STATE OF GUJARAT v. CHIMANLAL GORDHANBHAI — 1977 DIGILAW 102 (GUJ)

A. M. AHMADI, J. ( 1 ) THIS appeal by the State is directed against the order of acquittal passed by the learned Magistrate in Summary Case No. 846/75 of his Court which was based on the complaint ex. 15 lodged by Shri K. M. Pathak Sales Tax Inspector Godhra on 9th January 1975 The allegation in the complaint was that the respondent accused had not maintained true accounts of the value of the goods sold by him as requi ed by sec. 48 of the Bombay Sales Tax Act 1959 hereinafter called the Act and had therefore committed an offence punishable under sec. 63 (1) (i) of the said Act. The complaint was filed after obtaining the requisite sanction under sec. 67 of the Act from the Assistant Commissioner Sales Tax Division IV Baroda to whom the powers were delegated by the Commissioner of Sales Tax Gujarat State under sub sec. (6) of sec. 27 of the Gujarat Sales Tax Act 1969 by virtue of the delegation order dt. 6 September 1974 The brief facts of the case which have not been disputed before me as indeed they cannot be are as under: ( 2 ) THE respondent Chimanlal Gordhanbhai Patel was running a Printery in the name and style of Modern Printery at Godhra District Panchmahals at all material times. In the year 1970 he did certain printing work for Oil and Natural Gas Commission (O. N. G. C.) and Gujarat Electri city Board (G. E B.) upto 5-5-70 and even thereafter. The prosecution has produced certain bills tendered by the respondent to O. N. G. C. and G. E. B at exs. 19 to 26 and two bills exhs. 31 and 26 relate to the period prior to 5-5-70 with which we are concerned in the present appeal. Ex. 21 is a bill dt. 12-4-70 No. 1796 in respect of certain printing work done by the respondent for O. N. G. C. The respondent has received payment in respect of this printing work from O N. G C. but instead of cradling the amount to the account of O. N. G. C. he has credited the same to the account of Malvan High School. Ex. 26 is a bill dt. 12-2-470 No. 1558 for Rs. 3950. Ex. 26 is a bill dt. 12-2-470 No. 1558 for Rs. 3950. 00in respect of 2000 bill books printed as per order received from G. E B. It appears from the note made on this bill that the respon- dent was paid Rs. 2970. 00 for this work done by him for G. E. B. Instead of crediting the amount to the account of G. E. B. the respondent credited this amount to the account of Jambhu Ghodhra High School in the register maintained by him. It is also clear from she evidence of P. W. 3 Laljibhai Chikabhai Sonal that there was no account whatsoever in the account books of the respondent in the name of O. N. G. C. Certain other bills have been produced to show that this was not a stray transaction but the respondent was regularly doing printing work for O. N. G. C. and even though he had done considerable printing work in S. Y. 2026 there was no account in the name of O. N. G. C. in the records or account books maintained by the respondent. It was on this allegation that the respondent came to be prosecuted for the contravention of sec. 48 (1) of the Act which is an offence under sec. 63 (1) (i) of the Act. As stated earlier these facts have not been disputed and therefore it is not necessary for me to marshal the evidence in this behalf. ( 3 ) THE respondent was also prosecuted for the commission of an offence under sec. 75 (1) (i) of the Gujarat Sales Tax Act 1969 in respect of certain work done for O. N. G. C. and G. E. B. for the period subsequent to 5-5-70. That case was registered in the court of the learned trial Magistrate as Summary Case No. 845/75. The facts of that case were that the respondent had in S. Y. 2026 for the period commencing from 6th May 1970 till the end of the year and in S. Y. 2027 and upto the month of Posh of S. Y. 2028 failed to register the sales of the total amount of Rs. 12734. 00 in his account books and had therefore contravened sec. 58 of the Gujarat Sales Tax Act 1969 for which he was liable to be punished under sec. 75 (1) (i) of the said Act. 12734. 00 in his account books and had therefore contravened sec. 58 of the Gujarat Sales Tax Act 1969 for which he was liable to be punished under sec. 75 (1) (i) of the said Act. ( 4 ) IN both these cases the respondent pleaded guilty before the learned Magistrate and accepting the said plea he was sentenced to pay a fine of Rs. 75. 00 in each case. The State feeling aggrieved by this fleabite sentence awarded by the learned Magistrate on a plea of guilty entered by the respondent filed two appeals being Criminal Appeals Nos. 467 and 469 of 1975 in this Court. Both these appeals were heard by T. U. Mehta J. (as he then was) on 9th October 1975 and after taking into consideration the affidavit filed by the respondent explaining the circumstances under which he entered the plea of guilty in both the cases the conviction was set aside and both the cases were remanded for retrial. At the retrial the accused pleaded not guilty and the prosecution tendered evidence against the respondent. The learned Magistrate had disposed of both these cases on the premise that the provisions of sec. 58 and 75 (1) (g) and 75 (1) (i) of the Gujarat Sales Tax Act would apply to both the cases ignoring the difference in language of sec. 48 (1) and sec. 63 (1) (i) of the Act. The learned Magistrate came to the conclusion that the prosecution had failed to prove that the respondent was a dealer liable to pay tax within the meaning of sec. 58 (1) of the Gujarat Act and as he was not served with any notice to maintain complete books of accounts as required by the second part of that sub-section he could not be said to have failed when directed under sec. 58 to keep accounts or records in accordance with the direction or to have knowingly produced false accounts registers or documents or knowingly furnished incorrect information within the meaning of sec. 75 (1) (g) and (i) of the Gujarat Act He also found that the sanction to prosecute the respondent was not validly granted in that there was no application of mind and therefore the complaint was not competent. 