TaxTMI 
TaxTMI 
1997 (9) TMI 4
X X X X Extracts X X X X
X X X X Extracts X X X X
...." the Act " for short), by Borewell and Co., a registered partnership firm (respondent No. 1), and its three partners (respondents Nos. 2 to 4). The Special Court took cognizance of the offence alleged and issued process against the respondents for their attendance. After entering appearance they filed an application praying for their discharge under section 245(2) of the Code of Criminal Procedure. The Special Court allowed the application on the ground that before granting sanction for their prosecution under section 279(1) of the Act, the sanctioning authority did not give the respondents a personal hearing. The other grounds raised by the respondents for their discharge were, however, kept open. Assailing the order of discharge, the app....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an three months but which may extend to seven years and with fine. Section 278B reads as under : " 278B. (1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly : Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithst....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... offence has been committed. The words " as well as the company " appearing in the section also make it unmistakably clear that the company alone can be prosecuted and punished even if the persons mentioned in the categories (ii) and (iii), who are for all intents and purposes vicariously liable for the offence, are not arraigned, for it is the company which is primarily guilty of the offence. Even though in view of the above provisions of section 278B, a company can be prosecuted and punished for an offence committed under section 276B (besides other offences under the Act) the sentence of imprisonment which has got to be imposed thereunder cannot be imposed, it being a juristic person. This apparent anomalous situation can be resolved,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which the pain of punishment could be inflicted, nor a mind which can be guilty of a criminal intent, traditional punishments prove ineffective, and new and different punishments have to be devised. The real penalty of a corporation is the diminution of respectability, that is, the stigma. It is now usual to insert provisions to the effect that the director or manager who has acted for the corporation should be punished. But it is appropriate that the corporation itself, should be punished. In the public mind, the offence should be linked with the name of the corporation, and not merely with the name of the director or manager, who may be a non-entity. Punishment of fine in substitution of imprisonment in the case of a corporation could so....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... v. Filip Tiago De Gama of Vedem Vasco De Gama, AIR 1990 SC 981, this court observed : " The paramount object in statutory interpretation is to discover what the Legislature intended. This intention is primarily to be ascertained from the text of the enactment in question. That does not mean the text is to be construed merely as a piece of prose, without reference to its nature or purpose. A statute is neither a literary text nor a divine revelation. 'Words are certainly not crystals, transparent and unchanged' as Mr. Justice Holmes has wisely and properly warned (Towne v. Eisher, [1918] 245 US, 418, 425). Learned Hand, J. was equally emphatic when he said : 'Statutes should be construed, not as theorems of Euclid, but with some imaginat....