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2015 (11) TMI 169 - HC - Service TaxRequest for quashing of FIR - Recovery of service tax dues - Held that - The moment petitioner received any demand put to him by the competent authority, he immediately deposited the amount of ₹ 1,05,705/-, which is so mentioned in the official communication (Annexure P-3). This amount deposited by the petitioner reflected in Annexure P-3, was towards service tax because this fact has also not been disputed by learned counsel for the State. - when the Act of 1994 was a special Act, which would prevail upon the general provisions, he had no answer and rightly so, it being a matter of record. It has also not been argued on behalf of the respondent-State that any competent authority, after following the procedure provided under the abovesaid relevant provisions of law contained in the Act of 1994, has arrived at a conclusion, pointing out any financial liability of the petitioner, which might have been outstanding against him. Having said that, this Court feels no hesitation to conclude that once the Act of 1994 was a special and complete Code in itself, wherein even the procedure for penalty has been provided, governing the fact situation as obtaining in the present case, registration of the impugned FIR was nothing but abuse of process of Court and the same cannot be sustained. If any competent authority, after following the procedure laid down under the Act of 1994, comes to the conclusion that some amount was outstanding against the petitioner on account of service tax or any other financial liability for that purpose, petitioner would not be running away from his legal obligation and he would deposit the same, as he had been doing on earlier occasions also. In this view of the matter, it can be safely concluded that continuation of the criminal proceedings arising out of the impugned FIR, would certainly result in further abuse of process of Court, therefore, the same cannot be sustained, for this reason as well. - as an abundant precaution that the competent authority under the Act of 1994, would be at liberty to proceed further against the petitioner, as per the procedure provided therein. If the competent authority, after following the procedure under the Act of 1994 arrives at a conclusion that petitioner is liable to pay any amount, he shall be duty bound to pay the same, in accordance with law. - Decided in favour of assessee.
Issues:
Quashing of FIR under Section 406 IPC for non-payment of service tax; Competence of authority under Finance Act, 1994; Abuse of process of Court; Applicability of general provisions of IPC in special statutes. Analysis: The petitioner sought quashing of FIR under Section 406 IPC for non-payment of service tax. The petitioner contended that all outstanding amounts were paid promptly upon demand, as evidenced by official communications. The petitioner argued that the Act of 1994, being a special Code, governed the recovery and penalty procedures, making the FIR unwarranted. Citing the Supreme Court's ruling, the petitioner emphasized that general IPC provisions did not apply to the Act of 1994. The State, however, maintained that non-payment of service tax constituted a criminal offense, irrespective of subsequent payments made by the petitioner. The Court noted that the Act of 1994 provided specific provisions for interest and penalties related to service tax payments. It acknowledged the petitioner's immediate payment upon demand, as reflected in official communications. The Court highlighted the conflict between the special Act and general IPC provisions, emphasizing the precedence of the former in such cases. Relying on the Supreme Court's decision in a similar matter, the Court concluded that the registration of the FIR was an abuse of the legal process and should be quashed. The judgment emphasized that the competent authority under the Act of 1994 could pursue the matter independently. The Court directed that if the authority determined any outstanding liabilities, the petitioner must comply with the legal obligations. Consequently, the petition was allowed, quashing the FIR and associated criminal proceedings to prevent further misuse of the legal system. The judgment clarified that the competent authority could proceed as per the Act of 1994 to determine any financial liabilities, ensuring justice while avoiding unnecessary criminal proceedings. In conclusion, the Court's decision to quash the FIR under Section 406 IPC was based on the special provisions of the Act of 1994 governing service tax matters. The judgment safeguarded against the abuse of legal processes and highlighted the importance of following specific statutes in such cases. The petitioner was directed to comply with any legitimate liabilities determined by the competent authority under the Act of 1994, ensuring legal obligations were met appropriately.
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