75 (1) (g) and (i) of the Gujarat Act He also found that the sanction to prosecute the respondent was not validly granted in that there was no application of mind and therefore the complaint was not competent. He also took the view that the complaint had been filed by an officer other than the one referred to in the sanction order and hence the complaint was not legally tenable. As regards the delegation order on the basis of which the Assistant Commissioner of Sales Tax granted the necessary sanction to prosecute the respondent the learned Magistrate was of the view that the original delegation order signed by Shri B. T. Trivedi the then Commissioner of Sales tax Gujarat State had not been produced and therefore it was not shown that the sanction was granted by an officer competent to grant the same. The learned Magistrate also noticed that the department had levied a penalty in departmental proceedings instituted against the respondent and hence the subsequent prosecution of the respondent was barred by virtue of sec. 75 (3) of the Gujarat Act. In this view of the matter he acquitted the respondent in both the cases which has led to the State coming in appeal to this Court. ( 5 ) I propose to deal with both these appeals which have been filed against the order of acquittal recorded in the two cases against the respondent separately. In the Present appeal I am concerned with the charges levelled against the respondent under sec. 63 (1) (i) of the Act. Sec 48 (1) of the Act provides as under; (1) Every dealer liable to pay tax under this Act and every other dealer who is required so to do by the Commissioner by notice served on him in the prescribed manner shall keep a true account of the value of the goods purchased or sold by him. Sec. 63 (1) (i) next provides as under: (1) whoever (i) fails to keep a true account of the value of goods bought or sold by him as required by sec. 48. shall on conviction be punished with simple imprisonment which may extend to six months or with file not exceeding two thousand rupees or with both. Sec. 63 (1) (i) next provides as under: (1) whoever (i) fails to keep a true account of the value of goods bought or sold by him as required by sec. 48. shall on conviction be punished with simple imprisonment which may extend to six months or with file not exceeding two thousand rupees or with both. It may be mentioned at the outset that it is not the case of the prosecution that the respondent was required to keep a true account of the value of the goods purchased or sold by him by a notice given in the prescribed manner by the Commissioner. Therefore in order to bring home the guilt against the respondent the prosecution most establish that the respondent is a dealer liable to pay has under the Act and had failed to keep a true account of the value of goods sold by him as required by sec. 48 of the Act. The first question which arises for consideration is whether the respondent is a dealer liable to pay tax under the Act within the meaning of sec 48 (1) of the Act. If it is found as a fact that the respondent is a dealer liable to pay tax under the Act then there is no doubt that he has committed an offence punishable under sec. 63 (1) i) of the Act. It is an undisputed fact that the respondent had failed to keep a true account of the value of the goods sold by him inasmuch as he did not credit the amounts recovered from O. N. G. C. and G E. B. in their names and instead made false entries in the account books to the effect that these sales were to certain schools and the amounts in question were received from those schools. As the facts have not been disputed before me there can be no escape from the conclusion that if the respondent is a person liable to pay tax under the Act he has clearly contravented sec. 63 (1)i) of the Act and would therefore be liable to be punished in accordance with that provision. Therefore the first question which I am required to consider is whether the prosecution has established that the respondent is a dealer liable to pay tax under the Act within the meaning of sec. 48 (1) of the Act. 63 (1)i) of the Act and would therefore be liable to be punished in accordance with that provision. Therefore the first question which I am required to consider is whether the prosecution has established that the respondent is a dealer liable to pay tax under the Act within the meaning of sec. 48 (1) of the Act. In order to determine this question it is necessary to refer to the dictionary of the Act contained in sec. 2. Sec. 2 (11) defines a dealer as a person who whether for commission remuneration or otherwise carries on the business of buying or selling goods in the State and goods according to sec. 2 (13) means all kinds of movable property (not being newspapers or actionable claims or stocks shares or securities) and includes all materials articles and commodities. Sale according to sec. 2 means a sale of goods made within the State for cash or deferred payment or other valuable consideration. The next relevant definition is contained in sec. 2 (23) which says that a recognised dealer means a registered dealer who holds a recognition granted under sec. 25 and a registered dealer is defined in sec. 2 (25) as a dealer registered under sec. 22. Sec. 22 (1) provides that no dealer shall while being liable to pay tax under sec. 3 or under subsec. (6) of sec. 19 carry on business as a dealer unless he possesses a valid certificate of registration as provided by the Act. Sub-sec. (6) of sec. 22 next provides that where any business in respect of which a certificate of registration has been issued under this section has been discontinued or neither the turnover of sales nor the turnover of purchases of a registered dealer has during any year exceeded the relevant limit specified in sub-sec. (4) of sec. 3 and the dealer applies in the prescribed manner for cancellation of his registration the prescribed authority shall cancel the registration with effect from such date as it may fix in accordance with the rules. The plain reading of sub-sec. (1) of sec. 22 would indicate that a dealer who is liable to pay tax under sec. 3 shall not carry on business as a dealer unless he possesses a valid certificate of registration as provided by the Act. Admittedly the respondent was a registered dealer at all material times to this prosecution. The plain reading of sub-sec. (1) of sec. 22 would indicate that a dealer who is liable to pay tax under sec. 3 shall not carry on business as a dealer unless he possesses a valid certificate of registration as provided by the Act. Admittedly the respondent was a registered dealer at all material times to this prosecution. That is clear from the evidence of P. W. 2 Kanchanlal M. Pathak who has deposed that the respondent was granted a certificate of registration dt. 8th March 1965 obviously under sec. 22 of the Act. Reference may now be made to the charging section i. e. sec. 3 (1) of the Act with advantage. It provides that every dealer whose turnover either of all sales or of all purchases made during the year commencing on first day of April exceeds the relevant limits specified in sub-sec. (4) shall until such liability ceases under sub-sec. (3) be liable to pay tax under this Act on his turnover of sales and on his turnover of purchases made on or after the appointed day. Sub-sec. (3) of sec. 3 next provides that every dealer who has become liable to pay tax under this Act shall continue to be so liable until his registration is duly cancelled; and upon such cancellation his liability to pay tax other than tax already levied or leviable shall until his turnover of sales or turnover of purchases again first exceeds the relevant limit specified in sub-sec. (4) cease. Sub-sec. (4) of sec. 3 provides as under: (4 ). For the purposes of this section the limits of turnover shall be as follows: (i) xx xx xx xx (ii) Limit of turnover rs. 30,000/- in the case of a dealer to whom neither (a) nor (k) above applies and the value of taxable goods sold or purchased during the year is not less than Rs. 2,500. 