INDIA BRUSH WORKS P LTD Vs. BIMAN BHATTACHARJEE

JUDGEMENT

(1.) THIS is an application under s. 482 of the Cr.PC filed by India Brush Works (P) Ltd. and two others against Sri Biman Bhattachargee, Asstt. CIT, Companies Circle, for an order quashing the proceeding of the case being No. C557 of 1991 under ss. 276C and 277 of the IT Act, 1961 of the Court of the Chief Metropolitan Magistrate, Calcutta.

(2.) THE case of the petitioners briefly stated as follows : THE O.P. filed a petition of complaint before the Court of Chief Metropolitan Magistrate, Calcutta in 1991 under ss. 276C(i) and 277, r/w s. 278B of the Act, on the allegation that the accused No. 1 (present petitioner No. 1), a company, had submitted tax returns for the accounting year ending 30th June, 1978 (asst. yr. 1979-80) which were found to be false. THE other two petitioners being directors of that company were arraigned as accused Nos. 3 and 4 in the complaint, though neither of them signed the verification. According to the petitioners, this complaint was not legally maintainable in view of the provisions of s. 279(1) of the Act as they stood at that point of time. At the time when the petition of complaint was filed, i.e., 28th March, 1991 the old s. 279(1) had been amended and the designated authorities were changed by the amended Act and prosecution could be lodged only by taking previous sanction granted by such newly designated persons under the amended section. But the said complaint was neither filed after obtaining such prior sanction, nor the prosecution was at the instance of the CIT(A) or the appropriate authority within the meaning of cl. (c) of s. 269UA. THE authorisation as alleged by the complainant in the complaint could not be deemed to be the previous sanction within the meaning of the amended s. 279(1) which had come into force w.e.f. 1st April, 1989. THE further case of the petitioner-accused is that the verification in the return in question was not made by either the petitioner No. 2 or petitioner No. 3 but it was made by another director, named, Sudhir Kumar Dutta (who has been made accused No. 2 in the complaint in question) and unlike partners in a partnership firm the directors of a company are not co-owners and, therefore, these petitioners cannot be held liable for the entries in the return submitted or verified by a different director.

(3.) SO far as the first contention of Mr. Mitra is concerned that the law prevalent at the time of filing of the return in question, i.e., financial year 1978-79 should be applied in respect of the filing of the present complaint, I am constrained to hold that the same is without any substance. The settled principle in this respect is that an amending statute which affects a substantive right is presumed to be prospective unless made retrospective either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such construction is textually impossible, is presumed to be retrospective so that even pending cases are governed by the amended law of procedure. Here, since the matter is procedural only and there is no question of any substantive right of the party being affected, the piece of legislation which was in vogue at the time when the prosecution was being lodged must be the governing law. The contention that the procedural law as prevalent in the year 1978-79 should be applied and accordingly there was no requirement of giving prior sanction for the prosecution and it would suffice if the prosecution was at the instance of the relevant authority has no legs to stand upon. Since the complaint was lodged on 28th March, 1991, the provisions of s. 279(1), as they were on that date, should be applicable to the procedural aspect of the filing of the impugned complaint and, consequently, the sanction of the appropriate authority, i.e., the CIT was required to be obtained prior to the filing of the complaint if the prosecution was not at the instance of the CIT(A) or other appropriate authority.