1962 (2) TMI 58 - SC - VAT and Sales Tax

Whether an act is done or intended to be done under a certain law might well be whether the person who committed it can, if challenged, reasonably justify his act under any provision contained in that law? Held that - Appeal allowed. High Court was in error in rejecting the reference. When the appellants submitted their returns they did so under section 10 of the Act and when they produced their accounts they did so under section 15 of the Act. Therefore both the making of the returns and production of the accounts were done under the Act and cannot be said to be outside the provisions of the Act.

Summary

Issues:
Appeal against rejection of reference for prosecution under C.P. & Berar Sales Tax Act for filing false returns and producing incorrect accounts.

Analysis:
The case involved two appeals against the High Court of Madhya Pradesh's order rejecting a reference made by the Sessions Judge regarding the prosecution of the appellants for contravening the C.P. & Berar Sales Tax Act. The appellants, partners in a firm, were accused of submitting false sales tax returns and incorrect accounts, leading to charges under section 24(1)(b) and (g) of the Act. The accused raised an objection under section 26(2) of the Central Act, stating that the prosecution was time-barred. The Sessions Judge referred the matter to the High Court, which rejected the reference, arguing that the accused did not act under the Act when filing false returns. The key legal provisions considered were sections 10, 15, 24, and 26 of the Act.

The crux of the issue was the interpretation of section 26(2) of the Act, which provides limitations for suits and prosecutions. The appellants argued that the phrase "any person" in the section should include them, contrary to the respondent's contention that it was meant to protect only Government servants. The Court held that the words used in sub-section (2) were of wider import and encompassed all persons, without any restriction to Government servants. The absence of limiting language and no rationale for excluding the appellants led to the conclusion that they were covered under "any person" in the provision.

The High Court's rationale for rejecting the reference was based on the belief that the appellants did not act under the Act when submitting false returns or producing incorrect accounts. However, the Supreme Court disagreed, emphasizing that the actions of submitting returns and producing accounts were indeed done under specific sections of the Act, namely sections 10 and 15. Therefore, the Court found the High Court's reasoning flawed and allowed the appeals, setting aside the High Court's order and quashing the proceedings in the trial Court. Ultimately, the Court held in favor of the appellants, concluding that the prosecution was not time-barred, and the proceedings were to be terminated.