00 cl. (a) refers to a dealer who is an importer while cl. (b) refers to a manufacture. The said two clauses have no relevance so far as the present case is concerned and therefore the case of the respondent would be governed by the residuary clause quoted above. Sec. 5 (1) which begins with a non-obstante clause provides for exemption on sales and purchases of certain goods from the liability to pay tax. The said two clauses have no relevance so far as the present case is concerned and therefore the case of the respondent would be governed by the residuary clause quoted above. Sec. 5 (1) which begins with a non-obstante clause provides for exemption on sales and purchases of certain goods from the liability to pay tax. It says that notwithstanding anything in this Act but subject to the conditions or exceptions (if any) set out against each of the goods specified in column 3 of Schedule A no tax shall be payable on the sales or purchases of any goods specified in that Schedule. The relevant entry in Schedule A with which we are concerned is at sr. no. 4 and it refers to books and periodicals including almanacs and panchangs but excluding catalogues all publications which mainly publicise goods and articles for commercial purposes rate cards account books diaries calendars and books not being exercise books containing space exceeding eight pages for writing. The printing work done by the respondent for O. N. G. C. and G. E. B. does not answer the description of entry no. 4 of Schedule AA to the Act. The next relevant provision which may be noticed at this stage is sec. 41 which provides that subject to such conditions as it may impose the State Government may if it is necessary so to do ;r the public interest by notification in the Official Gazette exempt any specified class of sales or purchases from payment of the whole or any part of any tax payable under the provisions of this Act. In exercise of the powers conferred by this section the Government of Bombay issued a notification No. S. T. A. 1059-III-G. I. exempting from payment of tax to the extent specified in column III of the Schedule the classes of sales and purchases specified in column II on the conditions specified against each of the such classes of sales in column IV of the Schedule. The entry at Sr. No. 10 refers to sales of any articles printed on paper card boards paste board or straw board not being goods falling under entry 4 in Schedule A to the Act by a registered dealer who carries on the business of conducting a printing press and who is certified for the purpose by the Commissioner. The entry at Sr. No. 10 refers to sales of any articles printed on paper card boards paste board or straw board not being goods falling under entry 4 in Schedule A to the Act by a registered dealer who carries on the business of conducting a printing press and who is certified for the purpose by the Commissioner. It becomes immediately clear that this entry does not cover the sales of goods falling under entry 4 in Schedule A to the Act for the obvious reason that the sales in respect of those goods have been exempted be sec. 5 (1) of the Act. Therefore by this entry the whole of the tax on sales of articles printed on paper cardboards pasteboard or straw board is exempt provided the conditions set out in column IV are satisfied. One such condition is that the turnover of ail sales of the registered dealer during the previous year or current year does not exceed Rs. 30 0 It is further provided that if during any year the turnover of the registered dealer of all sales exceeds Rs. 30 0 then on and from the date on which the turnover of sales so exceeds the exemption granted under this notification shall cease to have effect and the certificate issued to the registered dealer by the Commissioner shall stand revoked. It is pertinent to note that in this entry reference is to sales and the total turnover of sales only and not sales cum purchases. These are the relevant provisions to which my attention was invited to point out that the respondent who was admittedly a registered dealer on the relevant date was a person liable to pay tax within the meaning of sec. 48 (1) of the Act. As pointed out earlier sub-sec. (1) of sec. 22 makes it clear that a dealer who is liable to pay tax under sec. 3 shall not carry on business as a dealer unless he possesses a valid certificate of registration as provided by the Act. This section therefore indicates that a person who is a registered dealer would be one who is liable to pay tax under sec. 3 of the Act for otherwise he need not obtain a certificate of registration under the Act. This section therefore indicates that a person who is a registered dealer would be one who is liable to pay tax under sec. 3 of the Act for otherwise he need not obtain a certificate of registration under the Act. It is also an admitted fact that in respect of the irregularities in accounting the respondent was penalised under sub- sec. 3a of sec. 36 of the Act. That sub-section provides that where a dealer his failed to pay the whole of the amount of tax as required by sub-sec. (2) of sec. 38 or the whole of the extra amount of tax as required by sub-sec. (3) of that section or where in the case of a dealer the amount of tax assessed or reassessed for any period under sec. 33 or sec 35 exceeds the sum already paid by a dealer in respect of such period prior to such assessment or reassessment by more than twenty percent of the sum so paid the dealer shall be deemed to have failed to pay the tax to the extent of the difference between the amount payable as aforesaid and the amount paid and the dealer shall pay by way of penalty on the amount of difference a sum calculated in accordance with the provisions of sub-sec. (3 ). It becomes immediately clear on a reading of this subsection that the respondent could not have been penalised unless he was a person liable to pay tax. I was told at the bar that the proceeding under sub-sec. (3a) of sec. 36 of the Act was carried right upto the Tribunal level and the order of the department imposing penalty has been confirmed. Be that as it may the fact that the respondent was penalised under sub- sec. (3a) of sec. 36 of the Act is not in dispute because one of the contentions which was canvassed successfully before the learned Magistrate was that he having been penalised under the said provision could not be prosecuted as the prosecution on the