Continuing tax default and Article 20(1): prosecution may proceed where duty to deduct and remit remains unperformed.

Failure to deduct and remit dividend tax was treated as a continuing statutory default until performance, so the amended penal provision could still support prosecution and the committal order could not be quashed on that ground. Article 20(1) was held not to bar the prosecution at the committal stage, because it prohibits conviction or enhanced punishment under an ex post facto law, not the trial itself. The complaint was also treated as valid where it was launched on the Commissioner's written authority, and the available statements and oral evidence were sufficient at that stage to make out a prima facie case that the accused was the principal officer. The revisional challenge therefore failed.

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Issues: (i) Whether the failure to deduct and pay dividend tax could be treated as a continuing offence so as to sustain prosecution under the amended provisions. (ii) Whether prosecution under section 276B was barred by Article 20(1) of the Constitution of India for defaults that began before the amendment. (iii) Whether prosecution was invalid for want of a complaint by the Commissioner of Income-tax and for absence of proof that the petitioner was the principal officer.

Issue (i): Whether the failure to deduct and pay dividend tax could be treated as a continuing offence so as to sustain prosecution under the amended provisions.

Analysis: The duty to deduct tax from dividends and to pay the amount to the credit of the Central Government was treated as a statutory obligation continuing until performed. The court noted the earlier and later statutory schemes, the corresponding provisions under the 1922 Act and the 1961 Act, and the line of authority recognising that omission to perform a continuing statutory duty can amount to a continuing wrong. On that basis, the question whether the default was continuing was relevant to the maintainability of prosecution under the amended provisions, and the materials disclosed at least a prima facie case for commitment.

Conclusion: The default could properly be regarded as capable of constituting a continuing offence, and the committal could not be quashed on that ground at this stage.

Issue (ii): Whether prosecution under section 276B was barred by Article 20(1) of the Constitution of India for defaults that began before the amendment.

Analysis: Article 20(1) was held to prohibit conviction or sentence under an ex post facto law, not the mere trial of an accused. Since the matter was only at the stage of committal, no question of heavier punishment had yet arisen. The court therefore declined to hold, at that stage, that the amended penal provision could not be invoked, especially where the legal question depended on how the default was characterised and whether it continued after the amendment.

Conclusion: Article 20(1) did not bar the prosecution at the committal stage.

Issue (iii): Whether prosecution was invalid for want of a complaint by the Commissioner of Income-tax and for absence of proof that the petitioner was the principal officer.

Analysis: The complaint had been instituted on the Commissioner's written authority, which was treated as sufficient compliance with the statutory requirement that prosecution be launched at the instance of the Commissioner. As to status as principal officer, the record contained the petitioner's own statement signed as managing director, the description in the revision petitions, and oral evidence supporting the prosecution case. At the committal stage, these materials were sufficient to establish a prima facie case; conclusive proof beyond reasonable doubt was not required.

Conclusion: The prosecution was maintainable and a prima facie case existed that the petitioner was the principal officer.

Final Conclusion: The revisional challenge to the committal order failed, and the petitioner was required to face trial on the charged tax defaults.

Ratio Decidendi: Where a statutory duty to deduct and remit tax continues until performed, a default may be treated as a continuing offence, and at the committal stage the court need only see whether a prima facie case exists; Article 20(1) does not preclude the trial itself for such defaults, and prosecution is not invalid if instituted on the Commissioner's authority.

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