2020 (1) TMI 749 - HC - VAT and Sales Tax

Seizure of goods by police - goods seized by the police under the Trade Tax Act for the reason, the applicants are not the importer as per the definition of importer provided under Section 2E of the U.P. Trade Tax Act and contesting the matter before the authorities - HELD THAT - The conjoint reading of Section 28-A and Section 15A(1)(o) clearly provides that in case of contravention of the provisions of Section 28- A of U.P. Trade Tax Act, the person is liable to be penalised under Section 15A(1)(o) - From the perusal of the FIR and the impugned order dated 17.01.2007 passed by the learned trial court clearly establishes that the basis of applying Section 420 of I.P.C. is that the applicants have acted in contravention of Section 28-A of the U.P. Trade Tax Act. The perusal of Section 5 Cr.P.C., which is saving clause and protects the procedure provided under the provisions of U.P. Trade Tax Act for initiation of prosecution against the person who contravenes any of the provisions of U.P. Trade Tax Act - Ordinarily criminal prosecution instituted against an accused person must be tried under the provisions of the Code and the High Court would be reluctant to interfere with the said proceedings at an interlocutory stage. The continuation of the prosecution against the applicants would be illegal and nothing but an abuse of the process of the Court - Application allowed.

Issues:
1. Quashing of charge-sheet, order, and revisional order.
2. Interpretation of U.P. Trade Tax Act provisions.
3. Impact of previous court judgment on criminal proceedings.
4. Application of Section 482 Cr.P.C.
5. Legality of continued prosecution.

Analysis:

1. Quashing of Charge-sheet, Order, and Revisional Order:
The applicants sought to quash the charge-sheet, order, and revisional order in Criminal Case No. 294 of 2004. The charge-sheet dated 26.05.1995 and subsequent orders were challenged based on the premise that the applicants were not liable to face criminal proceedings after a previous judgment absolved them of penalty under the U.P. Trade Tax Act. The applicants argued that no material existed to justify further criminal prosecution, citing Section 5 Cr.P.C. The High Court allowed the application under Section 482, thereby quashing the charge-sheet, order, and ongoing criminal proceedings.

2. Interpretation of U.P. Trade Tax Act Provisions:
The Trade Tax Department initiated proceedings against the applicants under Section 15A(1)(o) of the U.P. Trade Tax Act. The applicants were accused of contravening Section 28-A of the Act, leading to potential penalties under Section 15A(1)(o). The court observed that the applicants' failure to disclose possession of silver and silver ornaments to evade tax liability constituted an offense under Section 420 of the Indian Penal Code (I.P.C.). However, a subsequent judgment absolving the applicants of the penalty under the Trade Tax Act negated the basis for continuing criminal prosecution.

3. Impact of Previous Court Judgment on Criminal Proceedings:
The judgment dated 09.08.2010 in Sales/Trade Tax Revision No.597 of 2002 played a crucial role in the analysis. This judgment absolved the applicants of penalty under Section 15A(1)(o) of the U.P. Trade Tax Act. The High Court emphasized that after this judgment, no grounds remained to prosecute the applicants further, as the allegations against them were negated. The court concluded that no offense of cheating under Section 420 I.P.C. could be established against the applicants post the said judgment.

4. Application of Section 482 Cr.P.C.:
The High Court invoked its inherent power under Section 482 Cr.P.C. to prevent an abuse of the court's process and secure the ends of justice. It analyzed the legal provisions, previous judgments, and the facts of the case to determine that the continuation of criminal proceedings against the applicants would be illegal and tantamount to an abuse of the court's process. The court, therefore, allowed the application under Section 482 and quashed the charge-sheet, order, and ongoing criminal case.

5. Legality of Continued Prosecution:
The court scrutinized the legality of continued prosecution against the applicants in light of the previous court judgment and the provisions of the U.P. Trade Tax Act. It concluded that post the judgment absolving the applicants of penalty, no valid grounds existed to sustain criminal proceedings against them. The court emphasized that the applicants were entitled to the benefit of Section 5 Cr.P.C., which protects the procedure provided under special laws like the U.P. Trade Tax Act. Consequently, the court deemed the prosecution against the applicants as illegal and an abuse of the court's process, leading to the quashing of all relevant legal actions.

In summary, the High Court's judgment in this case centered on the interpretation of the U.P. Trade Tax Act provisions, the impact of a previous court judgment on ongoing criminal proceedings, the application of Section 482 Cr.P.C. to prevent an abuse of court process, and the legality of continued prosecution against the applicants. The detailed analysis and subsequent quashing of the charge-sheet, order, and criminal proceedings underscored the court's commitment to upholding justice and legal principles in the case.

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