same facts on which the penalty was imposed is barred by the Act. That is a contention to which I will advert later but it is sufficient at this stage to point out that the respondent was visited with a penalty under sub-sec. (3a) of sec. That is a contention to which I will advert later but it is sufficient at this stage to point out that the respondent was visited with a penalty under sub-sec. (3a) of sec. 36 of the Act as he had failed to disclose the sales to O. N. G. C. and G. E B. during the relevant period by not maintaining proper accounts. At this stage i may also be mentioned that under sub-sec. (2) of see. 36 if it comes to the notice of the Commissioner while assessing the amount of tax due from a dealer under sec. 33 that the said dealer has wilfully failed to apply for registration as required by sec. 22 of the Act he may after giving the dealer on opportunity of being heard by order in writing impose upon the dealer by way of penalty in addition to any tax assessed under sec. 33 a sum not exceeding IX times the amount of tax. It will also become clear from this provision that registration under sec. 22 of the Act is compulsory for a person; who is liable to pay tax under the ACt and failure to apply for registration may entail a penalty as provided in sec 36 (2) of the Act. It is also an offence to carry on business as dealer without being registered under cl. (a) of sub-sec. (1) of sec. 6 of the Act. The scheme of the Act as disclosed by this group of sections clearly indicates that the accused a registered dealer is a person who is liable to pay tax. The facts of the present case as discussed earlier also indicate that the respondent was a person liable to pay tax and it was for that reason that he was visited with a penalty under sub-sec. (3a) of sec. 36 of the Act. Therefore on a consideration of the relevant provisions of the Act I think it is fairly clear that the respondent was a dealer liable to pay tax under the Act within the meaning of sec. 48 (1) of the Act. The well established facts indicate that he bad failed to keep true accounts of the value of the goods sold and was therefore liable to be punished under sec. 63 (1) (i) of the Act. ( 6 ) I will now consider the submissions made by Mr. 48 (1) of the Act. The well established facts indicate that he bad failed to keep true accounts of the value of the goods sold and was therefore liable to be punished under sec. 63 (1) (i) of the Act. ( 6 ) I will now consider the submissions made by Mr. Divecha the learned advocate for the respondent in support of this view taken by the learned Magistrate. It would be convenient to first dispose of the submission based on sub-sec. (5) of sec. 36 of the Act. This sub-section reads as under:no prosecution for an offence under this Act shall be instituted in respect of the same facts on which a penalty has been imposed under this section. At this stage it would also be convenient to read sub-sec (3) of sec. 63 which provides that no prosecution for an offence against this Act shall be instituted in respect of the same facts on which a penalty has been imposed by the Commissioner under any provisions of this Act. Both these sections cover the same field and bar a prosecution in respect of the same facts on which a penalty has been imposed under the provisions of the Act. It is important to notice that the law bars a prosecution which is based on the same facts on which a penalty has been imposed under the provisions of the Act. Sec. 36 empowers the Commissioner to impose penalty in certain classes of cases and in the instant case it is an admitted fact that the respondent was visited with a penalty under sub-sec. (3a) of section 36 of the Act. If the present prosecution is therefore in respect of the same facts for which the respondent was visited with a penalty under sub-sec. (3a) of sec. 36 the prosecution would obviously be barred both by virtue of sub-sec. (5) of sec. 36 and sub-sec. (3) of sec. 63 of the Act. It is therefore necessary to determine whether the respondent was visited with a penalty for the same facts for which he is now prosecuted under sec. 63 (1) (i) of the Act. Let us therefore. determine what is the nature of the present prosecution See. 63 (1) (i) provides for a penalty for failure to keep a true account of the value of goods bought or sold by a dealer as required by sec. 48. Sub-sec. 63 (1) (i) of the Act. Let us therefore. determine what is the nature of the present prosecution See. 63 (1) (i) provides for a penalty for failure to keep a true account of the value of goods bought or sold by a dealer as required by sec. 48. Sub-sec. (1) of sec. 48 enjoins upon every dealer liable to pay tax under the Act to keep a true account of the value of the goods purchased or sold by him. The prosecution therefore is clearly based on the failure of the respondent to maintain a true account of the value of the goods sold by him during the relevant period. The question then is does sub- sec. (3a) of sec 36 empower the Commissioner to impose a penalty on a dealer who fails to maintain true accounts of the value of goods sold and purchased by him? In order to answer this question it is necessary not only to refer to sub-sec. (3a) of sec. 36 but also to sec. 37 of the Act. Now sub-sec (3a) of sec. 36 under which the respondent came to be penalised empowers the Commissioner to levy a penalty on a dealer who has failed to pay the tax. Cl. (b) of sub-sec. (1) of sec. 37 on the other hand provides that if any person being a dealer liable to pay tax under this Act or being a dealer who was required to do so by the Commissioner by a notice served on him fails in contravention of sub- sec. (1) of sec. 48 to keep a true account of the value of the goods purchased or sold by him or fails when directed - so to do under that section to keep any accounts or record in accordance with the direction he shall be liable to pay in addition to any tax for which he may be liable a penalty of an amount not exceeding Rs. 2000. 00 (two thousand) or double the amount of tax which would have been payable had there been no such contravention whichever is less. It becomes immediately clear on a plain reading of this provision that if the respondent had been visited with a penalty under cl. (b) of sub- sec. (1) of sec. 2000. 