2015 (3) TMI 960 - HC - VAT and Sales Tax

Violation of Punjab Value Added Tax Act, 2005 - Allegation of theft of sales tax - Driver of the truck did not stop at check post - driver misbehaved and did not produce any document with regard to the goods being carried in the truck, thereby creating an obstruction in discharge of Government work - Held that - A perusal of the Section 51(4) and 51(7)(a) and (b) clearly shows that there is a provision of penalty to be imposed in case a goods vehicle is proceeding without the requisite documents or it is found on inquiry that there is an attempt to avoid or evade tax. The Act which is a complete code in itself, does not provide for initiation of criminal proceedings in the matter of evasion of tax. This court in (Annexure P-3) has held that the provisions of VAT Act, 2005 are sufficient and equipped to deal with the matters where an attempt is made to evade the tax and registration of the FIR is an abuse of the process of law. In the present case, no offence punishable under Section 420, IPC also is made out against the petitioner on the allegations levelled. Furthermore, admittedly entire amount due along with the penalty has been paid by the petitioner. - Petitioner was undoubtedly not present at the spot when the vehicle was apprehended. Therefore, there is no question of the commission of offences punishable under Sections 186 and 353, IPC qua the petitioner. - Decided against Petitioner.

Summary

Issues:
Quashing of FIR under Sections 353, 186, and 420 IPC based on evasion of tax and violation of Punjab Value Added Tax Act, 2005.

Analysis:
The judgment involves a petition filed under Section 482 of the Code of Criminal Procedure seeking the quashing of FIR No. 138 dated 12.10.2012, under Sections 353, 186, and 420 IPC, registered at Police Station Talwandi Sabo, District Bathinda. The petitioner, a partner of a transport company, was implicated based on allegations of obstructing government work and committing theft of sales tax, along with violations of the Punjab Value Added Tax Act, 2005. The petitioner argued that no offenses were made out against them, especially under Sections 186 and 353 IPC, as they were not present at the spot during the incident. The petitioner contended that the Punjab VAT Act only provides for penalties in cases of tax evasion and does not warrant criminal proceedings under Section 420 IPC. The petitioner had also deposited the entire amount due along with the penalty, as evidenced by Annexure P-2, further supporting their argument against the criminal charges.

The State, on the other hand, claimed that tax evasion was evident from the petitioner's actions of depositing the amount post-FIR registration. However, the State failed to provide material showing the commission of offenses under Sections 186 and 353 IPC by the petitioner, who was not present during the incident. The State also did not explain why only one partner was targeted when there were two partners in the firm. The State argued that since the charges were yet to be framed, there were no grounds for quashing the FIR.

The court examined the provisions of the Punjab Value Added Tax Act, specifically Section 51(4) and Section 51(7)(a) and (b), which outline penalties for evasion of tax and the procedures for inquiry and imposition of penalties. The court noted that the Act does not provide for criminal proceedings in cases of tax evasion and emphasized that the FIR registration was an abuse of the legal process. Considering the circumstances, the court allowed the petition and quashed the FIR and all subsequent proceedings against the petitioner under Sections 353, 186, and 420 IPC.