M/S.Vasanthi Agencies v. Additional Deputy Commercial

=IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on : 18-9-2015 Pronounced on : 5-10-2015

CORAM:

THE HON'BLE MR. JUSTICE P.N.PRAKASH Criminal Original Petition No.2647 of 2009 M.P.Nos.1 & 2 of 2009 1.

M/s.Vasanthi Agencies, rep.by P.Vasanthi, R.S.No.52/4, East Coast Road, Mudaliarpet, Puducherry-605004 P.Vasanthi .. Petitioners Vs.

Additional Deputy Commercial Tax Officer, Intelligence Wing, Commercial Taxes Department, 100 Feet Road, Puducherry .. Respondent Criminal Original Petition filed under Section 482 of Code of Criminal Procedure with a prayer to call for the records relating to the impugned complaint in C.C.No.339 of 2008 on the file of the learned Judicial Magistrate No.I, Pondicherry, and quash the same.

For Petitioners :

Mr.N.Inbarajan, for Mr.V.R.Shanmuganathan For Respondent :

Mr.M.R.Thangavel, Additional Public Prosecutor (Puducherry)

O R D E R

It is the case of the prosecution that M/s.Vasanthi Agencies (A-1), in which M.Saravanan (A-2) and P.Vasanthi (A-3) are partners, are into the business of re-sale of petrol, diesel, lubricant oil, etc., and are registered dealer under the Pondicherry General Sales Tax Act, 1967; Central Sales Tax Act, 1956; and Pondicherry Value Added Tax Act, 2007. The allegations against the petitioners have been set out in

paragraph 3 of the complaint, which is as follows: "During the financial year 2001-2002, the accused No.1 along with accused No.2 and accused No.3 reported the following sales turnover in Form A2 under Rule 18 of the PGST Rules, 1967:

Sl.No Period Total Turnover Exempted Turnover Taxable Turnover Tax paid 01.

April 2001 2917685.68 Nil 2917685.68 02.

May 2001 2908156.94 Nil 2908156.94 03.

June 2001 3265129.86 375474.00 2889655.86 04.

July 2001 3153420.371 101066.00 3052354.37 05.

August 2001 846433.12 Nil 846433.12 1922665 06.

September 2001 1015473.86 164608.00 850865.86 07.

October 2001 850331.72 11254.00 839077.72 08.

November 2001 362622.55 Nil 362622.55 09.

December 2001 378460.37 Nil 378460.37 10.

January 2002 411783.02 Nil 411783.02 11.

February 2002 674190.38 258780.00 415410.38 12.

March 2002 424693.52 Nil 424693.52 Total 17208382.29 911182.00 10297200.29 1922665 The Assessing Authority issued a pre-assessment notice dated 30.6.2007, which was received by the accused, but, they failed to respond. The Assessing Authority gave another opportunity to the accused by notice dated 4.10.2007, to which also there was no response from the accused. They were asked to appear before the authority on 16.7.2007 to contest the proposed assessment of tax, despite which they did not appear. Therefore, the Assessing Authority completed assessment as contemplated under Section 13(2) of the Pondicherry General Sales Tax Act, 1967 read with section 81 of the Pondicherry Value Added Tax Act, 2007, and the assessment order dated 28.7.2007 was passed assessing the tax at Rs.1,29,54,404/- and penalty of Rs.1,27,65,150/- was imposed. On the failure of the accused to pay the tax and the penalty, the present complaint in C.C.No.339 of 2008 was launched before the Judicial Magistrate No.I, Pondicherry, challenging which the accused are before this Court.

3.

Mr.V.R.Shanmuganathan, learned Counsel appearing for the accused submitted that the accused being charged for the offence under Section 49 sub-section (2)(b) of the Pondicherry General Sales Tax Act, 1967, which reads as follows:

"49. Offences and Penalties.-

(1) ............

(2) Any person who- (a) wilfully submits an untrue return, or, not being already an Assessee under this Act, fails to submit a return as required by the provisions of this Act, or the Rules made thereunder, or (b) fraudulently evades the payment of any tax assessed on him or any fee or other amount due from him under this Act." for maintaining complaint there should be material to show that there was fraudulent evasion of payment of tax, and that the complaint does not disclose that there was fraudulent evasion. He further contended that before prosecuting the accused under Section 49(2)(b), it is the duty of the authorities to take steps for recovery under Section 27 of the Act, without which the prosecution is not sustainable. In support of his contention he relied upon S.R.Swamy In re (1967) 19 STC 261; Ashok Leyland Ltd v. State of Tamilnadu (134 STC 473) and Shrisht Dhawan v. M/s.Shaw Brothers (AIR 1992 SC 1555). 4.

In S.R.Swamy's case, this Court was dealing with a revision after the accused were convicted in a full-fledged trial. In the considered opinion of this Court, the prosecution should be given an opportunity to prove the ingredients of the provisions of Section 49(2)(b), and the prosecution cannot be stifled at such an early stage under Section 482 Cr.P.C. The fact remains that the petitioners had evaded payment of huge amount of tax, and they were given sufficient notice to explain their stand, despite which they did not respond, which necessitated the authorities to pass the assessment order. 5.

The learned counsel relied upon various passages in Shrisht Dhawan's case relating to what fraud is ? In the same Judgment, the Hon'ble Supreme Court had stated that "But fraud in public law is not the same as fraud in private law". This case arose under the Delhi Rent Control Act, where the dispute was between the landlord and the tenant. Here, the dispute is with regard to suppression of sales resulting in huge loss to the exchequer. Thus, the proposition laid down in Shrisht Dhawan's case may not be of much assistance to the petitioners. 6.

In Ashok Leyland's case, the interpretation of Section 6A of the Central Sales Tax Act, 1956 came up for consideration and the appeals arose against the orders passed by the Tamil Nadu Sales Tax Appellate Tribunal. The facts in that case is totally different from the facts that obtains in the case in hand.

7.

As regards the contention that the authorities should first resort to recovery proceedings, and only thereafter they should launch prosecution under Section 49(2)(b) is an argument in vain, inasmuch as the very provision empowers the authorities to prosecute an offender if he has not paid the assessed tax. In fact, in the complaint filed by the department in the prayer portion they have also invoked the provision of Section 27(2)(b) of the Act to take steps for recovery of the tax due as fine. 8.

In the result, this petition is devoid of merits and consequently the same is dismissed. Connected miscellaneous petitions are also dismissed.

sd/- ASSISTANT REGISTRAR(CO) / TRUE COPY / SUB-ASSISTANT REGISTRAR vr To 1.

The Additional Deputy Commercial Tax Officer, Intelligence Wing, Commercial Taxes Department, 100 Feet Road, Puducherry The Public Prosecutor (Puducherry), High Court, Madras. +1 CC to Mr.T.Panchatsaram Advocate. SR.NO. 53857 Pre-Delivery Order in Crl.O.P.No.2647 of 2009 CO-KJI JD 19/10/2015