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2017 (4) TMI 876 - HC - VAT and Sales Tax


Issues Involved:
1. Whether the First Information Report (FIR) should be quashed.
2. Whether the provisions of the Indian Penal Code (IPC) can be invoked simultaneously with the Gujarat Value Added Tax Act, 2003.
3. Whether the police have the authority to investigate offences under the Gujarat Value Added Tax Act, 2003.

Detailed Analysis:

1. Whether the First Information Report (FIR) should be quashed:
The applicant sought to quash the FIR registered under various sections of the IPC and the Gujarat Value Added Tax Act, 2003. The court considered whether the FIR should be quashed, particularly focusing on the overlap between the special statute (Gujarat Value Added Tax Act) and the general statute (IPC).

2. Whether the provisions of the Indian Penal Code (IPC) can be invoked simultaneously with the Gujarat Value Added Tax Act, 2003:
The applicant argued that when a special statute exists, the general statute (IPC) should not be invoked for the same act. However, the court referred to the Supreme Court's decision in the case of State of West Bengal vs. Narayan K. Patodia, where it was held that offences under the IPC do not get displaced merely because the accused has committed an offence under a special statute. The court emphasized that the FIR included offences under the IPC that are not covered by the Gujarat Value Added Tax Act, such as Sections 406, 409, 420, 465, 468, 471, 474, 477(A), and 120B of the IPC.

The court also referred to the Supreme Court's decision in Institute of Chartered Accountants of India vs. Vimal Kumar Surana, which held that a person could be prosecuted under both the special statute and the IPC if the act constitutes an offence under both laws. This principle was reiterated in the Punjab and Haryana High Court's decision in Sharanjit Singh vs. State of Punjab, where it was held that the fabrication of documents could be prosecuted under the IPC even if it also constituted an offence under the VAT Act.

3. Whether the police have the authority to investigate offences under the Gujarat Value Added Tax Act, 2003:
The applicant contended that under Section 88 of the Gujarat Value Added Tax Act, the investigation should not be entrusted to the police. However, the court noted that Section 88 allows the Commissioner to authorize officers to investigate offences under the Act, and these officers have the same powers as police officers under the Code of Criminal Procedure.

The court referred to the Supreme Court's decision in State of West Bengal vs. Narayan K. Patodia, which clarified that there is no prohibition in the statute against police officers carrying out investigations when offences under both the special statute and the IPC are involved. The court held that the police could conduct the investigation, especially since the allegations involved serious charges of tax evasion amounting to ?24 Crore and forgery of documents.

Conclusion:
The court concluded that the FIR should not be quashed, as the offences under the IPC do not get displaced by the Gujarat Value Added Tax Act. The court also held that the police have the authority to investigate the offences, and the investigation should be allowed to proceed. The application to quash the FIR was rejected.

 

 

 

 

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