TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 1102
X X X X Extracts X X X X
X X X X Extracts X X X X
....Goel Automobiles at Rajpura Road, Patiala. Bhupinder Singh is it's Manager, Varinder Kumar is a Mechanic, Amrik Singh is salesman and Parveen Kumar is a driver. All above mentioned in connivance with each other bring car from Chandigarh, Hissar, Dabwali and other agencies by loading the same in Trallas. In these trallas 2/3 cars belonging to Goel Automobiels also brought. These cars are unloaded at Nadda Sahib, Jind, Manji Sahib or Dabwali (Haryana) and subsequently parveen Kumar driver son of Shri Jai Ram r/o Sekhpura Near Punjabi University, Patiala, Mechanic, Varinder Kumar and Amrik Singh Salesman bring these Vehicle from secret routes instead of Barriers established by Punjab Governments- on the basis of fake papers prepared by owner D.P. Goel and Manager Bhupinder Singh. They do so with the intention to deceive Punjab Government by entering state of Punjab and take the vehicle to Goel Automobiles Patiala. In this way they misappropriate crores of rupees payable to exchequer of State. Today also Parveen Kumar above mentioned will enter Punjab Punjab with Verna car bearing Number PB 11TC-0559 (T). The papers regarding said car have been prepared by D.P. Goel and Bhupinde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hile referring to the order submits that it has been observed in the order passed by the Tribunal itself that on the basis of the same transaction present FIR came into being whereby the petitioners have been alleged of evading tax. He submits that the appeal preferred by the petitioners stands allowed and accepted and the Adjudicating Authority has found as under : "As a matter of fact, the department has based its whole case on the statement of Parveen Kumar recorded on 25.3.2011 at about 8.15 PM on Ghanaur, Bahadurgarh Road. In this regard, for the clarity of the facts, it would be essential to note a few facts; firstly, the place where the driver was checked is near to the place of business of the appellant as has been disclosed by him in his address, therefore, at the face of it and in the circumstances as referred to above, it can't be said that vehicle was coming from Ambala to Patiala and it was not accompanied by valid documents. Since the documents as proved by the appellant were prepared prior to the time of apprehension of the vehicle and the payment was made through the banking channels and the temporary registration was issued by a special registering authority ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the challan dated 21.3.2011 also establishes that the invoice amount inclusive of Value Added Tax Act has been paid by the appellant. In such circumstances, non giving of information becomes in significant. The relevant documents which the department wanted, have been produced. Still, the counsel has even now placed on record a paper book consisting of complete statement of account. No finger has been raised over the validity of those account books. As such, it would be concluded that the vehicle In question, when apprehended, was covered by proper and genuine documents and the appellant had no intention to evade the tax. Having perused the impugned order passed by the authorities below. The same is based on the manipulated statements of Parveen Kumar alone. The department has not tried to go deep in order to probe the issues which required to be proved in case of detention of the goods U/s 51 of the Punjab Value Added Tax Act, 2005, therefore, both the orders being illegal, are liable to be quashed." 5. Counsel for the petitioners has submitted that the gravamen of the complaint against the petitioners is of having evaded VAT. VAT in itself is a complete Code. There is no pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er passed by the Tribunal in appeal vide Annexure P-8 are result of the same transaction qua which the petitioners have been booked in the impugned FIR. The allegation in the FIR against the petitioners is of having brought the new vehicles from secret routes to avoid the barriers established by the Punjab Govt. on the basis of fake papers with an intent to evade tax. The petitioners are accused of having prepared forged and fabricated documents to facilitate the aforesaid evasion. The Firm was slapped with the penalty to the tune of Rs. 4,34,454/- vide order dated 30th of March, 2011 passed by Assistant Excise and Taxation Officer, Patiala under Section 51(7)(c) of the Punjab Value Added Tax Act, 2005. The Firm filed appeal in which the Appellate Tribunal came to the conclusion that the case of the department that a new vehicle was being brought by the driver from Ambala to Patiala through an escape route has no legs to stand. Resultantly, the Tribunal quashed the order of penalty passed against the Firm accepting its appeal. 12. Counsel for the State does not dispute that the aforesaid order passed by the Tribunal (Annexure P-8) has attained finality and the Department has accep....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... set aside by the Income Tax Appellate Tribunal. If that is the position then we are unable to see as to how criminal proceedings can be sustained." Similar view has been taken by this Court in the case of K.C. Builders and Another v. Assistant Commissioner of Income Tax (2004) 2 SCC 731, in which it has been held as follows : "26. In our view, once the finding of concealment and subsequent levy of penalties under Section 271(1)(c) of the Act has been struck down by the Tribunal, the assessing officer has no other alternative except to correct his order under Section 154 of the Act as per the directions of the Tribunal. As already noticed, the subject-matter of the complaint before this Court is concealment of income arrived at on the basis of the finding of the assessing officer. If the Tribunal has set aside the order of concealment and penalties, there is no concealment in the eye of the law and, therefore, the prosecution cannot be proceeded with by the complainant and further proceedings will be illegal and without jurisdiction. The Assistant Commissioner of Income Tax cannot proceed with the prosecution even after the order of concealment has been set aside by the Tribu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e two sets of decisions. It will not make any difference on principle that latter judgments pertain to cases under the Income Tax Act. The ratio which can be culled out from these decisions can broadly be stated as follows :- (i) Adjudication proceeding and criminal prosecution can be launched simultaneously; (ii) Decision in adjudication proceeding is not necessary before initiating criminal prosecution; (iii) Adjudication proceeding and criminal proceeding are independent in nature to each other; (iv) The finding against the person facing prosecution in the adjudication proceeding is not binding on the proceeding for criminal prosecution; (v) Adjudication proceeding by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20 (2) of the Constitution or Section 300 of the Code of Criminal Procedure; (vi) The finding in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceeding is on technical ground and not on merit, prosecution may continue; and (vii) In case of exoneration, however, on me....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e accused persons are exonerated by the competent authorities/Tribunal in adjudication proceedings, one will have to see the reasons for such exoneration to determine whether these criminal proceedings should still continue. If the exoneration in departmental adjudication is on technical ground or by giving benefit of doubt and not on merits or the adjudication proceedings were on different facts, it would have no bearing on criminal proceedings. If, on the other hand, the exoneration in the adjudication proceedings is on merits and the concerned person(s) is/are innocent, and the criminal prosecution is also on the same set of facts and circumstances, the criminal prosecution cannot be allowed to continue. The reason is obvious criminal complaint is filed by the departmental authorities alleging violation/ contravention of the provisions of the Act on the part of the accused persons. However, if the departmental authorities themselves, in adjudication proceedings, record a categorical and unambiguous finding that there is no such contravention of the provisions of the Act, it would be unjust for such departmental authorities to continue with the criminal complaint and say that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dings by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20(2) of the Constitution or Section 300 of the Code of Criminal Procedure; (vi) The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceedings is on technical ground and not on merit, prosecution may continue; and (vii) In case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher stan- dard of proof in criminal cases". 19. Clarifying the position, the majority observed that the yardstick would be to judge as to whether the allegation in the adjudication proceedings as well as the proceeding for prosecution is identical and the exoneration of the person concerned in the adjudication proceedings is on merits. In case it is found on merit that there is no contravention of the provisions of the Act in the adjudication proceedi....