TaxTMI 
TaxTMI 
2016 (12) TMI 566
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....of Gujarat Sales Tax Act, 1969 on the premise that some irregularities had been committed resulted into evasion of tax. Originally, the First Information Report came to be filed under the provisions of Section 85(2) of the VAT Act, 2003 but later on, the investigating agency has opened an inquiry and added Section 409 of Indian Penal Code, as an offence, having been committed by tendering an application dated 11.01.2009. 3. It is the case of the prosecution that the aforesaid proceedings have been generated out of the proceedings initiated under Section 27(5)(t) and Section 75 read with Section 100, read with Section 9(2) of the Central Act, and the said proceedings were carried out by the Deputy Sales Tax Commissioner and an order came to be passed on 16.09.2008, whereby the registration certificate, which has been given to 'Shri Bhavani Ispat', came to be cancelled as being ab initio void and resultantly based upon the said order, the First Information Report came to be registered. 4. It is further the case of the petitioner that feeling aggrieved and dissatisfied with the said order passed by the Deputy Sales Tax Commissioner at Ahmedabad, a Revision Petition came ....
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.... counsel Shri N.D.Nanavati appearing on behalf of applicant has contended that the original order, based upon which the complaint came to be filed, is no longer survived and therefore, there remains nothing to be proceeded against the present applicant. 9. It has also been contended by the learned counsel for the applicant that no doubt the powers under Section 85(2) of the Act are empowering the Sales Tax Authority to register an F.I.R. under the general stream of law, but it is inter connected with other provisions of VAT Act, 2003 and therefore, when the simultaneous provisions are available, the initiation under Section 85(2) of the Act is not just and proper. It has also been contended that in any case the offence under Section 409 of Indian Penal Code, which is pressed into service, is ex facie not attracted and the same has been inserted in the complaint either on account of willful neglect or on account of extraneous consideration and therefore, in absence of any ingredients of Section 409 of Indian Penal Code, having been satisfied, no complaint can be filed in that respect. 10. Learned counsel has submitted that ultimately the order of remand came to be passed by th....
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.... question and therefore, since this Section 409 is pertaining to criminal breach of trust by public servant or by banker, 'merchant' or agent, it is desirable in the interest of justice not to examine in detail the ingredients of Section 409 at this stage of proceedings. 15. It has also been pointed out that when the charge of Section 409 is levelled, the material which had been gathered by the prosecution will have to be examined in detail and such factual matrix is a matter of trial to be conducted and therefore, at this stage of the proceeding, even if, some of the element is not prima facie referring in the complaint, but then it has been gathered during the course of process and therefore, the proper adjudication is required to be undertaken and therefore, this is not the stage at which the complaint is required to be quashed. 16. Learned Additional Public Prosecutor, then had inquired telephonically about what has transpired after the remand order which has been passed based upon which the present proceedings have been initiated. The Additional Public Prosecutor has received the instruction telephonically and has conveyed to the Court in presence of Mr. Nirad D.....
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.... the Court is of the opinion that this is not a fit case for exercising of power under Section 482 of the Code of Criminal Procedure. 19. The Court while coming to this conclusion has gone through the detail averments made in the complaint which are prima facie reflecting that some element of offence is established and in view of the authority entrusted under the statute, the complaint appears to have been lodged and therefore looking to the gravity of the transactions which have led to ultimately passing of an order of cancellation of registration ab initio and the entire issue is related to a tax evasion, this Court is not inclined to exercise inherent jurisdiction and would like to give a fair chance to prosecution to establish the case. The Court is of the opinion that this is not the case where the complaint is required to be throttled at initial stage itself. So far as, bare reading of Section 409 of Indian Penal Code is concerned, merchants are also covered, one or other ingredient is missing, is not required to be considered at this stage of the proceedings and during the course of proceedings an opportunity will be very much available to the applicant of raising his def....
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....re is an express legal bar enacted in any of the provisions of the Code or any specific law in force to the very initiation or institution and continuance of such criminal proceedings, such a bar is intended to provide specific protection to an accused. 27.6. The Court has a duty to balance the freedom of a person and the right of the complainant or prosecution to investigate and prosecute the offender. 27.7. The process of the court cannot be permitted to be used for an oblique or ultimate/ulterior purpose. 27.8. Where the allegations made and as they appeared from the record and documents annexed therewith to predominantly give rise and constitute a "civil wrong" with no "element of criminality" and does not satisfy the basic ingredients of a criminal offence, the court may be justified in quashing the charge. Even in such cases, the court would not embark upon the critical analysis of the evidence. 27.9. Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in a conviction; the court is concerned p....
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....ce with the requirements of the offence." (ii) Yet in another case i.e. in case of HMT Watches Limited Vs. M.A. Abida And Another, reported in (2015) 11 Supreme Court Cases 776, while dealing with an issue relating to inherent powers of the High Court, the Apex Court has laid down a proposition that if the factual data is disputed the same to be left open for the trial Court to determine. The relevant extracts of the decision is reproduced hereinafter; "11. In Suryalakshmi Cotton Mills Limited v. Rajvir Industries Limited and others1, this Court has made following observations explaining the parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure: - "17. The parameters of jurisdiction of the High Court in exercising its jurisdiction under Section 482 of the Code of Criminal Procedure is now well settled. Although it is of wide amplitude, a great deal of caution is also required in its exercise. What is required is application of the well-known legal principles involved in the matter. 22. Ordinarily, a defence of an accused although appears to be plausible should not be taken into conside....