2015 (3) TMI 631 - HC - VAT and Sales Tax

Request for quashing of criminal proceedings against appellant - Evasion of tax - Interception of truck - Discrepancy in bills of the goods - Held that - Admittedly, on 20.5.2010, vehicle bearing No. PB 11-AP- 3969 was intercepted by Ominder Singh, Excise and Taxation Officer during general checking under Section 51 of the Act. On checking, the driver of the vehicle produced two bills and stated that the same had been prepared to avoid payment of entry tax. A show cause notice was issued to the owner of the goods through driver of the vehicle on 21.5.2010. The goods were detained under Section 51(6) (b) of the Act for verification. On 21.5.2010, son of petitioner No.3 appeared before the Detaining Officer. Vide order dated 21.5.2010 (Annexure P2), penalty to the tune of ₹ 20,790/- was imposed under Section 51(7)(C) of the Act. Admittedly, the penalty amount was deposited and the goods in question were released to the owner. The said fact is also evident from the cancellation report - Thus, in the present case, proceedings under Section 51 (7)(C) of the Act were carried out and penalty was imposed qua the attempt to evade tax on the taxable goods worth ₹ 41,580/-. The penalty imposed under the Act has been duly deposited by the owner of the goods. Consequently, the goods were released to the owner. In thesse circumstances, continuation of criminal proceedings against the petitioners would be nothing but an abuse of process of law. - Decided in favour of appellant.

Summary

Issues:
Petition under Section 482 of Cr.P.C. for quashing of FIR registered under various sections of IPC - Validity of criminal proceedings after penalty imposition under Section 51 of the Punjab Value Added Tax Act - Abuse of process of law.

Analysis:
The petitioners filed a petition under Section 482 of the Cr.P.C. seeking the quashing of FIR No. 101 dated 20.5.2010 registered under Sections 420/467/468/471/474/120-B of the IPC at Police Station Patran, District Patiala, and all subsequent proceedings arising from it. The prosecution alleged that the driver was carrying goods under wrong documents, leading to the initiation of proceedings under Section 51 of the Punjab Value Added Tax Act, 2005. A penalty was imposed under Section 51(7)(C) of the Act, which was duly deposited by the petitioners, resulting in the preparation of a cancellation report by the Investigating Agency. However, a challan was later presented against the petitioners, leading to the dispute.

The counsel for the petitioners argued that due to the penalty imposition and subsequent actions, the continuation of criminal proceedings would amount to an abuse of process of law. On the other hand, the State counsel contended that the petitioners had prepared incorrect bills regarding the goods, justifying the continuation of criminal proceedings against them. The interception of the vehicle on 20.5.2010 led to the issuance of a show cause notice and the detention of goods for verification under Section 51(6)(b) of the Act. The penalty imposed was duly paid, and the goods were released to the owner, as evidenced by the cancellation report.

The Court observed that the penalty under Section 51(7)(C) of the Act had been imposed and deposited by the owner of the goods, leading to the release of the goods. Consequently, the Court deemed the continuation of criminal proceedings against the petitioners as an abuse of the legal process. Therefore, the petition was allowed, and FIR No. 101 dated 20.5.2010, along with all subsequent proceedings, was quashed.