1986 (10) TMI 315 - HC - VAT and Sales Tax

Summary

Issues:
1. Setting aside the order passed by the Metropolitan Magistrate
2. Quashing the proceedings in the case FIR
3. Allegation of maintaining incorrect accounts and furnishing false information
4. Interpretation of section 50(1)(j) of the Delhi Sales Tax Act
5. Application of inherent powers under section 482 of the Code
6. Defence arguments regarding mens rea and sales on consignment basis

Analysis:
The petitioner filed a petition under section 482 of the Code of Criminal Procedure seeking to set aside the order passed by the Metropolitan Magistrate and to quash the proceedings in the case FIR. The petitioner, as the Company Secretary of M/s. Jain Sudh Vanaspati Ltd., was accused of maintaining incorrect accounts and furnishing false information regarding the export of palm oil to M/s. Hind Agencies, Barabanki (U.P.). The alleged offence fell under section 50(1)(j) of the Delhi Sales Tax Act, which deals with knowingly providing incorrect information. The petitioner argued for quashing the complaint and proceedings under the inherent powers of the High Court.

The petitioner relied on Supreme Court authorities, emphasizing that proceedings can only be quashed if no offence is constituted based on the face of the complaint or accompanying papers. The key issue revolved around the false information provided by the petitioner regarding the dispatch of goods from the company's Delhi warehouse to M/s. Hind Agencies, Barabanki (U.P.), whereas the goods were directly sent from Bombay to various railway stations in U.P. The prosecution contended that the information furnished was factually incorrect and punishable under section 50(1)(j) of the Act.

The defence argued that the information provided was in line with normal trade practices, involving sales on a consignment basis. They also raised the point that the alleged offence lacked the necessary mens rea on the part of the accused persons. However, the Court held that these matters of defence should be considered by the trial court and could not be grounds for quashing the complaint and proceedings under section 482 of the Code. The Court dismissed the petition, stating that the allegations in the complaint and the false information provided warranted further trial and could not be dismissed at this stage.

In conclusion, the judgment focused on the interpretation of the Delhi Sales Tax Act, the application of inherent powers under section 482 of the Code, and the distinction between factual accuracy and legal implications of the information provided by the petitioner. The Court emphasized that the defence arguments regarding trade practices and mens rea should be addressed during the trial proceedings and were not sufficient grounds for quashing the complaint and proceedings at the High Court level.