Criminal liability cannot be fastened on a non-assessee who only guaranteed another's tax dues; remedy remains civil recovery.

A non-assessee who merely undertakes or guarantees payment of another person's tax arrears cannot be criminally prosecuted for the other person's default under the Puducherry VAT Act, the Puducherry GST Act, or the IPC unless the statute expressly fastens such liability. The undertaking may create a civil or contractual obligation to satisfy the dues, but it does not convert the guarantor into an assessee or establish criminal culpability for defaults committed by someone else. The continuation of criminal proceedings on that basis was treated as an abuse of process, with the proper remedy confined to civil recovery.

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Issues: Whether a person who is not the assessee, but who executed an undertaking to pay the tax arrears of the assessee, can be criminally prosecuted for the assessee's default under the Puducherry Value Added Tax Act, the Puducherry Goods and Services Tax Act, and the Indian Penal Code.

Analysis: The complaint against the petitioner was founded solely on the undertaking given by him to pay the tax arrears of the first accused. The material allegations of tax default related to the first accused, who alone was the assessee. The petitioner's undertaking could create liability to satisfy the dues, but that liability was contractual or civil in nature. The mere failure to honour such an undertaking did not make the petitioner an assessee under the taxing statute, nor could it justify fastening criminal liability for defaults committed by another person. Since the prosecution proceeded on presumed culpability without a legal basis to treat the petitioner as the assessee, continuation of the criminal case would amount to abuse of process.

Conclusion: The petitioner could not be criminally implicated for the tax default of the first accused merely on the strength of his undertaking or guarantee. The criminal proceedings against the petitioner were liable to be quashed.

Ratio Decidendi: A non-assessee who merely undertakes or guarantees payment of another's tax dues cannot be subjected to criminal prosecution for the other person's statutory default in the absence of express statutory liability; at most, the remedy lies in civil recovery.

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