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TMI Blog2023 (10) TMI 1102X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed twin test when applied to the present case, this Court finds that the case of the petitioners is fully covered by the ratio of law laid down in Radheyshyam Kejriwal's case and thus merits acceptance. Keeping in view the fact that the Tribunal has already quashed the penalty against the Firm and has found that there was no case of tax evasion as being alleged by the Revenue, this Court finds that the FIR on the same set of allegations cannot be allowed to continue. Petition allowed. - HON'BLE MR. JUSTICE PANKAJ JAIN Present : For the Petitioners : Mr. Jaiveer Singh, Advocate. For the Respondent: Mr. Amit Shukla, Asstt. Advocate General, Punjab. PANKAJ JAIN, J. Petitioners are before this Court seeking quashing of FIR No. 132 dated 26th of March, 2011 registered for the offences punishable under Sections 420, 465, 468, 471 and 120-B of the Indian Penal Code, at Police Station Sadar Patiala, District Patiala and charge sheet/order framing charge dated 4th of May, 2019 (Annexures P-3 and P-4) as well as order dated 16th of November, 2019 (Annexure P-7) passed by the Revisional Court dismissing the revision preferred by the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st Verna Car driver Parveen Kumar, owner of DP Goel, Goel Automobiles, Manager Bhupinder Singh, Varinder Kumar Mechanic, Amrik Sigh salesman and other persons involved in it for causing huge loss to State exchequers by preparing fake papers. After registration of FIR investigation is required to be conducted. 3. After investigation report under Section 173 Cr.P.C. was filed and the petitioners have been charged for offences punishable under Sections 420, 465, 467, 468, 471 r/w Section 120-B IPC. The application filed by the petitioners seeking discharge stands dismissed vide order dated 4th of May, 2019 passed by ACJM, Patiala. The petitioners preferred revision before this Court. CRR No.1752 of 2019 preferred by the petitioners was withdrawn with liberty to avail alternate remedies in accordance with law before the Court of Sessions. The liberty as prayed for was granted vide order dated 25th of July, 2019. Revision preferred by the petitioners also stands dismissed vide order dated 16th of November, 2019 passed by Sessions Judge, Patiala. 4. Counsel for the petitioners has relied upon the order dated 29th of August, 2016 passed by Value Added Tax Tribunal, Punjab, Chandi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was apprehended. Thereafter, second statement was recorded. It has not been explained as to what prompted C.L.Sharma, Excise and Taxation Officer to record the second statement. Actually, he did not record the alleged two statements on the same day as the first statement is bearing signature of Parveen Kumar at the end of the statement whereas, the second statement bears the signatures of the Parveen Kumar on both the pages. The statement of Parveen Kumar recorded under the pressure of the team consisting of the checking officer during the dread of night can not said to be a statement made by him of his very will and consent. The cover note which is alleged to have been recovered from him does not pertain to the vehicle in question and is not in the name of the appellant, but it is in the name of Varinder Singh therefore, it can't be observed on the basis of the said cover note that the vehicle was not covered by the proper and genuine documents. The challan No. 342, dated 21.3.2011 even if issued in advance in name of the owner himself, is not in any way termed to be a good document for establishing the intention of appellant to evade tax. Since the vehicle was not appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al prosecution cannot be allowed to continue after adjudicatory Tribunal found that no case of evasion is made out. 7. Reply by way of affidavit of Gurdev Singh Dhaliwal, P.P.S., Deputy Superintendent of Police (Rural), Patiala has been filed on behalf of the respondent wherein the allegations levelled in the FIR have been reiterated. It has been claimed that the accused persons played fraud upon State Government and evaded to pay tax on the new cars causing loss to the State Exchequer and thus are required to be prosecuted. 8. Ld. State Counsel has argued on the lines of the written statement claiming that the penalty was imposed by the Excise Department against the Firm for evading payment of tax due on the new vehicles whereas the petitioners have been booked for playing fraud upon the State Government and both the issues though based upon the same set of allegations are different and the same cannot be held to have bearing on each other. 9. I have heard counsel for the parties and have carefully gone through records of the case. 10. The question that would arise before this Court is 'whether in the given circumstances when the Adjudicating Authorities have found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chand and others v. Income Tax Officer, Central Circle, Amritsar, (1982)2 SCC 543 in which registration of firm was cancelled on the ground that it was not genuine and prosecution initiated for filing false return. However, in appeal, the Income Tax Appellate Tribunal reversed the finding and held the firm to be genuine. Relying on that, this court quashed the prosecution inter alia observing as follows : 1. Heard counsel, special leave granted In view of the finding recorded by the Income Tax Appellate Tribunal that it was clear on the appraisal of the entire material on the record and Shrimati Janak Rani was a partner of the assessee firm and that the firm was a genuine firm, we do not see how the assessee can be prosecuted for filing false returns. We, accordingly, allow this appeal and quash the prosecution. 