2024 (7) TMI 1440 - HC - Income Tax

Maintainability of appeals u/s 377 of Cr.P.C. against the sentence on the ground of its inadequacy - judgment of conviction and order on sentence has been passed by the Special Court for Economic Offences, Bengaluru, Special Court established under Section 280-A of the Income Tax Act, 1961 - HELD THAT - As per the first schedule of Cr.P.C. classification of offence against other laws if offence is punishable for imprisonment for less than 3 years or with fine only, it is classified as non-cognizable, bailable and triable by any Magistrate. As the offences stated in Section 279-A of the I.T. Act, 1961 are non-cognizable within the meaning of Cr.P.C., they are triable by a Magistrate. Offences registered by or against elected representatives are now tried by Special Courts established and it is presided over by a Sessions Judge. That Special Court which is presided over by a Sessions Judge can be said to come under clause (b) - any other Court . The Special Court for economic offences, Bangalore, is presided over by an officer of the rank of Magistrate and does not come under clause (b) - any other Court . The appeal against convictions for offence under Chapter XXII of I.T. Act, 1961 lie to the Sessions Judge u/s 374 of Cr.P.C. Learned counsel for respondent submitted that the respondent accused has challenged the judgment of conviction passed by the Special Court and the said criminal appeal is pending before the Sessions Court. If the appeal has been tried against the judgment of conviction by the Sessions Court and if the appeal is dealt by the High Court against inadequacy of sentence it may lead to passing of conflicting judgments. In case in an appeal against conviction if the Sessions Court reverses the judgment of conviction and acquits the accused and the High Court allows the appeal filed against inadequacy of sentence then the said judgments are conflicting judgments against the same judgment of conviction passed by the Special Court. In order to avoid such conflicting judgments the appeal against conviction and appeal against inadequacy of the sentence are to be dealt with by the same Court. As in the case of Ammannamma and others Vs. State of Karnataka 2005 (1) TMI 755 - KARNATAKA HIGH COURT has held that in cases where appeal against conviction is filed and appeal against enhancement is also filed, the Bench considering the same is required to dispose of the same simultaneously and together and not separately i.e. not in any other manner. Appeal filed against the sentence on the ground of inadequacy u/s 377 of Cr.P.C. the accused may plead for his acquittal or for reduction of sentence as provided under sub-section (3) of Section 377 of Cr.P.C - The right of appeal is provided to the accused to challenge the judgment of conviction and order on sentence under sub-section (3) of Section 374 of Cr.P.C. So also sub-section (3) of Section 377 of Cr.P.C. provides for the accused to plead for his acquittal or for reduction of sentence. The accused who has been convicted need not wait till the State files an appeal under Section 377 of Cr.P.C. to plead for his acquittal or for reduction of sentence. The accused has a statutory right under sub-section (3) of Section 374 of Cr.P.C. to challenge the judgment of conviction and order on sentence passed by the Special Court. If the accused has not challenged the judgment of conviction and order on sentence by filing an appeal under sub-section (3) of Section 374 of Cr.P.C., then in the appeal filed under Section 377 of Cr.P.C. he can plead for his acquittal or reduction of sentence under sub-section (3) of Section 377 of Cr.P.C. The appeals preferred by the Income Tax Department under Section 377 of Cr.P.C. are not maintainable and accordingly all the appeals are dismissed.

Summary

Issues Involved:
1. Jurisdiction of the High Court vs. Sessions Court for appeals against sentences passed by Special Courts for Economic Offences.
2. Interpretation of Section 377 of Cr.P.C. regarding appeals against inadequacy of sentences.
3. Applicability of notifications establishing Special Courts and their jurisdiction.
4. Impact of amendments to Section 377 of Cr.P.C. on appeal procedures.

Detailed Analysis:

1. Jurisdiction of the High Court vs. Sessions Court for Appeals Against Sentences Passed by Special Courts for Economic Offences:

The primary issue revolves around whether appeals against sentences passed by Special Courts for Economic Offences should be heard by the High Court or the Sessions Court. The appellant argued that the Special Court for Economic Offences should be considered as "any other Court" under Section 377(1)(b) of Cr.P.C., thus making the High Court the appropriate forum for appeals. Conversely, the respondents contended that the Special Court, being presided over by a Judicial Magistrate First Class, falls under the category of "Magistrate" as per Section 377(1)(a) of Cr.P.C., making the Sessions Court the correct forum for such appeals.

2. Interpretation of Section 377 of Cr.P.C. Regarding Appeals Against Inadequacy of Sentences:

The court examined the legislative intent behind Section 377 of Cr.P.C., noting that prior to the 2005 amendment, only the High Court had jurisdiction to entertain appeals against sentences on the ground of inadequacy. Post-amendment, the provision allowed for appeals to the Sessions Court if the sentence was passed by a Magistrate, and to the High Court if passed by any other court. The court referenced a coordinate bench decision in R. Raja Rao, which concluded that Special Courts, even if presided over by Magistrates, should be considered "any other court" under Section 377(1)(b). However, the current bench disagreed, emphasizing that Special Courts for Economic Offences, presided over by Judicial Magistrates First Class, do not fall under "any other court" and thus appeals should lie with the Sessions Court.

3. Applicability of Notifications Establishing Special Courts and Their Jurisdiction:

The court reviewed various notifications and orders establishing Special Courts for Economic Offences, including the notification dated 01.09.1982 and subsequent amendments. These notifications designated the Special Court for Economic Offences to be presided over by Judicial Magistrates First Class, with jurisdiction over specific central acts including the Income Tax Act, 1961. The court concluded that these Special Courts, being presided over by Magistrates, should be treated as Magistrate Courts for the purpose of appeals under Section 377 of Cr.P.C.

4. Impact of Amendments to Section 377 of Cr.P.C. on Appeal Procedures:

The court highlighted that the 2005 amendment to Section 377 of Cr.P.C. was intended to streamline the appeal process by allowing appeals against sentences passed by Magistrates to be heard by the Sessions Court. The court emphasized that this amendment was designed to reduce the burden on the High Court and to ensure that appeals are handled more efficiently. The court also noted that the legislative intent was clear in distinguishing between appeals from sentences passed by Magistrates and those passed by other courts.

Conclusion:

The court concluded that the appeals filed by the Income Tax Department under Section 377 of Cr.P.C. were not maintainable before the High Court and should be presented before the jurisdictional Sessions Court. The court dismissed the appeals, granting liberty to the appellant to file the appeals before the Sessions Court within two months, with the time spent before the High Court not affecting the limitation period.

Additional Observations:

The court also considered the provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), which mirrors Section 377 of Cr.P.C., reinforcing that appeals against sentences passed by Magistrates should lie with the Sessions Court. The court emphasized the importance of avoiding conflicting judgments by ensuring that appeals against convictions and appeals against inadequacy of sentences are handled by the same court.