2020 (8) TMI 275 - HC - Income Tax

Evasion of income tax - Prosecution proceedings for offence under the Income Tax Act - Whether complaint is mandatory before maintaining Charge u/s 193 IPC - No Due Certificate' having already been issued in the year 1995 - petitioner plead that the said 'No Due Certificate' would nullify the case pending before the trial court - submission of the petitioner that the complainant/respondent was aware of the said transaction even in the year 1982, but for reasons best known, no action was taken and the present action in the year 1991 is time barred - HELD THAT - It is to be noted that against the stay on the prohibitory orders passed by the Calcutta High Court, Special Leave Petition was filed before the Hon'ble Supreme Court, leading to the ordering of an enquiry by the Hon'ble Supreme Court. In essence, it is to be noted that the Special Leave Petition has resulted in the enquiry and the findings in the enquiry has ended in the filing of the case before the trial court. Therefore, pleading that there is no complaint as mandated u/s 195 Cr.P.C., for making out an offence u/s 193 IPC is wholly unsustainable, as the enquiry is the outcome of the judicial proceedings culminating in the filing of the case. The enquiry report, by itself, is a complaint and, therefore, it cannot be stated that there is no complaint on the basis of which the case has been filed. This Court, by no means is implying that the stand of the petitioner that a complaint is mandatory for maintaining a charge u/s 193 IPC and, in the present case, this Court is not inclined to go into the said issue, as this Court has already held supra that the enquiry on the basis of the direction of the Hon'ble Supreme Court has led to the filing of the enquiry report leading to the filing of the present case before the trial court. Prosecution being time barred - Sequence of events only reveal that it was a continuous process for which the petitioner also was one of the instruments and, therefore, by no means, could it be stated that the prosecution was time barred, as the judicial proceedings, which was initially at the behest of the petitioner had consumed the time leading to the filing of the case in the year 1991. Therefore, it cannot be held that the prosecution is time barred, as contended by the learned counsel for the petitioner. 'No Due Certificate' issued by the respondent - When a matter is sub judice, it is not only administratively, but also judicially wrong on the part of the department to issue the 'No Due Certificate' and such certificate cannot have any sanctity in the eye of law, that too, as pointed out above, when a complaint is pending against the petitioner. The case has been taken cognizance of by the trial court and unless it reaches it logical conclusion or a petition is filed by the prosecution to withdraw the case, mere issuance of a 'No Due Certificate' would not be suffice to hold that the case against the petitioner is unsustainable or that the petitioner has paid the dues that are due to the respondent. It is for the respondent to place before the Court that the petitioner has paid the dues to the respondent and even then, in the nature of charges framed against the petitioner, it is for the trial court to accept or reject such submissions on behalf of the respondent. Only on the trial reaching its logical conclusion, would the petitioner either absolve himself of the charges or face the consequences of the verdict against him. It is neither open to the department to issue such certificates, which would undermine and defeat the prosecution nor is it open to the petitioner to harp on the said certificate and plead before this Court that the said certificate would nullify all the charges framed against the accused. Therefore, the above contention advanced on behalf of the petitioner deserves to be rejected. Detailed enquiry conducted at the instance of the orders of the Hon'ble Supreme Court has brought to light various irregularities committed by the petitioners, which requires to be put to trial to find out the culpability of the petitioners and other connected with the said offence and, therefore, putting a stop at this point of time would not only be against the prosecution, but also in defiance of the orders of the Hon'ble Supreme Court, as the Hon'ble Supreme Court, even on the basis of the limited materials placed before it had directed the enquiry and subsequent to the enquiry, many materials having come to light, the same have to be tested at the time of trial and, therefore, it would be wholly unsafe to preclude the prosecution from going on with the trial. A holistic appreciation of the materials available on record categorically reveals that the issues, that are before the trial court, are triable issues, which cannot be quashed at the present stage and it has to be taken to its logical end and, therefore, the present petition for quashment of the case at the instance of the petitioner, does not inspire the confidence of this Court and, according, the same deserves to be rejected. Present criminal original petition, being devoid of merits is liable to be dismissed.

Summary

Issues:
Quashment of case on file of Addl. Chief Metropolitan Magistrate, charges under Section 193 IPC without a complaint, prosecution being time-barred, sustainability of case post issuance of 'No Due Certificate'.

Analysis:
1. The petitioner filed a petition seeking to quash the case on the file of the Addl. Chief Metropolitan Magistrate, challenging the initiation of action under the Income Tax Act due to alleged malpractices. The petitioner argued that the charges under Section 193 IPC were unsustainable without a complaint as mandated by Section 195 Cr.P.C.

2. The Special Public Prosecutor contended that the enquiry ordered by the Supreme Court revealed malpractices and evasion of tax, justifying the prosecution. The prosecutor argued that the 'No Due Certificate' issued in 1995 did not nullify the case and that all issues raised were triable, warranting continuation of the trial.

3. The court noted that the enquiry resulting from the Supreme Court's direction led to the filing of the case, thus rejecting the petitioner's argument regarding the absence of a complaint for charges under Section 193 IPC. The court emphasized that the judicial proceedings culminated in the case being filed, making the enquiry report tantamount to a complaint.

4. Regarding the contention of the prosecution being time-barred, the court observed a continuous process starting from a search in 1982 to the filing of the case in 1991, indicating an ongoing legal process that precluded the argument of the prosecution being time-barred.

5. The court addressed the 'No Due Certificate' issued in 1995, emphasizing that the case had been sub judice since 1991, rendering the certificate irrelevant while the trial was ongoing. The court highlighted that the certificate did not absolve the petitioner of the charges and that its issuance did not undermine the prosecution's case.

6. The court concluded that the issues raised were triable and could not be quashed at that stage. The court dismissed the petition for quashment, stating that the case should proceed to its logical end, as stopping the prosecution at that point would be against the judicial process and the orders of the Supreme Court.