00 (two thousand) or double the amount of tax which would have been payable had there been no such contravention whichever is less. It becomes immediately clear on a plain reading of this provision that if the respondent had been visited with a penalty under cl. (b) of sub- sec. (1) of sec. 37 for failure to keep a true account of the value of the goods purchased or sold by him during the relevant period the prosecution would have been barred by sub-sec. (3) of sec. 63 of the Act. In that instant case therefore the penalty having not been levied under sec. 37 (1) (b) of the Act it cannot be said that the prosecution under sec. 63 (1) (i) of the Act is in respect of the same facts for which the respondent came to be penalised. The penalty under sub-sec. (3a) of sec. 36 is quite distinct from the penalty that may be imposed under cl. (b) of sub-sec. (1) of sec. 37. This clause in terms empowers the Commiss- ioner to impose a penalty for failure to maintain true accounts of the value of goods purchased or sold by the dealer which is also made an offence under sec. 63 (1) (i) of the Act. The rule of double jeopardy would apply only if the prosecution is in respect of the same facts and not otherwise. In the instant case the penalty was not levied for the failure to maintain accounts as required by sub-sec. (1) of sec. 48 of the Act and therefore the bar of sub-sec. (3) of sec. 63 cannot be invoked. The first contention of Mr. Divecha must therefore fail. . . . . . . . . . . . . . . . . . . [ His Lordship after considering the evidence rejected other contentions of the accused. His Lordship further observed: ] ( 7 ) THE last contention which was raised before me by Mr. Divecha raises art interesting point regarding the interpretation of sec 468 and 473 of the Code of Criminal Procedure 1973 Sec. 63 (1) (i) provides that who ever fails to keep a true account of the value of goods bought or sold by him as required by sec. Divecha raises art interesting point regarding the interpretation of sec 468 and 473 of the Code of Criminal Procedure 1973 Sec. 63 (1) (i) provides that who ever fails to keep a true account of the value of goods bought or sold by him as required by sec. 48 shall on conviction be punished with simple imprisonment which may extend to six months or with fine not exceeding two thousand rupees or with both. Sub-sec. (1) of sec. 468 of the Criminal Procedure Code 1973 creates a oar to the taking of cognizance of offences of the category specified in sub-sec. (2) after the expiry of the period of limitation. Sub-sec. (2) provides as under: (2) The period of limitation shall be: (A) six months if the offence is punishable with fine only; (B) one year if the offence is punishable with imprisonment for a term not exceeding one year; (C) three years if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years. Mr. Divecha submitted that in the instant case the offence under sec. 63 (1) (i) of the Act is punishable with simple imprisonment which may extend to six months or with fine not exceeding two thousand rupees or with both and therefore the period of limitation would be one year from the date of the offence. Cl. (b) of sub-sec. (1) of sec. 469 however provides that where the commission of the offence was not known to the person aggrieved by the offence or to any police officer limitation will start from the first day on which such offence comes to the knowledge of such person or to any police officer whichever is earlier. According to sub-sec. (1) of sec. 470 in computing the period of limitation the time during which any person has been prosecuting with due diligence another prosecution whether in a court of first instance or in a court of appeal or revision against the offender shall be excluded. Sub-sec. (3) of sec. According to sub-sec. (1) of sec. 470 in computing the period of limitation the time during which any person has been prosecuting with due diligence another prosecution whether in a court of first instance or in a court of appeal or revision against the offender shall be excluded. Sub-sec. (3) of sec. 470 next provides that where notice of prosecution for an offence has been given or where under any law for the time being in force the previous consent or sanction of the Government or any other authority is required for the institution of any prosecution for an offence then in computing the period of limitation the period of such notice or as the case may be the time required for obtaining such consent or sanction shall be excluded. We next come to sec. 473 on which considerable reliance was placed by Mr. Patel the learned Public Prosecutor. It reads as under:notwithstanding anything contained in the foregoing provisions of this Chapter any court may take cognizance of an offence after the expiry of the period of limitation if it is satisfied on the facts and in the circumstances of the case that the delay has been properly explained or that it is necessary so to do in the interests of justice. ( 8 ) IN order to appreciate the contention of Mr. Divecha that the prosecution is barred by limitation by virtue of sec. 468 of the Code it is necessary to bear in mind certain relevant dates. The account books of the respondent were seized by the sales tax department firstly on 12th January 1971 and again on 6th December 1971 The sanction to prosecute the accused was obtained en 1st January 1975 It is not clear from the record as to when the sanctioning authority was approached for sanction to prosecute the accused under sec. 63 (1) (i) of the Act. The complaint was filed soon thereafter by the Sales tax Inspector Mr. Pathak on 9 January 1975. The Code of Criminal Procedure 1973 received the assent of the President on 25th January 1974 and was given effect from 1 April 1974 Under sub sec. (3) of sec. 470 the prosecution would be entitled to the exclusion of the time taken by the department in securing the sanction to prosecute the respondent for the offence under sec. 63 (1) (i) of the Act. (3) of sec. 470 the prosecution would be entitled to the exclusion of the time taken by the department in securing the sanction to prosecute the respondent for the offence under sec. 63 (1) (i) of the Act. As stated earlier we do not know what time was taken by the department for obtaining the sanction but Mr. Patel the learned P. P. submitted that reasonable time can be excluded and in his opinion 2 months would be the reasonable time during which the application for sanction must have been made and the sanction order ex. 16 issued. The prosecution would be clearly barred by limitation even if the period is calculated from the date the Code came into operation as was submitted by Mr. Patel though such is not the tenor of sec. 469 of the Code. According to that section the period of limitation in relation to an offender starts to run against the prosecution from the date of the offence or from the date of the knowledge of the offence. The prosecution has not led any evidence to suggest the point of time when the department became aware of the commission of the offence by the respondent. The account books were seized as stated earlier in the year 1971 and yet the sanction to prosecute was obtained as late as 1st January 1975 The prosecution has not led any evidence to explain why it look almost over three years to obtain the sanction to prosecute the respondent. The complaint was indeed filed soon after the sanction order ex. 16 was