TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 480
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....refore, the discussion is also recorded in one set only to avoid duplication of work and repetition of same facts separately in separate judgments. 3. Petitioner in Criminal Revision Application No.857 of 2016 namely; James Samual is nowhere connected either with the tax benefit claimed by the Company or with the paper work carried out by another petitioner viz. Babubhai Chhotalal Makwana, an Officer of the Central Excise Department. However, the only allegation against him in the FIR so also in the Chargesheet is to the effect that he has issued forged document in favour of the Company though there was no commercial production by the Company. Whereas, perusal of allegation in the Chargesheet (Page 25 i.e. running page 215 of the petition) on the contrary discloses altogether a different story when it is stated that the Company at Anjar, District Kutch has issued a first invoice being invoice no.1 dated 28.12.2005 to M/s.Angel Enterprise, a proprietary firm of the petitioner. It is also disclosed that a partnership firm of the petitioner M/s.Jai Shakti Engineering and Construction was engaged in fabrication and erection work of the Company. So far as criminal act is concerned, the....
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....production was already started on 27.12.2005 which was certified by officer of equivalent cadre being Assistant Commissioner viz; Mr.S.P. Gawade, wherein, it is specifically stated that production has started on 27.12.2005 when Mr.S.P. Gawade has visited the factory. Therefore, when Department is prosecuting present petitioner, it is quite obvious that Department should also prosecute Mr.S.P. Gawade too because if no commercial production was started as certified by the petitioner, then, report of Mr.S.P. Gawade is also equally wrong when he stated that commercial production is commenced by the Company as per his visit dated 27.12.2005. Such report No.IV-16-162- TECH-2005 dated 2.1.2006 is at page 75 / A wherein against the name of the Company, the date of commencement of commercial production is disclosed as 27.12.2005 so also the date of visit as 27.12.2005. 6. Therefore, what is submitted by the petitioner is quite simple and is to the effect that in-fact he has relied upon the documents produced before him regarding investment by the Company which is disclosed as per the Report of the Chartered Accountant and so far as production is concerned, it is in confirmation of the Repo....
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....ficial duty, inasmuch as, on the contrary it is the basic requirement of the Act that if somebody while holding office as a public servant or by abusing his position as public servant obtains any benefit either for himself or for any other person in terms of valuable thing or pecuniary advantage. Therefore, it is obvious that allegation against the petitioner is with respect to performance of his official duty and hence in absence of sanction so also even prima-facie evidence regarding benefit if any obtained by the petitioner, there is no reason to continue the proceedings against him. 11. It is also evident from records that practically impugned order is also common in all these two revision petitions, being order dated 20th January,2010, below the chargesheet to issue process against petitioners. 12. The sum and substance of the case against the petitions is to the effect that main accused, a public limited Company incorporated under the Companies Act, 1956 namely M/s.Welspun Gujarat Sthal Public Limited which name was changed to M/s.Welspun Corporation Limited (hereinafter referred to as the "Company") has filed an application for exemption of Excise duty, pursuant to the not....
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....other officers so also Chartered Accountants so also present petitioners. 14. Considering the investigation by CBI, the F.I.R and charge-sheet runs into pages, disclosing several irregularities and illegal activities alleged to have been committed by the Company and petitioners. There are several communications from some of the officers and Chartered Accountants disclosing the compliance of certain terms and conditions of the notification under reference. But, mainly it was found that the contents of such communication are not correct. 15. Amongst the accused, the Managing Director of the Company namely B.K. Goenka had come forward and discussed the dispute with the department of Customs and Excise conveying that it was a bonafide error or mistake on their part and therefore he would like to settle the dispute with the department. It cannot be ignored that the basic ingredient of such settlement is the fact that practically Company has never received any exemption from payment of tax, may be because of the fact that the documents were not in order. But, the fact remains that there was no financial benefit to the Company and nor to any of its office bearers or officers or even to ....
