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TMI Blog1995 (9) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... te of receipt of a copy of this order, if the same has not been disposed of already. Till such time, the further proceedings before the Additional Chief Metropolitan Magistrate's Court in EOCC No. 309 of 1993 shall stand stayed. However, it is open to the said magistrate to proceed further, if the respondents are able to establish that the petitioner's application for dispensing with the pre-deposit of the penalty has been given a disposal. Ordered accordingly. No costs. The relevant facts necessary to appreciate the issue raised before us are that, for the alleged contravention of certain provisions of the Foreign Exchange Regulation Act, 1973, hereinafter referred to as "the Act", the respondent was proceeded against and apart from ordering the confiscation of the seized Indian currency of Rs. 50,000 a penalty of Rs. 5,00,000 (five lakhs) came to be imposed by the Special Director, Enforcement Directorate (Foreign Exchange Regulation) Act, New Delhi, by his order dated August 7, 1990. As per the said order, the penalty imposed should be paid at the office of the Enforcement Directorate by means of a demand draft in favour of the Additional Director, Enforcement Directorate, Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nomalies and ensure uniformity of the principles and norms to be applied in a matter like this. In an unreported decision in Criminal M. P. No. 9087 of 1986, dated October 8, 1990. Arunachalam J. dealt with a petition filed under section 482 of the Code of Criminal Pro-. cedure, seeking to quash the proceedings in C. C. No. 1007 of 1986, on the file of the Additional Metropolitan Magistrate, Madras, in almost similar circumstances. That was a case where, when the appeal was filed before the Appellate Board with a petition for dispensing with the deposit of the penalty imposed, the Board merely granted time within which the amount has to be deposited, but yet the prosecution under section 57 has been launched and that was challenged before the court in the criminal O.P. The learned judge held that at the time when the prosecution was launched it suffered no infirmity and that at any rate it was for the petitioner before the learned judge to urge all the grounds and defend the proceedings. In P. Chidambaram Pittai v. Assistant Director, Directorate of Enforcement, (Criminal M. P. Nos. 6362 and 9176 of 1986, dated July 17, 1990), Arunachalam J. held that it is settled law that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NJ 230, wherein a Division Bench, of this court dealt with a grievance made by an assessee under the Tamil Nadu General Sales Tax Act, 1959, for coercive action taken under section 22 of the Madras Revenue Recovery Act, 1864, to attach and bring certain properties of the assessee to sale for recovering the arrears of tax during the pendency of a revision filed before the Deputy Commissioner of Commercial Taxes, who was not prepared to dispose of the same in spite of a direction to do so by the Sales Tax Appellate Tribunal. The Division Bench held that it was wholly improper for the Deputy Commissioner to decline to hear and dispose of the revision and that it was equally improper for the Department to initiate revenue recovery proceedings in respect of the liability which is the subject-matter of the revision petition. Relying upon the same, it is contended for the first respondent that the delay or lapse in the disposal of the appeal or the petition for dispensing with the pre-deposit of the penalty by passing appropriate orders cannot be a ground for penalising the respondent further and that the Appellate Board being a statutory entity over which the respondent has no control or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of the prosecution. The prosecution in those circumstances cannot be quashed on the ground that it is a premature one. On a careful consideration of the relevant provisions of the Act, we are of the view that the pendency of the reassessment proceedings cannot act as a bar to the institution of the criminal prosecution for offences punishable under section 276C or section 277 of the Act. The institution of the criminal proceedings cannot in the circumstances also amount to an abuse of the process of the court. The High Court was, therefore, right in refusing to quash the prosecution proceeding in the four eases instituted against the petitioner under section 482 of the Code of Criminal Procedure." We have carefully considered the scheme underlying the provisions contained in sections 52, 56 and 57 of the Act in the light of the various decisions placed before us for our consideration. In our view, the ratio of the decision of the Supreme Court in P. Jayappan v. S.K. Perumal, ITO ( First ) [1984] 149 ITR 696 would squarely apply to the case on hand and the decisions of the learned single judge referred to supra are quite in conformity with the principles and ratio laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 52 of the Act against an order of adjudication and the right to seek an order from the appellate authority to dispense with the pre-deposit of the penalty imposed is rendered illusory nor the right of the authorities under section 57 of the Act to launch prosecution against the party who fails to deposit the penalty as per the order of adjudication is affected. For instance, as in the case before us, the respondent who has been indicted by the adjudication officer by imposing a penalty for the alleged violation of the provisions of the Act, has chosen to avail of the remedy of appeal provided under section 52 of the Act and also further invoked the jurisdiction of the Appellate Board under the second proviso to section 52 of the Act to dispense with the pre-deposit of the penalty imposed, and the Appellate Board is obliged to consider the relief claimed and pass orders thereon, apart from the disposal of the appeal itself, either rejecting the prayer of the respondent or granting the same either unconditionally or subject to such conditions as the Appellate Board may deem fit without undue delay. This is a substantial right conferred upon the person condemned of having committ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing only on account of the mode of functioning of the Appellate Board, it becomes necessary for this court to balance fairly, equally and equitably too the rights of a citizen and the right of the Department by adopting a reasonable and harmonious construction of the provisions contained in section 57 of the Act so as to make the provisions contained in the second proviso to section 52 of the Act and section 57 of the Act more purposeful and effective so that substantial justice can be secured to both the parties and smooth and harmonious working of the Act can be ensured. In order to achieve this, we are of the view that it will be necessary to declare that wherever the competent authority is apprised of the position about the filing of an appeal well within the time stipulated under section 52 with a further application invoking the powers of the Appellate Board under the second proviso to section 52 of the Act, it is open to the concerned authorities to consider the question as to whether they should await the orders of the Appellate Board either way on the application made for dispensing with the deposit of the penalty imposed under the order of adjudication and proceed further ..... X X X X Extracts X X X X X X X X Extracts X X X X
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