SONAL GUM INDUSTRIES Vs. STATE OF GUJARAT

JUDGEMENT

(1.) IN these three petitions with the same parties, provisions of Sec. 482 of the Criminal Procedure Code, 1973 (for short, "the code") are invoked for the relief of quashment of three criminal cases being criminal Case Nos. 261, 262 and 263 of 1988 pending in the Court of learned addl. Chief Metropolitan Magistrate, Ahmedabad against the petitioners for the alleged offences punishable under Sec. 276b read with Sec. 278b of the Income-Tax Act, 1961.

(2.) IT was fairly conceded that cumulative interest payable under Sec. 201 (1 A)for all the years involved in respect of the deductions at source under Secs. 192 to 195 of the Income Tax Act, was less than Rs. 10,000/- and the tax along with interest was already paid to the credit of the Central Government by the petitioners. In such set of facts, the instruction No. 5051 issued on 7-2-1991 by the Central Board of Direct Taxes would squarely apply in the facts of the case, and in compliance thereof, prosecution ought not to have been initiated against the petitioners; but since criminal cases were initiated prior to the aforesaid date of issue of the instruction, the cases had come to be filed. However, the said instruction clearly mentioned that it would apply to the defaults or failure to pay the taxes deducted at source in time committed prior to 1-4-1989.

(3.) LEARNED Counsel, Mr. D. K. Puj submitted that in view of compliance and full payment by the petitioners, there was complete absence of mens rea and prosecution was not likely to serve any purpose since no punishment would be justified in the facts of the case. He relied upon a judgment of the Patna high Court in the matter of Ganga Solvent and Ors. v. State of Bihar, 226 ITR 401 in support of his argument that continuance of prosecution of the petitioners would, in the peculiar facts, be an abuse of the process of Court. He further submitted that the prosecution in the facts of the present case was launched after more than 10 years of the commission of the alleged offence and long after full payments being made by the petitioners. After such payments having been made in the year 1976-1977, notice was issued for the first time in 1987 and the cases were filed in the year 1988 which clearly indicated discrimination and abuse of the process of Court, according to his submission.