issued by the Sales Tax Inspector Mr. Pathak. It was therefore submitted by Mr. Divecha that after the Criminal Procedure Code received the assent of the President on 25th January 1974 the department became aware of the fact that a new provision prescribing limitation in respect of certain offences was introduced in the Code and that the same was likely to be given effect soon thereafter. His submission therefore was that even if the period prior to 25 January 1974 is excluded or the delay is considered as having been duly explained the prosecution must explain the delay thereafter in order to bring the case within the ambit of section 473 of the Cod. Alternatively Mr. His submission therefore was that even if the period prior to 25 January 1974 is excluded or the delay is considered as having been duly explained the prosecution must explain the delay thereafter in order to bring the case within the ambit of section 473 of the Cod. Alternatively Mr. Divecha submitted that even if the entire period upto 1 st April 1974 is excluded on the ground that there was no period of limitation prescribed in respect of the present offence under the old Code of Criminal Procedure the prosecution must show that it acted with deligence immediately after the Code was brought into operation in order to have the delay excused under sec. 473 of the Code. There can be no doubt that there is considerable force in the submission of Mr. Divecha. Even after 1-4-74 the sanction was not immediately obtained as is clear from the sanction order ex. 16. dt. 1st January 1975 Even if I were to accede to the request of Mr. Patel that two months time should the excluded under sub-sec. (3) of sec 470 for obtaining the requisite sanction the prosecution took over 6 months time to lodge a complaint against the respondent the complaint ex. 15 having been lodged on 9th January 1975 It was therefore submitted by Mr. Divecha that the prosecution had not led evidence explaining the delay to bring the case within the purview of sec 473 of the Code. Mr. Patel however relied on the latter part of sec. 473 which labs down that notwithstanding any thing contained in the foregoing provisions of Chapter XXVI the court may take cognizance of an offence after the expiry of the period of limitation if it is satisfied on the facts and in the circumstances of the case that it s necessary so to do in the interest of justice. Section 473 of the Code therefore invests the court with wide discretion submitted Mr. Patel to take cognizance of an offence notwithstanding the fact that the action is otherwise barred by limitation by virtue of sec. 468 read with sec. Section 473 of the Code therefore invests the court with wide discretion submitted Mr. Patel to take cognizance of an offence notwithstanding the fact that the action is otherwise barred by limitation by virtue of sec. 468 read with sec. 469 of the Code on two ground namely (i) that the delay has been satisfactorily explained having regard to the facts and circumstances of the case or (ii) it is necessary to do so i. e. to excuse the delay in the interest of justice It is therefore obvious on a plain reading of sec. 473 that if the interest of justice so demands it is always open to the court to take cognizance of the offence the bar of sec. 468 notwithstanding. Sub-section (1) of sec. 190 of the Code empowers the Magistrate of the First Class to take cognizance of an offence upon receipt of a complaint of facts constituting an offence or upon a police report or information received from any other person or on his own knowledge. The fact that the learned Magistrate took cognizance of this offence in total disregard of the bar of section 468 is the gravamen of the charge made by Mr. Divecha. This argument was sought to be assailed by Mr. Patel on two grounds namely (i) that no such submission was made in the trial court and the same should therefore not be entertained for the first time in appeal in the High Court and (ii) even if the same is entertained by this court the provision of sec. 473 of the Code is wide enough to come to the rescue of the prosecution as it cannot be gainsaid that the court would be loathe to allow an economic offender or a tax dodger to go scot free on a mere technicality. I have already dealt with the first grievance of Mr. Patel and negatived it. So far as the second contention is concerned there is no doubt that sec. 473 is couched in wide language presumably to enable the courts to take cognizance of offences where the interest of justice so demands. The point therefor bills down to this whether the facts and circumstances of the case require the court to over look the bar of sec. 468 to serve the ends of justice? 473 is couched in wide language presumably to enable the courts to take cognizance of offences where the interest of justice so demands. The point therefor bills down to this whether the facts and circumstances of the case require the court to over look the bar of sec. 468 to serve the ends of justice? In other words is it in the interest of justice that cognizance should be taken regardless of the right given to the accused under sec. 468 of the Code ? The intention of the law makers in introducing sec. 468 for the first time in the Code was obviously to avoid belated action against the individuals who are alleged to have committed an offence in the eye of law. It is also clear that the Parliament has considered it fit to provide a time limit in respect of only those cases where the punishment provided is for 3 years or less. In other words for more serious crimes no period of limitation is provided but here again it must be remembered that the Parliament was mindful of the fact that in certain caves the delay may be occasioned by circumstances beyond the control of the prosecution and in order to meet with such circumstances it made provision not only for exclusion of time if the delay is explained but also invested the court with power to overlook the delay if the interests of justice so demand. It was for this reason that the Parliament did not stop by enacting secs. 470 and 471 providing for exclusion of time in certain cases but took the next step of investing the court with wide discretion to disregard the bar of sec. 468 if the interests of justice so demand. The words it is necessary so to do in the interest of justice are words of wide amplitude and it is left to the court in each individual case to decide whether justice demands that the bar of sec. 468 should be bypassed having regard to the facts and circumstances of that case. It is needless to emphasise that the discretion must be exercised judicially and not in an arbitrary or capricious manner. 