N.K. JAIN Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS present case is a classic example as to how public exchequer can be depleted by nefarious methods by the indifference/acquiescence/ connivance of the government officials. The private respondents continued to purloin the public money, by not paying amount of tax due, for years together but no action was taken till such time the matter was agitated and raised in the Parliament by its members. Even thereafter, by taking recourse to the technicalities, as contained in the provisions of the Standard of Weights and Measures Act, 1976 (in short 1976 Act) and the Standard of Weights and Measures (Enforcement) Act, 1985 (in short 1985 Act), the private respondents were let off by giving them a very light punishment. Under the pressure of proceedings pending in this Court, for committing default in payment of tax due, licence to manufacture measuring tapes, of private respondent Nos. 10 and 11, was cancelled. With a view to get it restored, in appeal they deposited part of the amount claimed by the government without reserving any liberty with them, however, now they have started asking for refund of the same by picking holes in the provisions of 1976 Act.

(2.) THIS petition is pending in this Court since from the year 2003. It was allegation of the petitioner that private respondent Nos. 10 and 11, in connivance with the government officials had failed to pay amount of tax, in crores, which was due on account of non -verification and non -stamping of the measurement tapes. It was further alleged that the private respondents have also committed default in payment of Income Tax and also committed default in paying Sales Tax and Excise and Customs Duty as per norms. It was stated by the petitioner that the private respondents have illegally concealed true and exact figure of production of manufacturing tapes which has resulted into evasion of verification fee payable under the 1976 Act. It was further the allegation of the petitioner that without making payment of the tax due, the private respondents had been adding the amount towards tax due in the selling price of the measuring tapes (in short tapes). The amount recovered from the sellers towards tax was never deposited in the exchequer. To say that there is a big difference so far as number of tapes manufactured by the private respondents are concerned, vis -a -vis the number of tapes presented by them for verification and stamping under the 1976 Act reference was made to the balance sheets filed by the priate respondent Nos. 10 and 11 before the Registrar of Companies at Jalandhar (Annexure P4). In this writ petition, fact and figures have been given regarding manufacure of tapes by the private respondents. Details given by them in their returns submitted before Registrar of the Companies at Jalandhar have been noticed. Further details have been given regarding number of tapes presented for verification by the private respondents before the competent authority under the 1976 Act. Still further facts have been given as to how the private respondents had committed default in not paying Sales Tax, Excise and Custom Duty etc. For this judgment, facts averred against respondent No. 11 (M/s FMI Ltd.) will be mentioned.

(3.) IT is also evident from the records that respondent Nos. 10 and 11 are the companies managed by one family. The petitioner, after mentioning detail of the provisions of 1976 and 1985 Act has leveled following allegations against respondent No. 11 : - - 32. M/s FMI Ltd.: That in the year 1997. a few family members of Nayars who were running the business of FREEMANS, the respondent No. 10, floated another company under the name and style of M/s FMI Limited -respondent No. 11, who carried on the same activities of the same business and the style of business also did not change as the previous/parent company i.e. M/s Freemans Measures Ltd. The said company, since it was being managed by the old and elderly persons who had been instrumental in running the business of Freemans, continued indulging in malpractices of concealment of true and exact production, evasion of Verification & Stamping Fees, Income Tax, Sales Tax, Excise and Custom Duty and other Government dues. The petitioner submits a few instances of such misdeeds, acts of omission and commission, and hereby is tendering the following instances and evidence of such illegal activities and acts for the last almost five years since the said company M/s FMI Ltd., came into existence only in the year 1997 :