Arising Out Of Ps. Case No.-247 Year-2008 Thana- Government Official Comp.district- Patna v. The Union Of India Through Assistant Commissioner Of Income Tax, Circle-5,Patna

IN THE HIGH COURT OF JUDICATURE AT PATNACRIMINAL MISCELLANEOUS No.42017 of 2019 Arising Out of PS. Case No.-247 Year-2008 Thana- GOVERNMENT OFFICIAL COMP.District- Patna ====================================================== 1.Prabir Kumar Shaw @ Sri. Prabir Kumar Shaw, aged about 67 years, male,Son of Late Madan Mohan Shaw, Resident of Flat No.601 Grand ShereApartment, Exhibition Road, P.S.-Gandhi Maidan, District-Patna-800001.Son of Late Madan Mohan Shaw, Resident of Flat No.601 Grand ShereApartment, Exhibition Road, P.S.-Gandhi Maidan, District-Patna-800001.2.Provat Kumar Shaw @ Sri. Pravat Kumar Shaw, aged about 69 years, male,Son of Late Madan Mohan Shaw, Resident of Flat No.701 Grand ShereApartment, Exhibition Road, P.S.-Gandhi Maidan, District-Patna-800001.Son of Late Madan Mohan Shaw, Resident of Flat No.701 Grand ShereApartment, Exhibition Road, P.S.-Gandhi Maidan, District-Patna-800001. ... ... Petitioner/s Versus The Union of India through Assistant Commissioner of Income Tax, Circle-5,Patna. CORAM: HONOURABLE MR. JUSTICE ASHUTOSH KUMAR ORAL ORDER 205-08-2019 Heard Mr. P.K. Shahi, learned Senior Advocate for the petitioners and Mr. Rishi Raj Sinha, learned StandingCounsel, Income Tax. 2. The petitioners seek quashing of the entire prosecution arising out of Complaint Case No. 247-C of2008 and particularly the order dated 25.07.2008 passed bythe learned Presiding Officer, Special Court, EconomicOffences, Patna, whereby cognizance has been taken againstthem for the offences under Sections 276C, 277 and 278Bof the Income Tax Act, 1961. 3. From the perusal of the complaint, it appearsthat with respect to the Assessment Year 1994-95 (FinancialYear 1993-94), lesser tax liability was shown by thepetitioners and, therefore, a prosecution has been launchedagainst them by the Income Tax Department. 4. It has been submitted on behalf of thepetitioners, without going into the details of the complaint,that the penalty which was imposed upon the petitioners waspaid along with the entire tax liability. It has been submittedthat at the pre-charge stage, the case continued and onlyadjournments were granted on several dates. It has furtherbeen submitted that the provisions of the Income Tax Act,1961 (in short the Act) though provide for criminalprosecution for wrong information or concealment of information with respect to tax liability and the punishmentis on the criminal mental culpability, but no useful purposewould be served in allowing the prosecution to continue atthis stage when the complaint is of the year 2008 withrespect to some anomaly in the disclosure of the petitionersfor the Assessment Year 1994-95 (Financial Year 1993-94)and also when all the tax liabilities fixed on the petitionershave been paid. 5. It has further been submitted on behalf of thepetitioners that the main accused person of this case hasdied and it has not been shown in the complaint petition norat any stage of the prosecution that the petitioners weredirectly responsible for furnishing of such statement whichcould have attracted the Penal provisions under the Act,especially Sections 276C, 277 and 278B. 6. As opposed to the aforesaid contentions, Mr.Rishi Raj Sinha, learned Advocate for the Income Tax, hassubmitted that it matters not if the tax liability and thepenalty have been paid. Offence does not get liquidated bypayment of fine or tax liability. The punishment is to prevent any further false disclosure in the circumstancewhen self-certification is the basis for fixing tax liability. Insuch a situation even the delay in concluding the prosecutionshould not come to the avail of the petitioners and the casebe allowed to be proceeded further. 6. As opposed to the aforesaid contentions, Mr.Rishi Raj Sinha, learned Advocate for the Income Tax, hassubmitted that it matters not if the tax liability and thepenalty have been paid. Offence does not get liquidated bypayment of fine or tax liability. The punishment is to prevent any further false disclosure in the circumstancewhen self-certification is the basis for fixing tax liability. Insuch a situation even the delay in concluding the prosecutionshould not come to the avail of the petitioners and the casebe allowed to be proceeded further. 7. It has further been submitted by Mr. Sinha,learned Advocate, that in a summons case which is tried inaccordance with the provisions contained in Chapter-XX ofthe Code of Criminal Procedure, 1973 (in short the Cr.P.C.),there is no provision for discharge at any early stage andafter the substance of the accusation is stated to the accusedpersons, it is open for them to plead guilty. In that event, aconviction is to be recorded. In case, plea of guilt is nottaken by the accused person, the Magistrate has to proceedto hear the prosecution and take all evidence as may beproduced in support of the prosecution and hear the accusedand take all such evidence as is produced in his defense.The only stage where a Magistrate is required to stop theproceedings midway is at the stage of Section 258 Cr.P.C.where a Magistrate may, for the reasons to be recorded by him, stop the proceedings at any stage without pronouncing any judgment and where such stoppage of proceeding ismade after the evidence of the principal witness has beenrecorded, a judgment of acquittal is required to bepronounced and in which case, the accused persons arerequired to be released, which release has the effect ofdischarge. 