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Issues:
1. Challenge to the order refusing to stay criminal prosecution based on application to Settlement Commission under section 245H of the Income-tax Act. 2. Interpretation of section 245H regarding immunity from prosecution for offences under Income-tax Act and Indian Penal Code. 3. Application of section 245K in relation to settlement orders and subsequent convictions. 4. Timing of application for settlement in relation to the filing of a complaint. 5. Discretion of the Magistrate in granting stay of prosecution. Analysis: 1. The revision applications challenged the order of the Metropolitan Magistrate refusing to stay the criminal prosecution based on an application made to the Settlement Commission under section 245H of the Income-tax Act. The court noted that mere submission of an application to the Settlement Commission does not automatically require the prosecution to be stayed, as the power to grant immunity lies with the Settlement Commission and not the criminal court. 2. Section 245H grants immunity from prosecution for offences under the Income-tax Act and the Indian Penal Code, subject to conditions imposed by the Settlement Commission. The court emphasized that until the application for settlement is granted, there is no immunity, and the criminal court cannot provide temporary immunity by staying the prosecution. The discretion to grant immunity rests with the Settlement Commission, and the criminal court cannot interfere in this process. 3. The court discussed the application of section 245K, which states that a person convicted of an offence under Chapter XXII after a settlement order shall not be entitled to apply for settlement in any other matter. However, in the absence of a settlement order, conviction, or offence under Chapter XXII, this provision was deemed inapplicable to the case at hand. 4. In another case, the Magistrate rejected an application for settlement made after the filing of a complaint, stating that the provisions of Chapter XIXA of the Income-tax Act, including section 245A, do not apply once a complaint is filed. The court agreed with this interpretation, emphasizing that an application for settlement can only be made when a 'case' is pending before a tax authority, not after the complaint stage. 5. The discretion of the Magistrate in granting a stay of prosecution was discussed, with the petitioner arguing for a remand if the discretion was not exercised in accordance with the law. However, the court held that given the clear legal position that prosecution need not be stayed until immunity is granted, remanding the matter would serve no useful purpose, leading to the rejection of both revision applications.
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