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TMI Blog1987 (11) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation prescribed is six months. Section 472 of the Code provides, however, that in the case of a continuing offence, a fresh period of limitation shall begin to run at every moment of the time during which the offence continues. Section 159 of the Act provides for filing of annual returns by the company and fixes the time by which the annual return is to be filed with the Registrar of Companies. The return is to be in the form prescribed and is to contain various particulars as mentioned in the section. Sub-section (1) of section 220 of the Act provides for filing of the balance-sheet and the profit and loss account with the Registrar of Companies. These documents are to be filed within 30 days from the date on which the balance-sheet and the profit and loss account were laid at the annual general meeting of the company. Where, however, the annual general meeting of a company for any year has not been held, then also copies of the balance-sheet and profit and loss account duly signed as provided are to be filed with the Registrar of Companies within thirty days from the latest day on or before which the annual general meeting should have been held. This latter requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is punishable with fine which may extend to Rs. 5,000 and in the case of a continuing default, with a further fine which may extend to two hundred and fifty rupees for every day after the first during which such default continues. (Underlined portion inserted by Companies (Amendment) Act, 1960). Sub-section (4) of section 234 of the Act provides for punishment in case of default in complying with the provisions of sub-sections (2), (3) or (3A) of the section and the company and the officers concerned shall be punishable with fine which may extend to Rs. 500 and in the case of a continuing default, with an additional fine which may extend to Rs. 50 for every day after the first during which the default continues, and the court at the same time is also empowered on the application of the Registrar to give certain directions to the company. Under section 598 of the Act, if a foreign company fails to comply with the provisions of Part XI of the Act, then the company and every officer or agent of the company in default is liable to be punished with fine which may extend to Rs. 1,000 and in the case of a continuing default, with an additional fine which may extend to Rs. 100 for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments required to be filed under sections 159 and 220 of the Act. There was earlier a view, particularly with reference to section 220 of the Act, that if no annual general meeting had been held, there could be no question of the balance-sheet and the profit and loss account having been laid before a company at its annual general meeting and there could thus be no further question of filing these documents with the Registrar. Section 220 was subsequently amended and the following para from the objects and reasons for the amendment is appropriate: "Persons in charge of the management of some of the companies sometimes omit to convene the annual general meeting of the company and by such omission keep the shareholders as well as the creditors of the company in the dark about the affairs of the company and its financial condition. Further, by such omission, they also evade the necessity of filing the balance-sheet and the profit and loss account with the Registrar of Companies. When a document is filed with the Registrar of Companies, it is open to any shareholder or creditor to inspect such document and to obtain a copy thereof. In the circumstances, it is absolutely essential t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sudarsan Chits ( India ) Ltd. v. Registrar of Companies [1986] 59 Comp Cas 261 , a single judge of the Kerala High Court, however, took the view that failure to file the balance-sheet and profit and loss account of a company under section 220 of the Act was a continuing offence under section 162 of the Act. It was submitted at the Bar that a special leave petition against this judgment of the Kerala High Court was dismissed by the Supreme Court while that against the Division Bench decision of the Calcutta High Court in National Cotton Mills' case [1984] 56 Comp Cas 222 was admitted and was pending decision. Section 276 of the Income-tax Act, 1961, was deleted by the Taxation Laws (Amendment) Act, 1975, and section 276B introduced providing for stringent punishment. Earlier section 276 provided for punishment in case of failure to deliver returns of income or to deduct and pay tax as required. So far as it is relevant for the present case, this section provided that if a person failed without reasonable cause or excuse to deduct and pay tax as required, "he shall be punishable with fine which may extend to ten rupees for every day during which the default continues". Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Nenshi's case, AIR 1973 SC 908, the respondents were owners of a stone quarry and were required to forward certain annual returns in respect of the preceding year, on or before January 21 in each year, and failure to forward the return as required was punishable with fine under section 66 of the Mines Act, 1952. The respondents failed to furnish the returns by the due date and they were prosecuted for an offence under section 66 of the Mines Act, 1952. Section 79 of that Act provided that no court could take cognizance of an offence under that Act unless the complaint was filed within six months of the date of the offence. There was an Explanation to this section which provided that if the offence in question was a continuing offence, the period of limitation would be computed with reference to every point of the time during which the said offence continued. The Supreme Court held that the infringement which occurred on January 21 of the relevant year was complete when the owner failed to furnish annual returns on that date and since the regulation did not lay down that the owner would be guilty of an offence if he continued to work the mine without furnishing the returns, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty is to be calculated at a prescribed rate on monthly basis is indicative of the Legislative intention in unmistakable terms that as long as the assessee does not comply with the requirements of law, he continues to be guilty of the infraction and exposes himself to the penalty provided by law". It further observed that there were several statutory provisions where such default was stipulated to be visited with daily penalty. In that connection, the Supreme Court referred to various decisions of the High Courts in eluding that of the Calcutta High Court in Ajit Kumar Sarkar's case [1979] 49 Comp Cas 909 which, as noted above, was overruled subsequently in National Cotton Mills' case [1984] 56 Comp Cas 222 (Cal). Thus, in my view, the submissions of Mr. Behl and Mr. Gandhi are of no avail. Reference to sections 168, 234, 598, 614A or even sections 614 and 615 of the Act is of no help while interpreting the provisions of sections 159 and 220 read with section 162 of the Act. In Suresh Seth's case [1981] 129 ITR 328, the Supreme Court observed as under (at page 335): "A liability in law ordinarily arises out of an act of commission or an act of omission. When a pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation begins to run at every moment of time during which the breach or the tort, as the case may be, continues). I have already referred to the objects underlying sections 159 and 220 of the Act which require filing of the annual return, balance-sheet and profit and loss account of the company with the Registrar of Companies within a particular period. By these requirements, the company as well as the officers of the company are compelled to make public the information relating to their financial positions. The public can have access to this information on inspection of the records of the Registrar of Companies on payment of requisite fee. Considering, therefore, the objects of the provisions of sections 159 and 220 read with section 162 of the Act and the language used therein, I am of the opinion that the offences of which the petitioners are charged, namely, non-filing of the annual returns and balance-sheet and profit and loss account within the period prescribed, are continuing offences and therefore the period of limitation prescribed by section 468 of the Code cannot have any application. The offences which are alleged against the petitioners will be governed by section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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