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....mmissioner of Central Excise compounded the offence subject to the payment of Rs. 50,000/- by each of the applicant before it and that such amount is deposited by the concerned persons / accused; there is no reason to proceed further in criminal trial when the department is not going to come and prove that the Company or any other persons have obtained any illegal and undue advantage from them. Though the legal position is well settled on such issue and thereby though there is no need to continue the trial any further when CBI has filed a charge-sheet, initially the Managing Director of the Company Shri Balakrishna Gopiram Goenka (B.K.Goenka) has challenged the proceeding in a quashing petition being Special Criminal Application No. 2543/2012, such petition was resisted by the State and CBI. The perusal of the judgment dated 10th April,2015, is on record at Annexure P-20 in such petition makes it clear that the Co-ordinate Bench has not only quashed and set aside the FIR qua the petitioner before it namely B.K. Goenka but has categorically observed that the purpose of compounding of offence against the payment of compounding amount is to prevent litigation and encourage early settl....
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....rs had compounded the offence, initiation of proceedings under the provisions of IPC and Prevention of Corruption Act for the same allegations cannot be permitted. 20. In the case of Rajesh Kumar Sharma v. Union of India & Ors., reported in (2007) 9 SCC 158, The Hon'ble Supreme Court, in para 6, observed as under: "6. The guidelines for compounding are contained in the Circular No. 54/2005-Cus dated 30th December, 2005.Central Government had brought in to force the Customs ( Compounding of Offences) Rules 2005 (in- short the Custom Rules') and Central Excise (Compounding of Offences ) Rules 2005) (in short the 'Central Excise Rules') with effect from 30th December, 2005. the purpose of compounding the offences against payment of compounding amount is to prevent litigation and encourage early settlement of diputes. The cases where compounding would be rejected are also spelt out in the said circular." 21. In the case of Hira Lal Hari Lal Bhagwati v. CBI, New Delhi, reported in (2003) 5 SCC 257, The Hon'ble Supreme Court, in paras 29 and 30, observed as under: "29.In our view, in the present case, the alleged criminal liability stands compounded on a settlement with respect to th....
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....ian Penal Code are made out. 30.In our view, under the penal law, there is no concept of vicarious liability unless the said statute covers the same within its ambit. In the instant case, the said law which prevails in the field I.e. the Customs Act,1962 the appellants have been therein under wholly discharged and the GCS granted immunity from prosecution. It is well established principle of law that the matter which has been adjudicated and settled need not to be dragged into the criminal courts unless and until the act of the appellants could have been described as culpable. The true fact and import of the Kar Vivad Samadhan Scheme, 1998, in our view, is that once the said Scheme is availed of and all the formalities complied with including the payment of the duty, the immunity granted under the provisions of the Customs Act,1962 also extends to such offences that may prima facie be made out on identical allegations i.e. of evasion of Customs Duty and violation of any Notification issued under the said Act." 22. In view of the aforesaid decisions, the learned Counsels are right in submitting that in the present case once the offence is compounded under the provisions of the Cent....
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...., para 39) "39. (I) The primary responsibility is on the complainant to make specific averments as are required under the law in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every Director knows about the transaction." 20. Insofar as the criminal complaint is concerned, it does not contain any allegation against G.N. Verma. The only statement concerning him is that he was the Chief General Manager/deemed agent of the mine and was exercising supervision, management and control of the mine and in that capacity was bound to see that all mining operations were conducted in accordance with the Act, the Rules, Regulations, Orders made thereunder. In the face of such a general statement, which does not contain any allegation, specific or otherwise, it is difficult to hold that the Chief Judicial Magistrate rightly took cognizance of the complaint and issued summons to G.N. Verma. The law laid down by this Court in Harmeet Singh Paintal (though in another context) would be squarely applicable. Under the circumstances, we are of the opinion that on the facts of this case and given the absence of any allegat....
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....s caused to the Department. The reliance placed by learned advocate Shri Kodekar on the statement of Shri Kuttan Mohanan Pillai is also misconceived in view of the fact that the said person is coaccused in the chargesheet which is filed against the Company and its officers. In the statement given by the said co-accused, no specific allegations are made by the said coaccused against the petitioner. 27. In view of the aforesaid discussion, when it is prima facie proved that the petitioner has not wrongfully gained anything and/or any wrongful loss is caused to the Department and the Company and its officers including the petitioners have been granted immunity, in the opinion of this Court, there is no need to continue with the criminal prosecution against the present petitioners. Moreover, neither in the FIR nor in the charge-sheet any specific allegations are leveled against the petitioners that they have forged any document. Even otherwise, looking to the impugned FIR and from the papers of chargesheet, the ingredients of the alleged offence are prima facie not made out. 28. Thus, in view of the aforesaid discussion, the impugned FIR being RC20(A)/2008 - GNR and all proceedings i....
