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2011 Supreme(Mad) 2721
High Court of Judicature at Madras
G.M. AKBAR ALI
T.K. Raghavan & Another
Versus
Commercial Tax Officer
CRL.OP.Nos.21697 & 21698 of 2010
Decided on : 13-06-2011
For the Appellants:Yashod Vardhan, Senior Counsel for K. Raja Shrinivas, Advocate.
For the Respondent: T.P. Manoharan, Spl.P.P Commercial Taxes (Pondy.).
The main legal point established in the judgment is that the prosecution for time-barred escaped turnover and invoking penal provisions was an abuse of process of law, and no offense could be made out even if the entire allegation was taken to be true on its face value.
Headnote:
Puducherry General Sales Tax Act - Tax Evasion - Sections 49(2)(a), Rules 14 and 16 of CST (Pondicherry) Rules, 193, 409, 468 IPC - The court discussed the provisions of the Puducherry General Sales Tax Act, the CST (Pondicherry) Rules, and the Indian Penal Code. It highlighted the limitations for assessing escaped turnover, the penalties for submitting untrue returns, and the relevance of the repealed Act in prosecuting offenses.
Fact of the Case:
The petitioners, partners of a retail outlet, were accused of tax evasion by suppressing turnover. They sought to quash the proceedings citing limitations, non-applicability of criminal offenses, and abuse of process of law.
Finding of the Court:
The court found that the prosecution for time-barred escaped turnover and invoking penal provisions was an abuse of process of law, and no offense could be made out even if the entire allegation was taken to be true on its face value.
Issues: The issues involved the applicability of limitations for assessing escaped turnover, the relevance of penal provisions, and the abuse of process of law.
Ratio Decidendi: The court held that the prosecution for time-barred escaped turnover and invoking penal provisions was an abuse of process of law, and no offense could be made out even if the entire allegation was taken to be true on its face value.
Final Decision: The criminal original petition was allowed, and the proceedings in C.C.Nos.21 and 22 of 2009 were quashed.
1. By consent of both sides, the matter is taken up for final hearing. The petition is filed seeking a direction to call for the records in C.C.Nos.21 and 22 of 2009 on the file of the learned Judicial Magistrate, Mahe under sections 49(2)(a) of Puducherry General Sales
Tax Act, Rules 14 and 16 of the CST (Pondicherry) Rules read with 193, 409, 468 IPC and quash the same.
2. The petitioners are the partners of Surya Service Station, a retail outlet of Petrol, Diesel and Petroleum products at Palloor, Mahe, Union Territory of Pondicherry. They are registered under Pondicerry General Sales Tax Act 1967, under the Central Sales Tax Act 1957 and under the Puducherry Value Added Tax Act 2007. They are liable for Commercial Tax for the total and taxable turn over. The partnership firm (hereinafter referred as “Firm) filed a return of annual turn over in Form-A-1 for the year 2000-2001 and also for the year 2001-2002.
3. For the year ended upto 31.3.2001, the Firm reported a total and taxable Turnover of Rs.4,18,85,213.56 with tax due of Rs.50,25,809.52. For the year ended up upto 31.3.2002, a taxable turnover of Rs.4,32,53,519.15 with tax due of Rs.51,90,422.28 was filed.
4. On placement of relevant returns and books of accounts and also the 'C' forms the Commercial Tax Officer, Mahe accepted the returns and books of accounts and passed an Assessment Order 0n 5.1.2005 for both the assessment years.
5. However, acting on a tip off, the respondent, Commercial Tax Officer, Mahe obtained Form C declaration from M/s Hindustan Petroleum Corporation, Chennai on 29.12.2008. The Form “C” would reveal that the firm had purchased the petrol, diesel and petroleum products for the value of Rs.7,78,30,704.92 for the year 2000-2001 and for Rs.7,38,74,437.58 for the year 2001-2002.
6. Therefore, the respondent found the actual purchase and turn over was not shown by the petitioners in their returns. A huge unexplained difference of Rs.3,47,03,278.26 for the year 2000-2001 and a sum of Rs.2,29,34,144.31 was the difference and thereby they have suppressed the purchase and sale with a view to defraud the Government.
7. The respondent had filed a detailed complaint for the offence punishable under Rule 14 and 16 of CST (Pondicherry) Rules 1967 and Sec.49 (2) (a) of the Pondicherry General Sales Tax Act 1967 read with Sec.81 of the Puducherry Value Added Tax Act 2007 and also under Secs.193, 409, 468 read with 34 of IPC.
8. The learned Judicial Magistrate at Mahe had taken cognizance of the complaint in C.C.Nos.21 and 22 of 2009. Aggrieved by which, the partners of the Firm have preferred the present petitions under Sec.482 Cr.P.C to quash the proceedings on the following grounds:
1. The assessment was finalised and the order was passed on 5.1.2005. As per Sec.18 (1) of the Pondicherry General Sales Act 1967 (hereinafter referred to Act 1967), proceedings for escape turn over shall be initiated within five years from the order to which the tax relates. Therefore, the respondent ought to have initiated proceedings on or before 31.3.2007. Therefore, it is barred by limitation.
2. The “C” Form is issued while purchasing a product from other States and it is not a property within the meaning of Sec.409 of IPC and there is no question of criminal breach of trust.
3. The allegation that the returns were submitted with incorrect particulars will not attract forgery and there is no question of attracting an offence under Sec.468 of IPC.
4. Similarly, an offence under Sec.193 IPC would not be attracted as the petitioner had not furnished wrong returns.
5. The assessment order was passed on 5.1.2005 and subsequently, Pondicherry General Sales Tax Act itself was replaced by the Puducherry Value Added Tax Act, 2007. Therefore, the respondent cannot invoke the provisions of Sec.49 (2) (a) of the Act 1967 as the same was repealed.
6. Invoking Sec.81 of Puducherry Value Added Tax Act 2007 is not correct as the said provision is not a substantive provision an
