ITEM NO.31 Court 6 (Video Conferencing) SECTION II-A<\/p>\n
S U P R E M E C O U R T O F I N D I A
\n RECORD OF PROCEEDINGS<\/p>\n
SPECIAL LEAVE PETITION (CRIMINAL) Diary No(s). 15166\/2020<\/p>\n
(Arising out of impugned final judgment and order dated 05-08-2019
\n in CRLM No. 42017\/2019 passed by the High Court Of Judicature At
\n Patna)<\/p>\n
UNION OF INDIA Petitioner(s)<\/p>\n
VERSUS<\/p>\n
PRABIR KUMAR SHAW & ANR. Respondent(s)
\n (FOR I.R. and IA No.84779\/2020-CONDONATION OF DELAY IN FILING and
\n IA No.84781\/2020-EXEMPTION FROM FILING C\/C OF THE IMPUGNED
\n JUDGMENT)<\/p>\n
Date : 20-11-2020 This petition was called on for hearing today.<\/p>\n
CORAM : HON’BLE MR. JUSTICE ASHOK BHUSHAN
\n HON’BLE MR. JUSTICE R. SUBHASH REDDY
\n HON’BLE MR. JUSTICE M.R. SHAH<\/p>\n
For Petitioner(s) Mr. N. Venkataraman, ASG
\n Ms. Sairica Raju, Adv.
\n Mr. V. Chandrashekhar, Adv.
\n Mr. Manish Pushkarna, Adv.
\n Mrs. Anil Katiyar, AOR
\n For Respondent(s)<\/p>\n
UPON hearing the counsel the Court made the following
\n O R D E R
\nLearned counsel for the petitioner contends that merely because the penalty and tax have been paid, the prosecution under Sections 276C, 277 and 278B of the Income Tax Act could not have been quashed. He further submits that similar issues are already under consideration by this Court in SLP (Crl) D. No. 7377\/2019.<\/p>\n
Issue notice on the special leave petition as well as on the application for condonation of delay. Signature Not Verified Digitally signed by MEENAKSHI KOHLI Date: 2020.11.20 14:55:39 IST Reason: Tag with SLP (Crl) D. No. 7377\/2019.<\/p>\n
(MEENAKSHI KOHLI) (RENU KAPOOR) ASTT. REGISTRAR-cum-PS COURT MASTER <\/p>\n
IN THE HIGH COURT OF JUDICATURE AT PATNA
\nCRIMINAL MISCELLANEOUS No.42017 of 2019
\nArising Out of PS. Case No.-247 Year-2008 Thana- GOVERNMENT OFFICIAL COMP.
\nDistrict- Patna
\n======================================================
\n1. Prabir Kumar Shaw @ Sri. Prabir Kumar Shaw, aged about 67 years, male,
\nSon of Late Madan Mohan Shaw, Resident of Flat No.601 Grand Shere
\nApartment, Exhibition Road, P.S.-Gandhi Maidan, District-Patna-800001.
\n2. Provat Kumar Shaw @ Sri. Pravat Kumar Shaw, aged about 69 years, male,
\nSon of Late Madan Mohan Shaw, Resident of Flat No.701 Grand Shere
\nApartment, Exhibition Road, P.S.-Gandhi Maidan, District-Patna-800001.
\n… … Petitioner\/s
\nVersus
\nThe Union of India through Assistant Commissioner of Income Tax, Circle-5,
\nPatna.
\n… … Opposite Party\/s
\n======================================================
\nAppearance :
\nFor the Petitioner\/s : Mr. P.K. Shahi, Sr. Adv.
\nMr. Satyabir Bharti, Adv.
\nMr. Alok Chandra, Adv.
\nMr. Prince Kumar Mishra, Adv.
\nFor the Opposite Party\/s : Mr. Rishi Raj Sinha, SC
\n======================================================
\nCORAM: HONOURABLE MR. JUSTICE ASHUTOSH KUMAR
\nORAL ORDER
\n2 05-08-2019 Heard Mr. P.K. Shahi, learned Senior Advocate for
\nthe petitioners and Mr. Rishi Raj Sinha, learned Standing
\nCounsel, Income Tax.
\n2. The petitioners seek quashing of the entire
\nPatna High Court CR. MISC. No.42017 of 2019(2) dt.05-08-2019
\n2\/9
\nprosecution arising out of Complaint Case No. 247-C of
\n2008 and particularly the order dated 25.07.2008 passed by
\nthe learned Presiding Officer, Special Court, Economic
\nOffences, Patna, whereby cognizance has been taken against
\nthem for the offences under Sections 276C, 277 and 278B
\nof the Income Tax Act, 1961.
