Judgment The petitioners in the above Crl.O.Ps., who are the 5th and 6th accused respectively in S.T.R.No.1402 o 2005 on the file of the Judicial Magistrate No.II, Karaikal, wherein they are facing trial for the alleged offences under Section 9 read with 10 of the Central Sales Tax Act, 1956 (hereinafter referred to as CST Act) and Section 49 of the Pondicherry General Sales Tax Act, 1967 (hereinafter referred to as ‘PGST Act’) have filed the above Crl.O.Ps., seeking to quash all further proceedings therein. 2. A perusal of the allegations contained in the complaint filed by the respondent against the accused reveals the following facts: (a) The first accused, who is the proprietor of Lakshmi Polythene, registered his business under the CST and PGST Acts and its R.C.Nos. are 402715 and 1614/KRC/dt.25. 1998 under the CST and PGST Acts respectively and as such the first accused is the dealer under the respective Acts. The second accused, who was working as Accountant with the first accused, was the authorized representative of A1. (b) The first accused was permitted by the respondent Department under the provisions of the CST Act to purchase specified items at concessional rate of tax as per the provisions of Section 8 of the CST Act. At the request of A1, Form C was issued as prescribed under the CST Act by the statutory authority under the PGST Act for the purpose of goods covered in the certificate of Registration issued by the respondent department to A1 for bona fide use. (c) It is alleged in the complaint that contrary to such permission granted to him, A1 misused the C forms issued to him and purchased Soda Ash for a value of Rs.89,43,189.25 for the year 2002-2003 and issued the ‘C’ Form No.PY/C 906023. The first accused contrary to the permission granted to him purchased Soda Ash from A7 by misusing the ‘C’ Forms issued to him. The said misuse came to the notice of the respondent in the course of inspection made on 19. 2003 by the officers of the respondent department. It is further alleged in the complaint that in the course of the said inspection, it was also noticed that Soda Ash was purchased by A1 from A7 by misusing the ‘C’ Form and such C form was also not available in the place of business of A1. 2003 by the officers of the respondent department. It is further alleged in the complaint that in the course of the said inspection, it was also noticed that Soda Ash was purchased by A1 from A7 by misusing the ‘C’ Form and such C form was also not available in the place of business of A1. (d) The first accused did not inform the statutory authorities of the respondent department about the loss of the ‘C’ Form issued to his business concern. As per Rule 14(9) of the CST Act, it is the duty of the A1 to maintain the prescribed register and to inform the statutory authority of the respondent department about the loss, if any, of the ‘C’ Forms received by A1 in the course of his business and such failure on the part of A1 constitutes the violation of the provisions of the CST Act and the Rules and any breach of the Rule 14 constitutes an offence punishable under Rule 16 of the CST (P) Rules 1967. (e) It is further alleged in the complaint that in the course of enquiry conducted on 29. 2003 by the officers of the Sales Tax Department, the third accused had deposed that with a view to help AS caused A4 for lending the registration number of Sri Krishna Enterprises having PGST No.105302 and CBT No-12893/PRC/dt.1. 2001 owned by A4 as A4 was working under his control in his another organization, namely, Kutty enterprises owned by A3. In that process, the registration number owned by A4 and declaration Form ‘C’ No.906023 given to A1 by the respondent department are misused and such misuse of ‘C’ Forms and lending of registration number are prohibited under the PGST and CST Acts read with rules made thereunder. (f) In the course of the enquiry conducted on 20.11.2003 by the officers of the respondent department, A6 has deposed that he had received the purchase order and payment for sale made in the name of Sri Krishna Enterprises, Pondicherry from A5 in multiple demand drafts ranging from Rs.40,000 to Rs.45,000 purchased on the same day and from the same bank. It is alleged in the complaint that A6 stated in the course of enquiry that he has warned A5 not to continue such unhealthy practice. It is alleged in the complaint that A6 stated in the course of enquiry that he has warned A5 not to continue such unhealthy practice. (g) In the course of cross verification with the Sales Tax Authorities of the Sate of Gujarat, it is found that A7 sold the Soda Ash for the value of Rs.89,43,189.25 in the name of Sri Krishna Enterprises owned by A4 by accepting the declaration Form No.906023 which was issued to A1. (h) It is further alleged in the complaint that the photocopy of the Form ‘C’ No.PY/C 906023 received form the Sales Tax Authorities of the State of Gujarat revealed that A1 to A5 in tandem with one another affixed the emblem seal and office seal of the respondent department without any authority of law on the said declaration form issued to A1 with an intention to cause revenue loss and thereby