468 should be bypassed having regard to the facts and circumstances of that case. It is needless to emphasise that the discretion must be exercised judicially and not in an arbitrary or capricious manner. It therefore follows that the Parliament has in the scheme of Chapter XXVI resorted to a careful balancing of the relevant factors between two termini namely while every effort should be made to avoid delay in charging the offender on the one hand on the other the ends of justice should not suffer on the mere ground that the offence charged is a stale one. The essence of sec. 473 is that the interest of justice must not be defeated merely because the prosecuting agency was not vigilent enough to prosecute the offender within the time provided by sec. 468 of the Code. The ultimate and paramount anxiety of the court must be to see that the interest of justice reigns supreme and if the bar of sec. 468 stands in the way of achieving this objective sec. 473 can be invoked by the court to overlook the same altogether. The question whether it is necessary to overlook the bar of sec. 468 to serve the ends of justice would depend on the facts and circumstances of each case. ( 9 ) IT would be proper at this stage to consider the submission of Mr. Divecha that the words it is necessary so to do in the interest of justice appearing at the conclusion of sec. 473 take colour from the preceding words namely if it (court) is satisfied on the facts and circumstances of the case that the delay has been properly explained. In other words the contention of Mr. Divecha was that the words sit is necessary so to do in the interest of justice must be read ejusdem generis as they are words of general import following specific words. Now it is well settled that in order that the rule of ejusdem generis should apply the specific words must constitute a category class or genus then only things which belong to that category class or genus fall within the general words (see Halsburys Laws of England (Simonds edition) volume 36 page 397 ). Now it is well settled that in order that the rule of ejusdem generis should apply the specific words must constitute a category class or genus then only things which belong to that category class or genus fall within the general words (see Halsburys Laws of England (Simonds edition) volume 36 page 397 ). The Supreme Court in the Stare of Bombay v. Ali Gulshan A. I. R. 1955 S. C. 810 observed that the rule of ejusdem generis must be confined within narrow limits and general of comprehensive words should receive their full and natural meaning unless they are clearly restrictive in their intendment. It was pointed out that it is requisite that there must be a distinct genus which must comprise more than ore species before the rule can apply. Again in Lila Vati Bai v. State of Bombay A. I. R. 1957 S. C. 521 it was observed that the rule of ejusdem generis is intended to be applied where general words have been used following particular and specific words of the same nature on the established rule of construction that the Legislature presumed to use the general words in a restricted sense; that is to say as belonging to the same genus as the particular and specific words Therefore it is unnecessary to multiply decisions on this point as it seems to be well settled by a line of decisions of the Supreme Court that the rule of ejusdem generis can be invoked only if there is a common thread passing through the previous clauses which would control the words of general import. Having regard to this settled legal position let us turn to sec. 473 of the Code once again. That section provides that the bar of limitation contained in sec. 468 of the Code can be surmounted by the prosecution if it is able to explain the delay having regard to the facts and circumstances of the case or the court thinks that it is necessary to excuse the delay in the interest of justice. What is then the genus because sec. 473 clearly deals with two types of cases (i) where the delay can be explained and (ii) where it is in the interest of justice to condone the delay. What is then the genus because sec. 473 clearly deals with two types of cases (i) where the delay can be explained and (ii) where it is in the interest of justice to condone the delay. If the delay can be explained there would be no question of the court exercising jurisdiction for excusing the delay in the larger interest of justice. It is only in those cases where the prosecution is not able to explain the delay that the court would be required to exercise jurisdiction for condoning the delay under the latter part of sec. 473 namely in the interest of justice. There is therefore no genus or common thread discernible from the specific words so as to control the second part of the section or to infer that Parliament intended to restrict the scope of that part of the section. I am therefore of the opinion that on a plain reading of sec. 473 of the Code the submission based on the rule of ejusdem generis cannot be sustained. ( 10 ) THE next question to be considered is whether the facts and circumstances of the case demand that even though the prosecution has hot been able to explain the delay to the satisfaction of the court in the interest of justice delay should be condoned or excused ? In this behalf the submissions of Mr. Divecha may be summed up as under: The scheme of the Act clearly indicates that considerable latitude is given to the department to follow either of the two procedures namely (i) impose penalty for violation or contravention of any provision of the Act or (ii) prosecute the dealer under sec. 63 of the Act. There is also a provision in sec. 69 which empowers the Commissioner to accept from any person charged with an offence under sec. 63 of the Act by way of composition of the offence a sum not exceeding 2 0 rupees. Even after deciding to prosecute the offender the department is given the further latitude of compounding the offence by virtue of sec. 69 of the Act. Further no minimum sentence is provided and the sentence provided by sec. 63 is simple imprisonment and/or fine only. The Court should therefore look to the offence rather than the offender in arriving at the conclusion whether the bar of sec. 468 should be overlooked. That is why sec. 69 of the Act. Further no minimum sentence is provided and the sentence provided by sec. 63 is simple imprisonment and/or fine only. The Court should therefore look to the offence rather than the offender in arriving at the conclusion whether the bar of sec. 468 should be overlooked. That is why sec. 468 of the Code prescribes a period of limitation in respect of not so serious offences which are punishable with imprisonment of three years or less. The provisions of the Act when read in the correct perspective make it clear that the intention of the Legislature was not to visit the offender with a deterrent punishment and the objective was clearly reformatory. ( 11 ) MR. Patel the learned Public Prosecutor countered thus: The respondent in the instant