\n3. From the perusal of the complaint, it appears
\nthat with respect to the Assessment Year 1994-95 (Financial
\nYear 1993-94), lesser tax liability was shown by the
\npetitioners and, therefore, a prosecution has been launched
\nagainst them by the Income Tax Department.
\n4. It has been submitted on behalf of the
\npetitioners, without going into the details of the complaint,
\nthat the penalty which was imposed upon the petitioners was
\npaid along with the entire tax liability. It has been submitted
\nthat at the pre-charge stage, the case continued and only
\nadjournments were granted on several dates. It has further
\nbeen submitted that the provisions of the Income Tax Act,
\n1961 (in short the Act) though provide for criminal
\nprosecution for wrong information or concealment of
\nPatna High Court CR. MISC. No.42017 of 2019(2) dt.05-08-2019
\n3\/9
\ninformation with respect to tax liability and the punishment
\nis on the criminal mental culpability, but no useful purpose
\nwould be served in allowing the prosecution to continue at
\nthis stage when the complaint is of the year 2008 with
\nrespect to some anomaly in the disclosure of the petitioners
\nfor the Assessment Year 1994-95 (Financial Year 1993-94)
\nand also when all the tax liabilities fixed on the petitioners
\nhave been paid.
\n5. It has further been submitted on behalf of the
\npetitioners that the main accused person of this case has
\ndied and it has not been shown in the complaint petition nor
\nat any stage of the prosecution that the petitioners were
\ndirectly responsible for furnishing of such statement which
\ncould have attracted the Penal provisions under the Act,
\nespecially Sections 276C, 277 and 278B.
\n6. As opposed to the aforesaid contentions, Mr.
\nRishi Raj Sinha, learned Advocate for the Income Tax, has
\nsubmitted that it matters not if the tax liability and the
\npenalty have been paid. Offence does not get liquidated by
\npayment of fine or tax liability. The punishment is to
\nPatna High Court CR. MISC. No.42017 of 2019(2) dt.05-08-2019
\n4\/9
\nprevent any further false disclosure in the circumstance
\nwhen self-certification is the basis for fixing tax liability. In
\nsuch a situation even the delay in concluding the prosecution
\nshould not come to the avail of the petitioners and the case
\nbe allowed to be proceeded further.
\n7. It has further been submitted by Mr. Sinha,
\nlearned Advocate, that in a summons case which is tried in
\naccordance with the provisions contained in Chapter-XX of
\nthe Code of Criminal Procedure, 1973 (in short the Cr.P.C.),
\nthere is no provision for discharge at any early stage and
\nafter the substance of the accusation is stated to the accused
\npersons, it is open for them to plead guilty. In that event, a
\nconviction is to be recorded. In case, plea of guilt is not
\ntaken by the accused person, the Magistrate has to proceed
\nto hear the prosecution and take all evidence as may be
\nproduced in support of the prosecution and hear the accused
\nand take all such evidence as is produced in his defense.
\nThe only stage where a Magistrate is required to stop the
\nproceedings midway is at the stage of Section 258 Cr.P.C.
\nwhere a Magistrate may, for the reasons to be recorded by
\nPatna High Court CR. MISC. No.42017 of 2019(2) dt.05-08-2019
\n5\/9
\nhim, stop the proceedings at any stage without pronouncing
\nany judgment and where such stoppage of proceeding is
\nmade after the evidence of the principal witness has been
\nrecorded, a judgment of acquittal is required to be
\npronounced and in which case, the accused persons are
\nrequired to be released, which release has the effect of
\ndischarge.
\n8. It has thus been urged on behalf of the Income
\nTax Department that if the Magistrate is of the view that the
\nproceedings be stopped, nothing prevents the Magistrate
\nfrom passing such an order and it would be open for the
\npetitioners to approach the Magistrate on such grounds of
\ndelay in conclusion of the proceeding or of the petitioners
\nhaving paid their tax liability along with the penalty to the
\nsatisfaction of the Income Tax Department for stoppage of
\nproceedings.
