JUDGMENT

Arijit Pasayat, J.-Prosecution was launched against the appellants for alleged concealment of income and thereby willfully attempting to evade tax, and for making false statement on verification in terms of Sections 276C of the Income Tax Act, 1961 (in short the Act ) relating to the assessment year 1988-89. Cognizance was taken by the Special Court, Economic Offences, Muzaffarpur, Bihar in complaint case No. 50 of 1992 instituted by the Income Tax Authorities. Petitions under Section 482 of the Code of Criminal Procedure, 1973 (in short the Code ) were filed by appellant No.1 (hereinafter referred to as the firm ) and L.N. Poddar, a partner of the assessee firm before the Patna High Court. The specific stand of the petitioners before the High Court was that the proceedings should not continue as applications for settlement were filed and pending before the Settlement Commission, Income Tax and Wealth Tax (hereinafter referred to as the Commission ). The High Court did not accept the stand as no order granting any immunity had been passed by the Commission. Referring to the factual position also it was held that no case for interference was made out at the relevant stage.

2. Mr. S.K. Gupta, learned counsel for the appellants submitted that in the meantime Settlement Commission has passed necessary orders in the matter and, therefore, proceedings should not be continued. Reference was made to Order No. 3/3/5/91-IT dated 20.9.1999 passed by the Commission.

3. Mr. H.L. Agrawal, learned senior counsel for the respondents submitted that the immunity if granted by the Commission is a conditional one, and unless there is fulfillment of the conditions stipulated, the proceedings have to be continued. According to him, it is open to the appellants to appear before the Trial Court and bring to its notice any order which has relevance in the matter.

4. In order to appreciate the rival stands, it would be necessary to take note of Section 245 (H) of the Act. It reads as under:

"SECTION 245H : POWER OF SETTLEMENT COMMISSION TO GRANT IMMUNITY FROM PROSECUTION AND PENALTY.

(1) The Settlement Commission may, if it is satisfied that any person who made the application for settlement under section 245C has co-operated with the Settlement Commission in the proceedings before it and has made a full and true disclosure of his income and the manner in which such income has been derived, grant to such person, subject to such conditions as it may think fit to impose, immunity from prosecution for any offence under this Act or under the Indian Penal Code (45 of 1860) or under any other Central Act for the time being in force [and also (either wholly or in part) from the imposition of any penalty] under this Act, with respect to the case covered by the settlement :

[Provided that no such immunity shall be granted by the Settlement Commission in cases where the proceedings for the prosecution for any such offence have been instituted before the date of receipt of the application under section 245C.]

[(1A) An immunity granted to a person under sub-section (1) shall stand withdrawn if such person fails to pay any sum specified in the order of settlement passed under sub-section (4) of section 245D within the time specified in such order or within such further time as may be allowed by the Settlement Commission, or fails to comply with any other condition subject to which the immunity was granted and thereupon the provisions of this Act shall apply as if such immunity had not been granted.]

(2) An immunity granted to a person under sub-section (1) may, at any time, be withdrawn by the Settlement Commission, if it is satisfied that such person had, in the course of the settlement proceedings, concealed any particulars material to the settlement or had given false evidence, and thereupon such person may be tried for the offence with respect to which immunity was granted or for any other offence of which he appears to have been guilty in connection with t