case is a taxdodger an economic offender who manipulated the accounts with a view to escaping the liability to pay tax. While enacting the Economic Offences (Inapplicability of Limitation) Act 1974 Parliament took into consideration the fact that by their very nature such offences do not come to light as soon as they are committed and are often preceded by long periods of investigation or adjudication In the process the period of limitation prescribed for such offences by sec 468 of the Code may run out thus enabling such economic offenders who are responsible for shattering the economy of the country to escape the rigours of law. To avoid such a result Parliament enacted the Economic Offences (Inapplicability of Limitation) Act 1974 and set out in the schedule to the Act the enactments to which Chapter XXVI of the Code shall not apply. One such enactment mentioned in the Schedule to the said law is the Central Sales Tax Act 1956 Taking cue from this enactment it was submitted that the intention of the Parliament is clearly discernible that an economic offender or a tax dodger like the present respondent should not be allowed to escape the punishment provided by law merely on the ground that the prosecution has become stale by efflux of time. ( 12 ) IN order to answer the crucial question whether the facts and circumstances of the case demand that the bar of sec. 468 of the Code be overlooked in the larger interest of justice the court must address it self the following questions: Who is the offender ? ( 12 ) IN order to answer the crucial question whether the facts and circumstances of the case demand that the bar of sec. 468 of the Code be overlooked in the larger interest of justice the court must address it self the following questions: Who is the offender ? What is his offence ? Who is the victim of his offence ? Why is it made an offence under the Act i. e. what is the mischief it seeks to suppress? Will the ends of justice be better served or defeated if the bar of sec. 468 of the Code is applied? These I think are some of the valid considerations to be borne in mind while deciding the question whether the delay in prosecuting the accused should be disregarded in the interest of justice. The accused respondent before the court is an economic offender a tax dodger whose crime is the result of a deliberate and calculated manoeuvre made in the quietude of his office. It would be reasonable to presume that he was aware of the risk he was taking when he decided to embark upon this course which was likely to lead him to prison. Regardless of the risk involved he thought it profitable to manipulate his accounts with a view to avoiding or reducing his liability to pay tax under the Act. Failure to maintain true accounts of the value of the goods bought or sold is made an offence so that dealers who are generally shrewd businessmen are deterred from indulging in such activities which would cause loss of revenue to the exchequer. A multitude of such offenders are collectively responsible for throwing away the revenue estimates which are the basis on which national development programmes are undertaken by the country. Such people are largely responsible for shattering the economy of the country and it is a moot question if such people should be allowed to go scot free on the plea that the prosecution is stale. Such people are largely responsible for shattering the economy of the country and it is a moot question if such people should be allowed to go scot free on the plea that the prosecution is stale. It is impossible to attribute to the legislature such an intention and this is clear if we bear in mind the objects and reasons which weighed with the Parliament in enacting the Economic Offences (Inapplicability of Limitation) Act 1974 Merely because all such legislations which deal with economic offences have not been included in the schedule to the said Act it is fallacious to argue that the legislature intended that not too serious a view should be taken of such offences. These are not offences against an individual committed in the heat of the moment these are deliberate calculated crimes committed by shrewd are crafty businessman against the society at large for which they cannot be easily forgiven. By their very nature such offences do not come to light immediately and are generally preceded by prolonged inquiries and hence in a large number of such cases the period of limitation provided by the Code may run out and it is precisely for dealing with such situations that over ridding powers are given by sec. 473 of the Code to overlook the delay if the interest of justice so demands. To allow such economic offenders to escape on the sole ground that the prosecuting agency is guilty of delay would frustrate the very object and purpose of the Act and defeat the ends of justice. True it is that the Act has given considerable latitude to the department either to impose a penalty or prosecute the offender and even after prosecuting him to compound the breach but it must be remembered that the Act deals with a variety of offences simple and grave and in order to see that simple matters have not to be carried to courts such powers were necessary. Hence merely because wide discretionary powers have been given to the department it cannot be said that the legislature did not intend to treat such cases severely. In fact such economic offenders have to be penalised because their crime is a calculated one the punishment could only have been provided so that the offender may be deterred from repeating his performance and others like him may learn a lesson. In fact such economic offenders have to be penalised because their crime is a calculated one the punishment could only have been provided so that the offender may be deterred from repeating his performance and others like him may learn a lesson. The intention could not be reformative because such intelligent and shrewd offenders commit such economic offences after due deliberation having regard to the risk involved. Once you minimise the risk such offences will multiply. To allow such offenders to escape on the technical ground of delay would defeat the ends of justice and bring the courts into disrepute. Albeit the factum of delay may be a valid consideration for fixing the sentence but it would not be a good ground for refusing to take cognizance in such cases. I am therefore of the opinion that such are fit cases for invoking sec. 473 of the Code. . . . . . . . . . . . . . . . . . . . . ( 13 ) I therefore convict the accused under sec 63 (1) (i) of the Act and direct him to pay a fine of Rs. 1500. 00 i. e. to suffer simple imprisonment for 12 months. The respondent is given three weeks time to pay up the line. If he fails to pay the fine warrant for his arrest shall issue. [ Rest of the Judgment is not material for the reports. ] .