L & T Limited v. The Assistant Commercial Tax Officer

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 07.08.2009CORAM:THE HONOURABLE MR.JUSTICE C.S.KARNANCrl.O.P.No. 24135 of 2007and M.P.No.1 of 2007L & T Limited,Rep – A.M. Naik,10. Club House Road,Anna Salai,Chennai-2... PetitionerVersusThe Assistant Commercial Tax Officer,Commercial Taxes Department,Karaikal... RespondentsPetition filed under Section 482 Cr.P.C to call for the recordsin C.C.No. 79 of 2007 on the file of Judicial Magistrate No.II,Karaikal and quash the same. For Petitioner : Mr.K.P.Anantha Krishnan For Respondent : Mr.M.R.Thangavelu Govt. Advocate (Pondicherry)ORDERThe petitioner has filed the above Criminal Original Petition tocall for the records in C.C.No. 79 of 2007 on the file of JudicialMagistrate No.II, Karaikal and quash the same. 2. The respondent/complainant/ Prosecution's case was that thecomplainant filed the complaint against the four accused personsunder Section 190(1)(a) of Cr.P.C., 1973, and under Sections 10(a)and 10(e) of the Central Sales Tax Act, 1956 read with Section 34 ofIPC and Sections 409 and 477 of IPC read with Section 34 of IPC. Thecomplainant's allegation is that the officers of the complainant https://hcservices.ecourts.gov.in/hcservices/ department inspected the principal place of business of M/s LakshmiPolythene, Karaikal on 13.09.2003 in exercise of the powers conferredunder Section 45 of the Act of 1967 read with Rule 7 of the CentralSales Tax (Pondicherry) Rules 1967 for the reasons to suspect thatM/s Lakshmi Polythene, Karaikal is attempting to evade payment of taxdue to the complainant department.3. Thiru.G.Govindaraj, Sole Proprietor of M/s LakshmiPolythene, Karaikal gave a statement before the officers of thisdepartment on 13.09.2003 that he had engaged the Accused No.1 as inhis Accountant and authorised the Accused No.1 to represent for andon behalf of his business before the statutory authorities of thecomplainant department. It is the case of Thiru.G.Govindaraj thatthe Accused No.1 while working as an Accountant of his businessinitially gave 10 declaration Form-C bearing dinstinct No.PY/CNo.906001 to 906010 and received back seven leaves of 'C' Formbearing No. 906004 to 906010 for renewal and never received back thedeclaration forms bearing distinct No.PY/C No. 906011 to 906025 fromthe Accused No.1. The statement dated 13.09.2003 given byThiru.G.Govindaraj, the sole proprietor of M/s Lakshmi Polythene,Karaikal is shown as Document No.3. 4. The complainant department after conducting throughinvestigation lodged a complaint before the Honourable Court formisuse of the Form-C bearing distinct No.PY/C 906018 and PY/CNo.906023 and this Honourable Court had taken cognizance of thecomplaint in the case No.STR. 865/2004 and STR.1402/2005respectively. The complainant department has been continuouslyinvestigating the misuse of other declaration forms, which wereissued to M/s Lakshmi Polythene, Karaikal to unearth the revenueloss to the coffer. In the meantime, the Accused No.2 addressed aletter dated nil to the Commercial Tax Officer, Karaikal enclosing aphoto copy of the C form No.PY/C No.906020 requesting to provideanother C Form as he came to know that the declaration Form No.PY/CNo.906020 that he received from Accused No.1 is a defective one. Theletter addressed by Accused No.2 is shown as Document No.4.5. Based on the aforesaid letter received from Accused No.2, atfirst instance the Accused No.2 was examined by the officers of thecomplainant department on 22.08.2006. During the course ofexamination, the Accused No.2 who is a registered dealer made aconfession statement that he had unlawfully received the declarationForm C bearing No.PY/C No.906020 from the Accused No.1 instead oflawfully obtaining such Form C declarations for his business from theregistering authority of Karaikal who is authorised to issue thedeclaration Form C to the registered dealers in Karaikal region. TheOfficers of the complainant department specifically questioned aboutthe business relation of the Accused No.2 with Thiru.G.Govindaraj,Sole Proprietor of M/s Lakshmi Polythene, Karaikal. To this pointedquestion the Accused No.2 replied negatively that he had no business https://hcservices.ecourts.gov.in/hcservices/ relations with Thiru.G.Govindaraj. However the accused No.2 made itclear that while receiving the declaration Form C bearing distinctNo.PY/C No.906020, it had all the office seal of the Office of theCommercial Tax Officer, Karaikal and the seal containing the businessname of Accused No.2. The Accused No.2 