuse of process. The criminal case was quashed, while the departmental proceedings were left to continue in accordance with law.

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Issues: (i) whether the criminal prosecution could continue without previous sanction of the Commissioner under the sales tax statute; and (ii) whether the prosecution was barred because proceedings for tax penalty on the same facts were already pending.

Issue (i): whether the criminal prosecution could continue without previous sanction of the Commissioner under the sales tax statute

Analysis: The statutory scheme treated prior sanction as a mandatory condition for cognizance of an offence. The material on record did not show any specific sanction by the Commissioner; a mere desire or instruction to initiate prosecution was insufficient to satisfy the requirement. Where initiation is contrary to an express statutory precondition, the proceeding is inherently unsustainable and amenable to interference in revision.

Conclusion: The prosecution was not maintainable for want of the requisite sanction and this issue is decided in favour of the petitioner.

Issue (ii): whether the prosecution was barred because proceedings for tax penalty on the same facts were already pending

Analysis: The pending departmental proceeding under the penalty provision concerned the same period, the same alleged suppression of turnover, and the same factual foundation as the criminal case. The statute contemplated that prosecution would not lie in respect of the same facts where the penalty mechanism was already engaged. Allowing both proceedings to continue on identical facts would expose the petitioner to duplicative consequences and amount to an abuse of process.

Conclusion: The criminal prosecution was barred on the same facts and this issue is decided in favour of the petitioner.

Final Conclusion: The criminal case was held to be legally unsustainable and was quashed, while the departmental proceedings were left to proceed in accordance with law.

Ratio Decidendi: Where the statute makes prior sanction a mandatory condition for prosecution and also restrains prosecution on the same facts while a penalty proceeding is pending, continuation of the criminal case without compliance with those statutory safeguards is an abuse of process.

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