2012 (10) TMI 1274 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of invoking general statute (IPC) when a special statute (VAT Act) exists.
2. Authority of police to investigate offences u/s 77 of the VAT Act.
3. Requirement of assessment completion before FIR registration.
4. Specific allegations against directors for their role in company affairs.

Summary:

1. Validity of Invoking General Statute (IPC) When a Special Statute (VAT Act) Exists:
The petitioners challenged the registration of FIR No. 139/2012 for offences under IPC Sections 406, 409, 420, 465, 471, 468, 120-B, 34, and various sections of the Maharashtra Value Added Tax Act, 2002. They argued that when a special statute exists, the provisions of the general statute (IPC) cannot be invoked. The court referred to the Apex Court's judgment in the case of State of W.B. vs. Narayan K. Patodia, which held that offences under the IPC do not get displaced by the special statute. The court concluded that the offences under IPC Sections 465 and 471 are not covered by the VAT Act, thus justifying the invocation of the IPC.

2. Authority of Police to Investigate Offences u/s 77 of the VAT Act:
The petitioners contended that u/s 77 of the VAT Act, the investigation cannot be entrusted to the police. The court examined Section 77, which allows the Commissioner to authorize any subordinate officer to investigate offences under the Act, and such officers can exercise the powers of a police officer. The court found that there is no prohibition in the VAT Act against police investigation. The court relied on the Apex Court's judgment in State of W.B. vs. Narayan K. Patodia, which allowed police investigation in the absence of a statutory prohibition, and held that the police can investigate offences under both the VAT Act and IPC.

3. Requirement of Assessment Completion Before FIR Registration:
The petitioners argued that an FIR can only be registered after tax assessment is completed. The court found no merit in this argument, stating that neither the VAT Act nor the Cr.P.C. supports such a proposition. The court emphasized that the FIR sets the investigation machinery into motion and does not require prior assessment completion.

4. Specific Allegations Against Directors for Their Role in Company Affairs:
The applicant claimed there were no specific allegations against him regarding his role in the company's day-to-day affairs. The court noted that FIRs are not required to be encyclopedic and only need to initiate the investigation. The court referred to the Apex Court's judgment in Ashabai Machindra Adhagale vs. State of Maharashtra, which stated that the FIR need not contain all details. The court held that the investigation would determine the specific roles and that the applicant could seek discharge if no material is found against him. The court dismissed the application, stating that the investigation cannot be thwarted at the beginning.

Conclusion:
The writ petition and the application were dismissed as both were found to be without merit. The court upheld the validity of invoking IPC provisions alongside the VAT Act, allowed police investigation under the VAT Act, rejected the need for assessment completion before FIR registration, and dismissed the challenge regarding the lack of specific allegations against the director.