8. It has thus been urged on behalf of the IncomeTax Department that if the Magistrate is of the view that theproceedings be stopped, nothing prevents the Magistratefrom passing such an order and it would be open for thepetitioners to approach the Magistrate on such grounds ofdelay in conclusion of the proceeding or of the petitionershaving paid their tax liability along with the penalty to thesatisfaction of the Income Tax Department for stoppage ofproceedings. 9. After hearing the learned counsel for the parties,this Court is of the view that no useful purpose would beserved in allowing this prosecution to be continued anyfurther. Even if the prosecution is taken to be for the purposes of retribution, sufficient penalty has been imposedupon the petitioners, which, on litigation also, has remainedinviolate and the same has been paid. The tax liability alsois stated to have been paid, which statement has not beendisputed by the learned counsel for the Income TaxDepartment. In fact, it has been admitted in the counteraffidavit that a “No Dues Certificate” has been given to thepetitioners by the Department. 10. Without going into the merits of the complaintwith respect to the complaint being silent about the specificrole played by the petitioners and the inference of culpablemental state of the petitioners in their capacity as partnersof the firm, this Court, taking into account the year in whichthe offence was committed and the tax liability having beenpaid along with penalty, deems it appropriate to quash theproceedings and all such orders arising from the complaintand the order of cognizance. 11. This Court, in a number of cases, has definedthe scope and ambit of the powers under Section 482Cr.P.C. A High Court, exercising its power under the 10. Without going into the merits of the complaintwith respect to the complaint being silent about the specificrole played by the petitioners and the inference of culpablemental state of the petitioners in their capacity as partnersof the firm, this Court, taking into account the year in whichthe offence was committed and the tax liability having beenpaid along with penalty, deems it appropriate to quash theproceedings and all such orders arising from the complaintand the order of cognizance. 11. This Court, in a number of cases, has definedthe scope and ambit of the powers under Section 482Cr.P.C. A High Court, exercising its power under the aforesaid section, has an inherent power to act ex debitojustitiae to do real and substantial justice, for theadministration of which alone it exists, or to prevent theabuse of the process of the Court. It has been clarified thatthe inherent powers of the Court under Section 482 Cr.P.C.can be exercised to give an effect to an order under theCr.P.C., to prevent the abuse of the process of the Court andto otherwise secure the ends of justice. No doubt, a cautionhas been laid that such powers are to be exercised sparingly,carefully and with much circumspection, but in a case of thiskind, where the entire liability has been paid to theGovernment and there has not been any loss to the publicexchequer, allowing this case to be continued after elevenyears would only be an abuse of the process of the Court.12. In State of Karnataka Vs. L. Muniswamy &Ors.; (1977) 2 SCC 699, the Supreme Court has observedthat the wholesome powers under Section 482 Cr.P.C.entitles the High Court to quash a proceeding when it comesto the conclusion that allowing the same to continue wouldbe an abuse of the process of Court or that the ends of justice require that the proceeding ought to be quashed.Such inherent powers are necessarily to be exercised whenno useful purpose appears to be served by continuing withsuch prosecution. 13. The offences against the petitioners arepertaining to wrong disclosure with respect to their income.Though criminal prosecution has been provided for in theAct; nonetheless the elements of the offence veer aroundcivil liability/liability attracting penalty of tax. Under suchcircumstance, when the petitioners have been paying incometax on an yearly basis and have not been prosecuted for anyfalse disclosure either earlier to this prosecution orthereafter, it would only be in the nature of harassment tothe petitioners if this case is allowed to be continued. 14. The provision contained in Section 482 Cr.P.C.stands tall amongst all provisions of the Code and non-exercise of the same also, where it is needed, results inmiscarriage of justice. 15. For the reasons aforestated, viz., finding nogood ground for allowing the prosecution to continue, this Praveen-II/- UT Court deems it appropriate to quash the order of cognizance dated 25.07.2008 and all the criminal prosecution arisingout of the same. 16. The petition stands allowed accordingly. (Ashutosh Kumar, J)