they are punishable under Section 49(2)(b) of the PGST Act and Section 9 of the CST Act. (i) It is further alleged in the complaint that A1 is fully aware that he has been permitted to buy specified plastic granules only by using ‘C’ Forms issued to him, but A1 along with other accused conspired together and fraudulently misused the ‘C’ Form issued to A1 and evaded payment of tax. Hence, A1 is liable for the violation of Rule 14(9)(10) of the CST Rules and also liable to be punished under Rule 16 of the CST Rules. Similarly, the misuse of ‘C’ Forms by A1 in connivance with the other accused amounts to an offence under Section 10(a) of the CST Act. (j) It is alleged in the complaint that A4 issued a Certificate in Form ‘C’ required under CST Act to make inter-State purchase at concessional rate knowing fully well that such declaration in ‘C’ Form is false in material point of time at which it was issued and thereby committed an offence under Section 197 I.P.C. It is further alleged that A5, A6 and A7 were in tandem with A2, A3 and A4 misused the declaration Form ‘C’ No.PY/C 906023 knowing fully well that it is false at material point and thereby A5 to A7 committed the offence punishable under Section 198, 200 and 471 I.P.C. and also under Sections 49(2)(b) of the PGST Act and Sections 9 and 10(e) of the CSS Act. (k) It is further alleged in the complaint that A6 as the distributor of A7 received Form ‘C’ declaration given by A5 and surreptitiously used it as true and genuine knowing fully well that it was a false and fabricated Form ‘C’ and thereby A5 and A6 committed an offence punishable under Section 196 I.P.C. 3. On the aforesaid allegations, the learned Judicial Magistrate took the complaint on file for the offences under Sections 49(2)(b) of the PGST Act read with 9 of the CST Act. 4. Being aggrieved by that A5 and A6 have come before this Court. 5. Heard both. 6. Mr. S. Shunmuga Velayutham, learned Senior counsel appearing on behalf of A6 submitted that except the statement recorded from A6, there is no other material whatsoever to implicate him in the case. The learned senior counsel submitted that even in that statement recorded from A6, he has not admitted his guilt and the statement is exculpatory in nature. When the said A6 had not admitted his guilt categorically and the statement is only exculpatory in nature, the same cannot be relied upon. 7. In support of the said contention, based reliance on the decision Palvinder Kaur v. State of Punjab AIR 1952 SC 354 and the decision in Kamalashanker Bhuleshanker Dave v. State of Gujarat (1963) 2 Cri.L.J.611. 8. Mr. T. Sai Krishnan, learned counsel appearing for A5 submitted that there are no sufficient allegations in the complaint disclosing the ingredients of the offences alleged against the petitioners. The learned counsel submitted that A5 is not a registered dealer under the Pondicherry General Sales Tax Act on the file of the complainant. When A5 is not a dealer and no tax, fee or any other amount is due from him, he cannot be prosecuted for the offence under Section 49(2)(b) of the PGST Act. 9. On the aforesaid submissions Mr. T.P. Manoharan, learned Special Public Prosecutor was heard. 10. When A5 is not a dealer and no tax, fee or any other amount is due from him, he cannot be prosecuted for the offence under Section 49(2)(b) of the PGST Act. 9. On the aforesaid submissions Mr. T.P. Manoharan, learned Special Public Prosecutor was heard. 10. The learned special Public prosecutor drew the attention of this Court to the definition clauses contained in Section 2(g), 2(h)(iii) and (v) and Section 29 and 49(2)(b) of the PGST Act and submitted that A5 and A6 also will fall under the definition of a dealer and since A1 is a dealer under the PGST Act and as such A5 and A6 have acted as commission Agents of A1 and they have also evaded payment of tax, they are liable to be prosecuted under Section 49(2)(b) of the PGST Act. Te learned Special Public Prosecutor basing reliance on the decision K. Ashoka v. N.L. Chandrashekar and Others (2009) 5 SCC 199 submitted that in a quash petition the Court has to see as to whether the averments contained in the complaint, prima facie, reveals the ingredients of the offences alleged and it is not open to this Court, at this stage, to appreciate evidence as the same is the function of the trial Court. 11. I have considered the submissions made on either side and perused the materials available on record. 12. 11. I have considered the submissions made on either side and perused the materials available on record. 12. Considering the rival contentions, it will be useful to refer to the provisions contained in Sections 2(g), 2(h)(iii) and (v) and Section 29 and 49(2)(b) of the PGST Act which read as follows: “2(g): “Casual Trader means a person who has, whether as principal agent, or in any other capacity, occasional transactions of a business nature involving the buying, selling, supplying or distributing of goods in the Union Territory, whether for cash, or deferred payment, or for commission, remuneration or other valuable consideration, and who does not reside or has no fixed place of business within the Union Territory; 2(h): “Dealer means any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash, or for over deferred payment, or for commission, remuneration or other valuable consideration and includes – 2(h)(iii): a commission agent, a broker and del credere agent or an auctioneer or any other mercantile agent, by whatever name called; who caries on the business of buying, selling, supplying or distributing goods on behalf of any Principal; 2(h)(v): a person engaged in the business of transfer otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration. 