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Issues:
- Interpretation of Section 26(2) of the C. P. and Berar Sales Tax Act - Applicability of time limitation for prosecution under Section 26(2) - Whether the appellants acted under the provisions of the Act when filing false returns - Justification for quashing the proceedings based on the interpretation of the Act Interpretation of Section 26(2) of the C. P. and Berar Sales Tax Act: The case involved a dispute regarding the interpretation of Section 26(2) of the C. P. and Berar Sales Tax Act, which states that no prosecution or suit can be instituted against any person in respect of anything done under the Act unless it is initiated within three months from the date of the act complained of. The appellants argued that the phrase "any person" in the section should be interpreted broadly to include all individuals, not just government servants. The court agreed with this interpretation, emphasizing that there were no restrictions on the term "any person" and that the intention of the Legislature was to provide protection to all persons under the Act. Applicability of time limitation for prosecution under Section 26(2): The central issue revolved around whether the prosecution of the appellants for filing false returns was time-barred under Section 26(2) of the Act. The defense contended that the prosecution was initiated more than three months after the alleged offense, thus violating the time limitation. The lower courts had rejected this argument, stating that the provision did not apply to individuals who were not government servants. However, the Supreme Court disagreed, ruling that the appellants fell within the scope of "any person" under the Act and were entitled to the protection provided by Section 26(2). Whether the appellants acted under the provisions of the Act when filing false returns: Another crucial aspect of the case was whether the appellants could be considered as acting under the provisions of the Act when submitting false returns. The High Court had rejected a reference to quash the proceedings, arguing that the appellants did not act under the Act when committing the alleged offense. However, the Supreme Court disagreed with this reasoning, stating that the appellants submitted their returns and produced accounts under specific sections of the Act, thereby falling within the ambit of the legislation. The Court emphasized that the actions of the appellants were indeed governed by the provisions of the Act, contrary to the High Court's opinion. Justification for quashing the proceedings based on the interpretation of the Act: Ultimately, the Supreme Court held that the High Court erred in rejecting the reference and quashed the proceedings against the appellants. The Court reiterated that the actions of the appellants, including filing false returns and producing incorrect accounts, were conducted under the provisions of the Act. Therefore, the High Court's reasoning that the appellants did not act under the Act was deemed unsustainable. Consequently, the appeals were allowed, the High Court's order was set aside, and the proceedings in the trial court were terminated. In conclusion, the Supreme Court's judgment clarified the interpretation of Section 26(2) of the C. P. and Berar Sales Tax Act, affirmed the applicability of time limitations for prosecution, and established that the appellants' actions were indeed governed by the provisions of the Act.
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