2014 (9) TMI 1286 - HC - VAT and Sales Tax

Seeking quashing of the FIR - there was neither sale nor purchase of the goods - evasion of tax - HELD THAT - After going through the facts of the present case, this Court is of the view that under the VAT Act, 2005, there is a complete Code for initiate proceedings against a consignee, who makes an attempt to evade the tax. Registration of FIR would amount to an abuse of the process of Court and this fact had not been disputed by the respondents at the time when CRM-M-24853 of 2012 was allowed on 30.04.2013 (Annexure P-3). Since the Act provides for recovery and imposition of penalty, if an attempt is made to evade payment of VAT, registration of FIR is liable to be quashed. Resultantly, FIR No. 104 dated 25.07.2012, under Sections 420, 467, 471, 120-B IP, registered at Police Station, Shambhu, District Patiala (Annexure P-1) is quashed with all consequential proceedings arising therefrom qua the petitioner. Petition allowed.

Summary

Issues: Quashing of FIR under Section 482 Cr.P.C.

Analysis:
The petitioner sought the quashing of FIR No. 104 dated 25.07.2012, under Sections 420, 467, 471, 120-B IP, registered at Police Station, Shambhu, District Patiala. The FIR was based on a complaint by the Excise and Taxation Officer, alleging tax evasion related to the transportation of goods. The petitioner, a cleaner on the truck, was implicated in the FIR. It was argued that the petitioner was not involved in the sale or purchase of the goods in question, and the bill of lading indicated the involvement of other parties. The petitioner contended that the truck driver, who accused him, had a personal vendetta. Notably, a similar FIR against the petitioner had been quashed earlier by the Court.

In both the present case and the previous FIR, the bill of lading was issued by M/s Sony Mechanical and Workshop. The goods were intended for delivery to a specific individual, and the seller was registered under the Punjab VAT Act, 2005. The petitioner argued that the VAT Act provides a comprehensive framework for dealing with tax evasion, and there is no provision for registering an FIR under the Indian Penal Code for such matters. Sections 57 and 58 of the Punjab VAT Act, 2005, outline penalties for offenses related to false invoices and VAT registration numbers.

The respondent argued that the petitioner had engaged in fraudulent activities by providing false information to evade tax obligations. Statements from witnesses and the proprietor of M/s Sony Mechanical and Workshop were presented to support this claim. It was alleged that the petitioner had booked goods with fake addresses to cheat the state of its legitimate tax revenue. While acknowledging the petitioner's actions, the respondent agreed that the petitioner could be proceeded against under Sections 57 and 58 of the VAT Act, 2005.

The Court, after reviewing the facts, concluded that the VAT Act, 2005, provides a comprehensive legal framework to address tax evasion issues. Registration of an FIR in such cases was deemed an abuse of the legal process, especially when the Act itself outlines penalties and procedures for handling tax-related offenses. Consequently, the Court quashed FIR No. 104 dated 25.07.2012, along with all consequential proceedings against the petitioner.

In summary, the judgment focused on the adequacy of the Punjab VAT Act, 2005, in addressing tax evasion matters and emphasized the need to avoid duplicative legal proceedings when a specific statute already governs the relevant offenses.