SHAKTI METAL BOX Vs. UNION OF INDIA

JUDGEMENT

(1.) SHAKTI Metal Box, Sherpur Kalan, Ludhiana petitioner -1 and its partner, Krishan Kumar Tandon, petitioner -2 have moved this criminal miscellaneous petition under section 482 of the Code of Criminal Procedure, 1908 for quashing the Criminal Complaint No. 344/3 of 1985, titled as ITO v. Krishan Kumar Tandon, pending in the Court of the Chief Judicial Magistrate, Ludhiana and the orders dated 7 -3 -1990 and 21 -11 -1990, passed by the said Court. The impugned complaint was instituted under the provisions of sections 276C and 277 of the Income -tax Act, 1961 ('the Act') with respect to the assessment year 1982 -83, financial year 1981 -82, on the allegations that the petitioner -firm had concealed an income of Rs. 3 lakhs while filing the return. The complaint is dated 9 -10 -1985 and it has been filed under the orders of the Commissioner (Central), Ludhiana. The petitioners claim that they have filed a petition before the Income -tax Settlement Commission, New Delhi which had conveyed its order dated 19 -2 -1988 and according to its directions, the proceedings regarding the assessment years 1982 -83, 1983 -84 and 1984 -85 were allowed to be proceeded with.

(2.) THE petitioners plead that after the admission of the application by the Income -tax Settlement Commission, vide its order dated 19 -2 -1988, they had filed an application for dismissal of the complaint which was dismissed by the Chief Judicial Magistrate on 7 -3 -1990, copy Annexure P3. Another application was filed under section 309 of the Code of Criminal Procedure for stay of the proceedings, but the same was dismissed by the learned Chief Judicial Magistrate on 21 -11 -1990, vide order copy Annexure P4. The petitioners seek the quashing of the complaint, as well as the orders passed by the learned CJM.

(3.) THE impugned complaint, in the present case, was instituted at a time when the Settlement Commission had yet not decided, whether the application was to be proceeded with or not. Under section 245D, the Settlement Commission, on receipt of an application under section 245C, has to call for a report from the Commissioner and it is after examination of that report and the material contained therein and having regard to the nature and circumstances of the case, or the complexity of investigation involved therein, that the Commission may by order allow the application to be proceeded with or reject the application. When the complaint, in the present case, was instituted, the Commission had yet not allowed the proceedings on the application to proceed further. In this situation, it cannot be said that the Settlement Commission was seized of the matter when the prosecution was launched under the orders of the Commissioner. There was no bar on the powers of the Commissioner to order the launching of the prosecution on the day the complaint was filed. While allowing the prayer of the petitioners to proceed with the application, the Settlement Commission did not give a direction for stay of the criminal proceedings.