Judgment : The’ petitioner is the accused in E.O.C.C.No.1449 of 1985 on the file of the Additional Chief Metropolitan Magistrate (Economic Offences-II), Egmore, Madras. 2. He is the owner of Race Horses and is assessed to wealth tax in his individual capacity. For the valuation date 33. 1978, relevant for the assessment year 1978-79, he furnished his wealth tax return on or about 1. 1979 declaring a net wealth of Rs.8,21,600. Subsequently on or about 22. 1983, a revised return had been filed declaring a net wealth of Rs.l,12,240. He was having running accounts with Race Clubs. There was a credit balance of Rs.21,499 on 33. 1978 in his account with Royal Western Turf Club. He omitted to disclose this account in the wealth tax particulars declared for the wealth-tax assessment purposes. 3. On 20.1.1981 and subsequent dates, searches were conducted in the premises of the asses see at Kanadukathan and during the course of such search, substantial quantities of silver articles were found. He represented to the authorities that he had large quantities of silver trophies and cups won in race during the years 1953 to 1969 and such cups and trophies were handed over to the silversmith for converting into silver articles. The explanation so tendered was not accepted by the authorities. The value of these articles was not included in the wealth-tax return filed by him, and their value was calculated at Rs.1,12,000. 4. The Wealth-Tax Officer completed the assessment on 23. 1983 for the assessment year 1978-79 including Rs.21,499standing to the credit of his account with Royal Western Turf Club and Rs.1,12,000 representing the value of the silver articles. 5. On the ground that the abovementioned particulars of wealth were concealed, penalty proceedings under Sec.l8(l)(c) of the Wealth Tax Act, 1957, were initiated for the assessment year 1978-79. In the penalty proceedings, the Wealth-Tax Officer levied a penalty of Rs.680. Aggrieved by this, the petitioner preferred an appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner cancelled the penalty imposed by the Wealth-Tax Officer. The Revenue however agitated the matter by filing appeal before the Income Tax Appellate Tribunal in vain. 6. In the penalty proceedings, the Wealth-Tax Officer levied a penalty of Rs.680. Aggrieved by this, the petitioner preferred an appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner cancelled the penalty imposed by the Wealth-Tax Officer. The Revenue however agitated the matter by filing appeal before the Income Tax Appellate Tribunal in vain. 6. However, the tax authorities were of the uniform view that the value representing the cups and trophies is includible in the wealth tax returns, inasmuch as the cups and trophies cannot at all be construed as Svorks of art’ falling within Sec.5(1)(xii) of Wealth Tax Act, 1957. At the instance of the petitioner, the Income Tax Appellate Tribunal, Madras, referred the following questions to this Court for its opinion by its order dated 6th December, 1985: “(1) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that cups and trophies are not exempt under the Wealth Tax Act? (2) Whether the Tribunal was right in law in not extending the tenor of ‘works of art’ coming in the provisions of Sec.5(1)(xii) of the Wealth Tax Act to the cups and trophies?” The said reference is stated to be still pending. 7. The Wealth-Tax Officer, Central Circle-XII, Madras-34, also launched a prosecution by filing a complaint before the Additional Chief Metropolitan Magistrate, Economic Offences, Egmore, Madras-8 against the petitioner for alleged, offences under Sec.420 read with Sec.511, I.P.C. and Secs.35-A and 35-D of the Wealth Tax Act, 1957, against the petitioner, which was taken on file as E.O.C.C.No.1449 of 1985 on his file. 8. On receipt of process, the petitioner came forward with the present action invoking the inherent jurisdiction of this Court to quash the proceedings so initiated against him. 9. The primary contention of Mr.I.Subramanian, learned counsel appearing for the petitioner is that if the Income-Tax Department had no case against the petitioner for the purpose of penalty proceedings, as had been held by the Appellate Assistant Commissioner, as confirmed by the Income-Tax Appellate Tribunal, Madras, then the petitioner cannot be prosecuted on the same set of facts, inasmuch as the same is sheer harassment amounting to prosecution by misuse of law. 10. 10. Learned Senior Counsel Mr.K.Alagarswami, appearing for the respondent-Department would however repel such a submission and state that there is no legal bar at all for prosecution, if launched against the petitioner, on the same set of facts for violation or refraction of the provisions of Sec.420 read with Sec.511, I.P.C. and Secs.35-A and 35-D of the Wealth Tax Act, 1957, inasmuch as the findings given by the tax authorities are not at all binding on the Criminal Court trying the offences. 11. Anxious consideration may now be given to the submission of either Counsel. 