further stated that the sealcontaining his business name was not his usual seat, it might havebeen prepared by the Accused No.1. The statement given by theAccused No.2 is shown as Document No.5.6. Based on the information received during the course ofexamination of Accused No.2 on 22.08.2006, the complainant departmentcame to know that the Accused No.2 who received the declaration FormC being distinct No.PY/C No.906020 from the Accused No.1, in turnhanded over the same to Thiru.Anil Kumar, Sales Officer of theAccused No.3 towards purchase of cement to the extent ofRs.10,06,476.89/- 7. The complainant department to further probe in to the matterissued a notice to Larsen & Toubro Limited, to produce thedeclaration form in question by issue of notice/summons. A copy ofthe notice/summons is shown as Document No.6. 8. In response to the notice/summons shown as Document No.6M/s. Larsen & Toubro Limited, informed vide their letter dated07.09.2006 that they have not received the declaration form inquestion. Reply given by M/s.Larsen & Toubro is shown as DocumentNo.7.9. Challenging the complaint, the petitioner/3rd accused hasprayed for quashing of the complaint in C.C. No. 79 of 2007 on thefile of Judicial Magistrate- II, Karaikal on the following grounds.The petitioner most humbly submits that the complainant as againstthis petitioner is not valid in law in as much as this provision oflaw invoked by the respondent is not applicable to the petitioner.The Penal Section reads as follows: Section 10 – Penalties – if any person"(e). has in his possession any form prescribed for the purposeof Sub-Section (4) [or Sub-Section (8)] of Section 8 which has notbeen obtained by him or by his principle or by his agent inaccordance with the provisions of this act or any rules thereunder"."Rule 12(6) - Form C refereed to in Sub-Rule (1) or as the casemay be, Form F referred to Sub-Rule (5), shall be the one obtained bythe purchasing dealer or as the case may be, the transferee in thestate in which the goods covered by such form are delivered."10. The petitioner was a seller and the second accused was thedealer. The relationship is that of one principle to anotherprinciple. Further, it is the duty of the dealer to obtain the CForm. The seller has no role to play in the process. The law doesnot envisage any steps, or measure or cast any duty on the seller, to https://hcservices.ecourts.gov.in/hcservices/ follow while receiving a C Form. It will also be humanly impossiblefor every seller to personally verify if every C Form that hereceives is genuine. The seller having transacted with the dealer,goes on his action and banafide while receiving the C Form. Further,the Section 10(e) of the Central Sales Tax Act deals with theliability of the dealer and has no mention of the seller. Thus, thepetitioner being a seller submits that from the above, it is clearthat the petitioner can not be liable in any manner for the allegedcriminal offence and therefore the complaint is to be quashed on thisground. 11. The petitioner submits that it has been stated in thecomplaint "Accused No.1, in turn handed over the same to Thiru.AnilKumar, Sales Officer of the Accused No.3 towards purchase of cementto the extent of Rs.10,06,476.89/-". In other words the third accusedacquired the form only for the consignment of cement sent by them.They are by law entitled to the C form and exemption thereupon.There is no malafide in their side of the transaction. 12. From the contents of the complaint and the contents of thepetition, and the arguments advanced by the Learned Counsel for thepetitioner and Learned Counsel for the respondent, the Court is ofthe view that the respondent filed the complaint, along with 10documents to establish his case and mentioned 5 witnesses. Further,in the said case, it is alleged that the accused is attempting toevade a huge amount of Tax payable to Government. This can only bedetermined by way of adjudication after hearing both sides and on thebasis of perusal of documents. So, the case cannot be quashed in thepresent stage. Therefore, the Criminal Original Petition No.24135 of2007 is dismissed. Consequently, the connected MiscellaneousPetition is closed. mps/mraSd/-Asst.Registrar/True Copy/Sub.Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To1. The Assistant Commercial Tax Officer,Commercial Taxes Department,Karaikal.2.The Public Prosecutor, High Court, Madras-104.3. The Judicial Magistrate No.II, KaRAIkal4. -DO- Through The Chief Judicial Magistrate, PuducherryCrl.O.P.No. 24135 of 2007and M.P.No.1 of 2007MG(CO)EU 24.8.2009