2. There will be no order as to costs. In the case of G.L. Didwania and Another v. Income Tax Officer and Another 1995 Supp (2) SCC 724 , on setting aside the order of the assessing authority which led to the prosecution of the assessee by the Income-Tax Appellate Tribunal, this Court held the prosecution not permissible and while doing so observed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d principle shall apply with equal force in the prosecution under the Act as the basic principle which these judgments take note of to quash the prosecution is the higher standard of proof required in a criminal case than the adjudication proceeding and no reference at all has been made to the provisions of the Income-tax Act to come to that conclusion. The decisions referred to above pertain to prosecution under the Income-tax Act and obviously had not adverted to any of the provisions of the Act, particularly Sections 50, 51 and 56 of the Act points out Mr. P.P. Malhotra, the Additional Solicitor General and therefore these decisions in his submission shall have no bearing on the facts of the present case. 19. We find substance in the submission of Mr. Sharan. There may appear to be some conflict between the views in the case of Standard Charted Bank (supra) and L.R. Melwani (supra) holding that adjudication proceeding and criminal proceeding are two independent proceedings and both can go on simultaneously and finding in the adjudication proceeding is not binding on the criminal proceeding and the judgments of this Court in the case of Uttam Chand (supra), G.L. Didwania (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the occasion to consider this question in a case under the Foreign Exchange Regulation Act in Criminal Application No. 1070 of 1999 (Hemendra M. Kothari v. Shri W.S. Vaigankar, Assistant Director, Enforcement Directorate (FERA), Govt. of India and State of Maharashtra), decided on 25.04.2007 and on a review of large number of decisions of this Court and other courts it came to the following conclusion :- 21. It may be noted that in the present case the applicant was exonerated by the Dy. Director of Enforcement, who was adjudicating authority, in the adjudication proceedings. Admittedly that order was not challenged in appeal by the respondent and thus that order has become final. I have already noted the facts and findings of the adjudicating authority in detail. The adjudicating authority had clearly come to the conclusion that there was no material to hold the present applicant guilty for contravention of the provisions of FERA and he was completely exonerated. When in the departmental proceedings before the adjudicating authority, the department could not establish the charges, it is difficult to imagine how the department could prove the same charges before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authority has categorically held that the charges against Shri Radheshyam Kejriwal for contravening the provisions of Section 9(1)(f)(i) and Section 8(2) read with Section 64(2) of the Foreign Exchange Regulation Act, 1973 cannot be sustained . In the face of the aforesaid finding by the Enforcement Directorate in adjudication proceeding that there is no contravention of any of the provisions of the Act, it would be unjust and an abuse of the process of the court to permit the Enforcement Directorate to continue with the criminal prosecution. 13. The aforesaid principle was followed by the Apex Court in the case of M/s Videocon Industries Limited (supra) wherein the petitioners challenged their prosecution under the provisions of FERA Act, 1973 on similar grounds of having given clean chit by the Adjudicating Tribunal dislodging the finding of the Adjudicating Authority holding as under : 18. In the ultimate eventuate, the following principles were culled out from the decisions referred to in the judgment. The majority has put it thus:- The ratio which can be culled out from these decisions can broadly be stated as follows: (i) Adjudication proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the larger Bench. 14. The view taken by the Apex Court in Radheyshyam Kejriwal's case (supra) was again reiterated in Ashoo Surendranath Tewari's case (supra). Thus, in view of the ratio of law laid down in Radheyshyam Kejriwal's case (supra) this Court is of the view that the twin test prescribed for determining the effect of the orders passed by Adjudicating Authority/Tribunal on the criminal proceedings is : (i) Whether the allegations in the adjudication proceedings as well as the proceedings for prosecution are identical? and (ii) Whether the exoneration of the person concerned in the adjudication proceedings is on merits ? 15. The afore-prescribed twin test when applied to the present case, this Court finds that the case of the petitioners is fully covered by the ratio of law laid down in Radheyshyam Kejriwal's case (supra) and thus merits acceptance. 16. In view of above and keeping in view the fact that the Tribunal has already quashed the penalty against the Firm and has found that there was no case of tax evasion as being alleged by the Revenue, this Court finds that the FIR on the same set of allegations cannot be allowed to contin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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