12. In support of the submission, learned counsel, for the petitioner would place reliance on two decisions, one of Punjab and Haryana High Court and another of Supreme Court. 13. Kanshi Ram Wadhwa v. Income-Tax Officer, Kurukshetra, (1984)145 I.T.R. 109 , in this case, during the assessment proceedings, the Income-Tax Officer passed an order imposing penalty on the asses see. That order was quashed by the Appellate Assistant Commissioner. But, on the strength of the order of the Income-Tax Officer, criminal prosecution was launched against the asses see under Sec.277 of the Income-Tax Act, 1961. The asses see contended that when the case of the Department for imposition of penalty had faltered, thee was no case to launch a criminal prosecution against the asses see. On these facts, it was held that if there was no case for sustenance of penalty, it equally would not be a case for criminal prosecution and therefore, the criminal complaint filed against the asses see was liable to be quashed. 14. Uttam Chand and others v. Income-Tax Officer, Central Circle, Amritsar, (1982)133 I.T.R 909, in this case registration of a partnership firm under the Income-Tax Act, 1961 had been granted and the firm was assessed for several years as a registered firm. For the assessment year 1969-70, the Income-Tax Officer cancelled the registration on the ground that the firm was not genuine. The Tribunal, on an appraisal of the materials on record, found that the firm was genuine and set aside the cancellation order of the Income-Tax Officer. In the meantime, the Income-Tax Officer initiated prosecution of the partners of the firm under Sec.277 of the Income-Tax Act for having filed false returns. The Tribunal, on an appraisal of the materials on record, found that the firm was genuine and set aside the cancellation order of the Income-Tax Officer. In the meantime, the Income-Tax Officer initiated prosecution of the partners of the firm under Sec.277 of the Income-Tax Act for having filed false returns. The Punjab and Haryana High Court, in revision petition for quashing the prosecution against the firm, held that the Tribunal’s finding was not binding on the criminal court and cannot be a bar to the criminal proceedings. Aggrieved by this order, the matter had further been agitated before the Supreme Court by filing a Special Leave Petition. Their Lordships of the Supreme Court held on these facts that in view of the finding recorded by the Appellate Tribunal that J was a partner of the firm and that the firm was genuine, the asses see could not be prosecuted for filing false returns. 15. Learned counsel appearing for the respondent-Department on his party would draw my attention to the decision of the Supreme Court reported in P.Jayappan v. S.K. Perumal, First Income-Tax Officer, Tuticorin, (1984)149 I.T.R. 696. In that case, the petitioner submitted a return for assessment year 1977-1978 disclosing an income of Rs.13,380. During the course of search of his premises, certain incriminating documents and books of accounts were seized revealing suppression of material facts. On the allegation that he had deliberately filed false returns, a complaint was filed against him in the Court of the Additional Chief Judicial Magistrate for the alleged offence under Se,cs.276 and 277 of the Income-Tax Act, 1961 and Secs.193 and 196 of the Indian Penal Code. Similar complaints were made for the three succeeding assessment years. He thereupon filed petitions under Sec.482, Cr.P.C. before this Court to have the proceedings quashed. This court dismissed all the petitions. The matter was further agitated before the Supreme Court by way of Special Leave Petition under Art.136 of the Constitution of India. Their Lordships of the Supreme Court on these facts, while dismissing the petition, held as follows: "The pendency of the reassessment proceedings could not act as a bar to the institution of criminal prosecution for the offences punishable under Sec.276-Cor Sec.277 of the Income Tax Act, 1961. Nor could the institution of the criminal proceedings, in the circumstances, amount to an abuse of the process of the Court. Nor could the institution of the criminal proceedings, in the circumstances, amount to an abuse of the process of the Court. The High Court was, therefore, right in refusing to quash the prosecution. There is no provision in law which provides that a prosecution for the offences under Sec.276-C or Sec.277 of the Income Tax Act cannot be launched until reassessment proceedings initiated against the asses see are completed. A mere expectation of success in some proceeding in an appeal or a reference under the Income Tax Act cannot come in the way of the institution of criminal proceedings under Sec.276-C and Sec.277 of the Act. The criminal court no doubt has to give due regard to the result of any proceedings under the Income Tax Act having a bearing on the question in issue and in an appropriate case it may drop the proceedings in the light of an order passed under the Act. It does not, however, mean that the result of a proceeding under the Act would be binding on the criminal Court. The Criminal Court has to Judge the case independently