\n9. After hearing the learned counsel for the parties,
\nthis Court is of the view that no useful purpose would be
\nserved in allowing this prosecution to be continued any
\nfurther. Even if the prosecution is taken to be for the
\nPatna High Court CR. MISC. No.42017 of 2019(2) dt.05-08-2019
\n6\/9
\npurposes of retribution, sufficient penalty has been imposed
\nupon the petitioners, which, on litigation also, has remained
\ninviolate and the same has been paid. The tax liability also
\nis stated to have been paid, which statement has not been
\ndisputed by the learned counsel for the Income Tax
\nDepartment. In fact, it has been admitted in the counter
\naffidavit that a \u201cNo Dues Certificate\u201d has been given to the
\npetitioners by the Department.
\n10. Without going into the merits of the complaint
\nwith respect to the complaint being silent about the specific
\nrole played by the petitioners and the inference of culpable
\nmental state of the petitioners in their capacity as partners
\nof the firm, this Court, taking into account the year in which
\nthe offence was committed and the tax liability having been
\npaid along with penalty, deems it appropriate to quash the
\nproceedings and all such orders arising from the complaint
\nand the order of cognizance.
\n11. This Court, in a number of cases, has defined
\nthe scope and ambit of the powers under Section 482
\nCr.P.C. A High Court, exercising its power under the
\nPatna High Court CR. MISC. No.42017 of 2019(2) dt.05-08-2019
\n7\/9
\naforesaid section, has an inherent power to act ex debito
\njustitiae to do real and substantial justice, for the
\nadministration of which alone it exists, or to prevent the
\nabuse of the process of the Court. It has been clarified that
\nthe inherent powers of the Court under Section 482 Cr.P.C.
\ncan be exercised to give an effect to an order under the
\nCr.P.C., to prevent the abuse of the process of the Court and
\nto otherwise secure the ends of justice. No doubt, a caution
\nhas been laid that such powers are to be exercised sparingly,
\ncarefully and with much circumspection, but in a case of this
\nkind, where the entire liability has been paid to the
\nGovernment and there has not been any loss to the public
\nexchequer, allowing this case to be continued after eleven
\nyears would only be an abuse of the process of the Court.
\n12. In State of Karnataka Vs. L. Muniswamy &
\nOrs.; (1977) 2 SCC 699, the Supreme Court has observed
\nthat the wholesome powers under Section 482 Cr.P.C.
\nentitles the High Court to quash a proceeding when it comes
\nto the conclusion that allowing the same to continue would
\nbe an abuse of the process of Court or that the ends of
\nPatna High Court CR. MISC. No.42017 of 2019(2) dt.05-08-2019
\n8\/9
\njustice require that the proceeding ought to be quashed.
\nSuch inherent powers are necessarily to be exercised when
\nno useful purpose appears to be served by continuing with
\nsuch prosecution.
\n13. The offences against the petitioners are
\npertaining to wrong disclosure with respect to their income.
\nThough criminal prosecution has been provided for in the
\nAct; nonetheless the elements of the offence veer around
\ncivil liability\/liability attracting penalty of tax. Under such
\ncircumstance, when the petitioners have been paying income
\ntax on an yearly basis and have not been prosecuted for any
\nfalse disclosure either earlier to this prosecution or
\nthereafter, it would only be in the nature of harassment to
\nthe petitioners if this case is allowed to be continued.
\n14. The provision contained in Section 482 Cr.P.C.
\nstands tall amongst all provisions of the Code and nonexercise
\nof the same also, where it is needed, results in
\nmiscarriage of justice.
\n15. For the reasons aforestated, viz., finding no
\ngood ground for allowing the prosecution to continue, this
\nPatna High Court CR. MISC. No.42017 of 2019(2) dt.05-08-2019
\n9\/9
\nCourt deems it appropriate to quash the order of cognizance
\ndated 25.07.2008 and all the criminal prosecution arising
\nout of the same.
\n16. The petition stands allowed accordingly.
\nPraveen-II\/-
\n(Ashutosh Kumar, J)
\nU T<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"This Court, in a number of cases, has defined the scope and ambit of the powers under Section 482 Cr.P.C. A High Court, exercising its power under the aforesaid section, has an inherent power to act ex debito justitiae to do real and substantial justice, for the administration of which alone it exists, or to prevent the abuse of the process of the Court. It has been clarified that the inherent powers of the Court under Section 482 Cr.P.C. can be exercised to give an effect to an order under the Cr.P.C., to prevent the abuse of the process of the Court and to otherwise secure the ends of justice. No doubt, a caution has been laid that such powers are to be exercised sparingly, carefully and with much circumspection, but in a case of this kind, where the entire liability has been paid to the Government and there has not been any loss to the public exchequer, allowing this case to be continued after eleven years would only be an abuse of the process of the Court.<\/p>\n