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2024 (4) TMI 815 - HC - VAT and Sales TaxSeeking grant of anticipatory bail - bailable offence or not - failure to make payment of tax - wilful attempt to evade any tax or payment of any tax - Section 74(2) of the MVAT Act - HELD THAT - Under Section 76 of the MVAT the offences under that Act were bailable. Therefore, question of grant or refusal of anticipatory bail would arise only if Sections 406 and 420 of the I.P.C. are made applicable in the present case. The F.I.R. and the investigation carried out so far reveals that, there was evasion of tax or non payment of tax to the tune of Rs. 1,47,56,486/-; as mentioned earlier. There is no dispute that this amounts to an offence U/s. 74(2) of the MVAT. The main question is, whether in this background, simultaneously, the applicant can be prosecuted for commission of the offence punishable under sections 420 and 406 of the I.P.C. as well, or as to whether there is a bar in conducting investigation and prosecution for the offences under the I.P.C. in this case. Thus, the ratio of the Division Bench Judgment in the case of G.S. Oils Ltd. s 2012 (10) TMI 1274 - BOMBAY HIGH COURT is squarely applicable to the present facts of the case. The said Judgment in G.S. Oils Ltd. s case specifically refers to the I.P.C. offences U/s. 406 and 420, as well as, to Section 74(2) of the MVAT. In this view of the matter, it is not necessary to refer to the ratio in Gagan Sharma s case 2018 (10) TMI 1832 - BOMBAY HIGH COURT which was in respect of a different statute altogether. In this particular case, investigation and the prosecution under both the enactments i.e. the MVAT and the I.P.C. can go on simultaneously. The ingredients of section 74(2) of the MVAT, as well as, Sections 420 and 406 of the I.P.C. are clearly made out. Evasion of the tax is of a huge amount. There is no acceptable justification offered by the applicant. His custodial interrogation is necessary to trace all these transactions. Besides this, the offence is quite grave and serious; considering the amount involved. In this view of the matter, no protection U/s. 438 of the Cr.p.c. can be granted to the applicant. The Application is rejected.
Issues Involved
1. Legality of the FIR under Sections 406 and 420 of the IPC and Section 74(2) of the MVAT. 2. Applicability of IPC provisions alongside MVAT. 3. Justification for anticipatory bail. Summary Legality of the FIR under Sections 406 and 420 of the IPC and Section 74(2) of the MVAT The Applicant sought anticipatory bail in connection with C.R. No. 949 of 2023 registered at Dindoshi Police Station, Mumbai, u/s 406 and 420 of the IPC and u/s 74(2) of the MVAT. The FIR was lodged by the Assistant Sales Tax Commissioner alleging non-payment of tax amounting to Rs. 1,47,56,486/- from 2009 to 2017. The Applicant argued that the FIR was not legal as MVAT is a complete code in itself and does not permit prosecution under the IPC for the same set of facts. The Applicant cited the case of Gagan Harsh Sharma & Anr. Vs. The State of Maharashtra to support this contention. Applicability of IPC provisions alongside MVAT The learned APP opposed the Applicant's submissions, arguing that the proceedings before the NCLT were not bona fide and that the evasion of MVAT involved multiple entities. The APP cited various judgments including State of Uttar Pradesh Versus Aman Mittal and another, and State of Maharashtra and another Versus Sayyed Hassan Sayyed Subhan and others to establish that prosecution under two different enactments can go on simultaneously. The Court referred to Section 26 of the General Clauses Act, which allows prosecution under multiple enactments but prohibits double punishment for the same offence. The Court concluded that the same set of facts could constitute offences under both the MVAT and IPC, and therefore, the FIR under Sections 406 and 420 of the IPC was valid. Justification for anticipatory bail The Court noted that the Applicant's firm had evaded tax payments and had not provided any acceptable justification for the same. The Court emphasized that the investigation revealed a significant amount of tax evasion and that the Applicant's custodial interrogation was necessary to trace all transactions. Given the gravity and seriousness of the offence, the Court decided that no protection u/s 438 of the Cr.p.c. could be granted to the Applicant. Conclusion The Application for anticipatory bail was rejected. The Court held that the investigation and prosecution under both the MVAT and IPC could proceed simultaneously, and the ingredients of Section 74(2) of the MVAT, as well as Sections 420 and 406 of the IPC, were clearly made out.
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