JAMNADAS MADHAVJI AND CO Vs. D C SREEDHAR

JUDGEMENT

(1.) THIS is a petition under Section 482 of the Code of Criminal Procedure for quashing the proceedings and issue of process in Criminal Case No.3/S of 1987 on the file of Metropolitan Magistrate, 28th Court, Esplanade, Bombay. Heard the learned Counsel for the petitioners and the learned Assistant Public Prosecutor appearing for the State second respondent. None appeared for the first respondent-complainant.

(2.) THE petitioners along with one more accused were prosecuted by the first respondent for offences under Sections 276-C, 277 and 278B of the Income-Tax Act. THE main allegation is that on 30th April, 1981 the original accused No.5 who is not a party to this petition, was detained by the Customs Department officials at Santacruz Airport and an amount of Rs.22,87,000/- was seized from him. It appears that the original accused No.5 Mr. K.C.Mehta made a statement that this amount belonged to the firm of the first petitioner. Petitioners 2 to 4 are partners of that firm. THEn it appears the Income-tax Department conducted some enquiry. It is also seen that subsequently Mr. Mehta retracted his earlier statement and gave a further statement on 4th May 1981 stating that the disputed amount belongs to another firm viz. M/s. Rohitkumar and Co. On the basis of the enquiry made by the Income-tax Department, the Income-tax Department through the respondent No.1 filed a private complaint in the Court below alleging that the petitioners and accused No.5 have not disclosed this income of Rs.22,87,000/- in their income-tax return for the year 1982-83, that they have attempted to evade tax and thereby committed an offence punishable under Section 276C of the Income-tax Act. This is a gist of the offence alleged against the accused persons.

(3.) IN the present case, the appellate Tribunal has clearly held that the amount in question does not belong to the accused and it cannot be included in the income of the accused persons. The prosecution on the same amount cannot be allowed to continue, otherwise it will be a sheer abuse of process of the Court. Hence in my view, the prosecution of the petitioners cannot be continued. Even accused No.5 was included as an employee of the petitioners. Hence the prosecution of the entire firm, its partners and employee is liable to be quashed in view of the specific finding of the Tribunal mentioned above. However if accused No.5, who is not before this Court, has committed any offence individually on his own, it is always open to the INcome-tax Department to take necessary action according to law.