1993 (9) TMI 105 - HC - Income Tax

Extent Of Binding Of Tax Proceedings On Cr. Court, Offences And Prosecution, Prosecution While Appeal Pending

Summary

Issues:
1. Whether the criminal court can proceed with a case while an appeal is pending before the Commissioner of Income-tax (Appeals).
2. Whether the criminal court is bound to adjourn a proceeding when an appeal is pending.

Analysis:
1. The judgment deals with the issue of whether a criminal court can continue with a case while an appeal is pending before the Commissioner of Income-tax (Appeals). The accused persons filed an application to defer the hearing of the case until the appeal was disposed of, but it was rejected by the court. The court held that the result of a proceeding under the Income-tax Act does not automatically bind the criminal court, and the criminal court must independently assess the case before it. The judgment emphasized that the pendency of an appeal does not bar the initiation of criminal prosecution under sections 276C and 277 of the Act. Referring to a previous Supreme Court decision, the court concluded that the launch of prosecution in this case was not illegal.

2. The judgment also addresses whether the criminal court is obligated to adjourn a proceeding when an appeal is pending. The court referred to Section 309 of the Code of Criminal Procedure, 1973, which grants discretionary power to adjourn a hearing if the disposal of a related proceeding under the Income-tax Act is imminent. The court clarified that there is no universal rule requiring indefinite adjournment solely due to a pending proceeding elsewhere. In this case, the court directed the accused to appear before the appellate authority and requested an early hearing of the appeal to be completed by a specified date. The criminal proceeding was stayed until the appeal was disposed of, demonstrating a balanced approach to the issue.

Overall, the judgment provides a detailed analysis of the interplay between criminal proceedings and pending appeals under the Income-tax Act, emphasizing the need for independent assessment by the criminal court and the discretionary power to adjourn proceedings based on the imminent disposal of related appeals.