on the evidence placed before it. Sec.279(1) does not provide that the mere fact that there is a possibility of the Commissioner passing an order waiving or reducing the penalty imposed or imposable on the accused under Sec.271(1)(c), prosecution for an offence under SEc.276-C or Sec.277 shall not be instituted. In appropriate cases the criminal Court may adjourn or postpone the hearing of a criminal case in exercise of its discretionary power under Sec.309 of the Cr.P.C. if the disposal of any proceeding under the Income Tax Act which has a bearing on the proceedings before it is imminent so that it may take into consideration also the order to be passed therein. Even here the discretion should be exercised judicially and in such a way as not to frustrate the object of the criminal proceedings. There is no rigid rule which makes it necessary for a criminal Court to adjourn or postpone the hearing of a case before it indefinitely or for an unduly long period only because some proceeding which may have some bearing on it is pending elsewhere." 16. It is clear from the aforesaid decisions that there is no bar for criminal prosecution even if there is no case for sustenance of penalty in the departmental proceedings. It is clear from the aforesaid decisions that there is no bar for criminal prosecution even if there is no case for sustenance of penalty in the departmental proceedings. Further light is also thrown that in an appropriate case the criminal court may drop the proceedings in the light of the order passed by the departmental authorities. It is also open to the criminal court to judge a case independently on the evidence placed before it, taking into account the peculiar facts and circumstances of each case. 17. So far as the case on hand is concerned, the averments in the complaint do point out that during the course of search what were seized from the custody and possession of the petitioner were not cups and trophies but only silver articles. It was only the case of the petitioner that the silver cups and trophies which he won in the horse races during the period from 1953 to 1969 were converted into silver utensils and articles with the aid of a silversmith. It is only the value of those converted silver articles - he claims - was not included in the wealth tax returns on the bona fide belief that the cups and trophies were exempted from the purview of the Wealth Tax Act as falling under Sec.5(1)(xii) thereof. This aspect of the case of the petitioner was not at all accepted by the department. The further case of the respondent as revealed from the complaint is that even if the seized articles were actually converted from cups and trophies as claimed by the petitioner, even then it is not exempt from the wealth tax as not falling under Sec.5 (1)(xii) of the Wealth Tax Act. 18. Leave alone this aspect of the case, the fact whether the silver articles seized from the custody and possession of the petitioner during the course of search were actually the conversion from the cups and trophies is a disputed one, which has to be decided by the trial Court by adduction of evidence. 18. Leave alone this aspect of the case, the fact whether the silver articles seized from the custody and possession of the petitioner during the course of search were actually the conversion from the cups and trophies is a disputed one, which has to be decided by the trial Court by adduction of evidence. This aspect of the matter, the tax authorities at various stages had not at all taken into consideration and they simply, proceeded on the footing that the value of Rs.1,12,000 represents the cups and trophies won by the petitioner in horse races and such trophies and cups cannot be construed as ‘works of art’ falling under exemption under Sec.5(1)(xii) and gave a further finding that the petitioner had been under the bona fide impression that the value representing those cups and trophies was to be exempted under the aforesaid provisions of the Act and consequently cancelled the penalty proceedings. In case the criminal court comes to a conclusion on consideration of the materials and evidence placed before it that the silver articles seized during the course of search were not actually converted from the cups and trophies, then the petitioner could not at all offer any explanation for his not showing the value of those silver articles in the wealth tax returns submitted by him and in such an eventuality, it would amount to wilful suppression of material facts besides false verification in the filing of the returns before the tax authorities in order, to cheat them giving rise to criminal prosecution for refraction orviolation of the provisions of Secs.35-Aand 35-D of the Wealth Tax Act as well as under Sec.420 read with Sec.511of the Indian Penal Code. In such state of affairs, to say that the prosecution as launched against the petitioner is not sustainable, on the face of the dismal failure of the penalty proceedings by the department, cannot at all be countenanced. 19. The petition is therefore liable to be dismissed and is hereby dismissed.