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2007 DIGILAW 26 (PAT)

Ramnath Prasad v. Union Of India

2007-01-05

MADHAVENDRA SARAN

body2007
Judgment 1. This is an application for quashing the entire criminal proceeding including the order of cognizance dated 10.9.1991 passed in Complaint Case No. 345/91 corresponding to Trial No. 149/05 pending in the Court of Presiding Officer, Special Court, Economic Offences, Muzaffarpur. 2. The petitioner is a partner of the firm M/s Raghvendra Narayan Singh having its office at Chhatauni, P.O. & P.S.- Motihari, District East Champaran which was engaged in retail sale of country liquor. It is said that the petitioner Ramnath Prasad made a statement on oath before opposite party no. 2 on 25.1.1989 that the auctions taken in his name belong to firm M/s Raghvendra Narayan Singh in terms of clause 16 of the partnership deed. It is alleged that rectified partnership deed was filed on 17.9.89 in which clause 16 of the original partnership deed was deleted to mean that the investments made by the partners would be treated as investments made by them alone. It is further alleged that the petitioner had stated that his statement on oath on 25.1.1989 was wrong and auction taken in his name on 23.3.1988 does not belong to the firm M/s Raghvendra Narayan Singh. Further the investment in two shops as mentioned in the complaint were also not satisfactorily explained before the opposite party no. 2. The complaint petition was accordingly filed after obtaining sanction from opposite party no.1 under Section 279(1) of the Income Tax Act (in short as the Act). The Presiding Officer, Special Court, Economic Offences, Muzaffarpur by the impugned order dated 10.9.1991 took cognizance of the offence under Section 277 of the Act. 3. Learned counsel in support of his argument raised the following points: (i) that the amount Rs. 2,01,0007- was contributed by seven partners and it was not the exclusive investment of the petitioner; (ii) that the order of assessment which is the basis of the complaint is an appealable order and the appeal has been preferred before the Commissioner of Appeal and therefore, the present complaint till the disposal of appeal should not proceed with; (iii) that even the order passed by the court of appeal is appealable before the Tribunal and in case the Tribunal allowed the matter then the whole prosecution would fall. 4. On the other hand, learned standing counsel supported the impugned order. 5. Section 277 of the Act reads as follows: "277. False statement in verification etc. 4. On the other hand, learned standing counsel supported the impugned order. 5. Section 277 of the Act reads as follows: "277. False statement in verification etc. If a person makes a statement in any verification under this Act or under any Rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not belong to be true, he shall be punished: (i) In a case where the amount of tax, which would have been evaded if the statement of account had been accepted as true, exceeds one hundred thousand rupees; with rigorous imprisonment for a terms which shall not be less than six months but which may extend to seven years and with fine; (ii) In any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine." 6. According to the complaint petition, petitioner made false statement on oath either on 25.1.1989 or 7.9.1990. In this way the petitioner made a statement which is false and which he does not believe to be true and as such committed an offence punishable under Section 277 of the Act. Learned Special Judge after finding prima facie case by the reasoned order took cognizance. 7. Now coming to the argument of the petitioners counsel this Court finds that the pendency of assessment appeal or other proceedings under the Act by itself does not preclude the department from launching a prosecution. The criminal court in appropriate cases however may stay the proceedings in view of such pendency where the court takes the view that the conclusion arrived at by the appellate authorities under the Act would have a relevance upon the decision to be reached by the criminal court. 8. Learned Presiding Officer has found prima facie case against the petitioner. The impugned order of cognizance indicates application of judicial mind and satisfaction of the court. 9. In the facts and circumstances of the case, at present I find no error in the order of cognizance. The continuation of criminal proceeding at this stage cannot be accepted to be abuse of the process of the Court. 10. This application is accordingly dismissed. 11. 9. In the facts and circumstances of the case, at present I find no error in the order of cognizance. The continuation of criminal proceeding at this stage cannot be accepted to be abuse of the process of the Court. 10. This application is accordingly dismissed. 11. However, the petitioner will be at liberty to file an application before the court below for stay of proceedings and if such application is filed then the same shall be considered and disposed of in accordance with law.