2014 (12) TMI 1425 - HC - VAT and Sales Tax

Evasion of VAT - intent to evade - Framing of charges - whether omission on the part of the petitioner to furnish information at Information Collection Centre and transporting iron materials via an escape route with an intent to evade payment of Value Added Tax (VAT) constitute offence under Section 415 IPC punishable under Section 420 thereof? - HELD THAT - When the allegations levelled against the petitioner are analysed in the light of ingredients of offence of cheating in view of the provisions of Section 415 IPC it is difficult to concur with the orders passed by the Courts below whereby the petitioner has been charged for commission of offence punishable under Section 420 IPC by the trial Court and the revision petition against the order passed by the trial Court has been dismissed by the Additional Sessions Judge Mansa. Perusal of the order passed by the revisional Court would evident that the Court has neither adverted to the allegations against the petitioner nor bothered to examine those allegations in the light of relevant provisions of IPC particularly the offence of cheating defined in Section 415 thereof. The criminal proceedings against the petitioner are nothing short of abuse and misuse of process of law. It is added that ordinarily this Court would not interfere in the trial proceedings as the charge sheet has been framed and few witnesses have also been examined but the said fact in the circumstances obtaining in the instant case should not deter this Court from exercising its inherent power to prevent blatant abuse and misuse of process of law. The criminal proceedings initiated against the petitioner and orders passed in those proceedings cannot be allowed to sustain and accordingly stand quashed - Petition allowed.

Summary

Issues:
Quashing of criminal proceedings under Section 482 of Cr.P.C. for offence under Section 420 IPC based on allegations of tax evasion and cheating.

Analysis:
The case involved a petition under Section 482 of Cr.P.C. seeking to quash criminal proceedings related to an FIR for an offence under Section 420 IPC. The petitioner was charged for transporting goods without proper documentation to evade Value Added Tax (VAT). The petitioner argued that no offence of cheating under Section 420 IPC was made out. The State contended that since the trial was progressing well, interference under Section 482 Cr.P.C. was not warranted.

Upon analysis, the court considered whether the petitioner's actions constituted an offence under Section 415 IPC, a prerequisite for an offence under Section 420 IPC. The court outlined the essential ingredients of cheating under Section 415 IPC, emphasizing deception, inducing delivery of property, and intentionally inducing actions. The court found that the lower courts had erred in charging the petitioner under Section 420 IPC without proper consideration of the allegations and relevant legal provisions.

The court noted that the revisional Court had not adequately examined the allegations against the petitioner in light of the offence of cheating under Section 415 IPC. It was observed that the State failed to demonstrate how the allegations constituted cheating. Additionally, the court highlighted that the Punjab Value Added Tax Act, 2005, provided specific provisions to address such situations, including imposing penalties and releasing goods upon payment.

Considering the circumstances, the court concluded that the criminal proceedings against the petitioner amounted to an abuse and misuse of the legal process. Despite the trial being underway, the court exercised its inherent power under Section 482 of Cr.P.C. to prevent such misuse. Consequently, the court allowed the petition, quashing the criminal proceedings initiated against the petitioner based on the FIR and subsequent orders.

In summary, the judgment focused on whether the petitioner's actions constituted an offence of cheating under Section 420 IPC, emphasizing the essential elements of deception and inducement. The court found the lower courts had erred in charging the petitioner without proper consideration of the legal provisions and the nature of the allegations. Ultimately, the court intervened to prevent the misuse of the legal process and quashed the criminal proceedings against the petitioner.