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.... AND ANOTHER wherein Hon'ble Supreme Court has considered the revisional powers of the Court under Section 397(2) with reference to interlocutory order and held that when there is specific remedy provided by way of appeal or revision, inherent powers under section 482 cannot and should not be resorted to. Therefore, when the present petitions are not under Section 482 of the Code for quashing the complainant but under Section 397 the Court has to verify the irregularity and illegality if any in the impugned order. Hence, this judgment would not help the respondent. 32. However it cannot be ignored that what is to be looked into is "a very strong suspicion founded upon materials before the Magistrate, which leads him to form a presumptive opinion as to the existence of the factual ingredients constituting the offence alleged"; therefore it cannot be said that even if in absence of suspicion, presumptive opinion of the commission of offence as alleged, charge must be framed. Suffice to say that when enactment /statute provides for discharging accused, basically accused has a right to get discharge, which may be subject to fulfillment of certain criteria, that may be laid down either....
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.... and the investigating agency to keep such person under suspicion but to investigate further so as to find out real culprit, else filing of charge against a person only on suspicion but without sufficient evidence against him would be a futile exercise and it will not only increase unnecessary workload but crime in the society also, since real culprits are able to get secluded them from the trial. 33. It becomes clear that the special judge mainly relied upon the facts discussed in the FIR and charge-sheet, but failed to realize the legal position in the case of compromise or compounding of offence by the parties. There is no need to proceed further in criminal proceedings. The Trial Court has also failed to appreciate the factual details that in fact the Company has never been benefited by seeking exemption of tax and that now there is one final judgment in favor of one of the accused and against the prosecuting agency. But the determination of co-ordinate bench which is recollected herein above is certainly applicable to all the accused and it cannot be said that it is applicable only to the person who has preferred such petition. Therefore, when the complainant is already quash....
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....cient ground for proceeding against him and not for the charges by arriving at the conclusion that it is not likely to lead to a conviction. (2) AIR 2000 SC 665 = 2000 SCC(2) 57 : State of MP vs. SB Johari - It was held that, the Court at the stage of S.227 and S.228 is not required to appreciate the evidence and arrive at the conclusion that the materials produced are sufficient or not for convicting the accused. Only prima facie case is to be looked into. The charge can be quashed if the evidence which the prosecutor proposes to prove the guilt of the accused, even if fully accepted, it cannot show that accused committed that particular offence. Thus it is settled law that at the stage of framing the charge, the Court has to prima facie consider whether there is sufficient ground for proceeding against the accused. The Court is not required to appreciate the evidence and arrive at the conclusion that the materials produced are sufficient or not for convicting the accused. If the Court is satisfied that a prima facie case is made out for proceeding further then a charge has to be framed. The charge can be quashed if the evidence which the prosecutor proposes to adduce to prove ....
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.... Court can convict the accused only if such charges i.e. evidence is proved on record without reasonable doubt. Therefore, if there is no chance to prove a commission of offence by the accused, charge cannot be framed. (7) AIR 2009 SC Supplimentary 1744 - State of M.P. Vs.Sheetla Sahai It is held as under: if the Court arrives at only opinion, there is no evidence against the accused, the Court shall not put accused to harassment by asking him to face a trial. 1. Thus, the law on the subject is now well settled, that while framing charge, the Court is required to evaluate the material and documents on record with a view to finding out if the facts emerging therefrom taken at their face value disclose the existence of all the ingredients constituting the alleged offence. The Court may, for this limited purpose, sift the evidence as it cannot be expected even at that initial stage to accept all that the prosecution states as gospel truth even if it is opposed to common sense or the broad probabilities of the case. Therefore, at the stage of framing of the charge, the Court has to consider the material with a view to find out if there is ground for presuming that the accused has c....