29. Further mode of recovery: The assessing authority may at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the dealer at his last address known to the assessing authority) require any person from whom money is due or may become due to the dealer or any person who holds or may subsequently hold money for on account of the dealer to pay to the assessing authority, either forthwith upon the money becoming due or being held at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the dealer in respect of arrears of tax or fee or the whole of the money when it is equal to or less than arrears of tax or fee. .(2) The assessing authority may at any time or from time-to-time amend or revoke any such notice or extend the time for making any payment in pursuance of the notice. (3) Any person making any payment in compliance with a notice under this Section shall be deemed to have made the payment under the authority of the dealer and the receipt of the assessing authority shall constitute a good and sufficient discharge of the liability of such person to the extent of the amount referred to in the receipt. .(4) Any person making any payment to the dealer after receipt of the notice referred to in this Section shall be personally liable to the assessing authority to the extent of the payment made or to the extent of the liability of the dealer for the amount due under this Act, whichever is less. .(5) Where any person to whom a notice under this Section is sent objects to it on the ground that the sum demanded or any part thereof is not due by him to the dealer, or that he does not hold any money for or on account of the dealer, then nothing contained in this Section shall be deemed to require such person to pay the sum demanded or any part thereof to the assessing authority. .(6) Any amount which a person is required to pay to the assessing authority or for which he is personally liable to the assessing authority under this Section shall, if it remains unpaid, be a charge on the properties of the said person and may be recovered as if it were an arrears of land revenue. 49(2): Any person who – (b): fraudulently evades the payment or any tax assessed on him or any fee or other amount due from him under this Act, or” 13. The main issue that arises for consideration in the above quash petitions is that as to whether the petitioners herein, who are A5 and A6 can be prosecuted for the offence under Section 49(2)(b) of the PGST Act and for deciding the same, it is not necessary to consider as to whether they fall under the definition of ‘dealer’. It has to be pointed out that in the entire complaint it has not been alleged by the respondent that A5 and A6 are registered dealers on the file of the authorities under the PGST Act. It has to be pointed out that in the entire complaint it has not been alleged by the respondent that A5 and A6 are registered dealers on the file of the authorities under the PGST Act. 14. The contention of the learned counsel for the petitioners is that for prosecuting a person under Section 49(2)(b) of the Act, the following conditions should be satisfied, namely, that such person should have fraudulently evaded the payment of tax assessed on him or any fee or any other amount is due from him under the Act. According to the learned counsel no assessment order has been passed as against A1, who is the dealer on the file of the sales tax authorities of the Union Territory of Pondicherry. Similarly, as the petitioners herein have not been treated by the authorities concerned as dealers, the question of passing any assessment order does not arise as against them. Therefore, the question of ‘fraudulently evaded the payment of tax’ does not arise. Similarly, it is not the case of the respondent that any fee is payable by A5 and A6 under the Act. 15. The contention of the Special Public Prosecutor is that under Section 29 of the Act, the Sales Tax Authorities are empowered to recover any amount due from the assesses from any other person who owes money to the dealer by issuing a notice calling upon such person to pay the amount payable by such person to the Sales Tax Department and if such demand is not complied with then such person is liable for prosecution. 16. A reading of the averments in the complaint, as pointed out-above, do not show that the assessment order was passed against the first accused. In the absence of passing of any assessment order and in the absence of any averment in the complaint that any amount was due from A5 and A6 and in the absence of any notice calling upon A5 and A6 to pay the amount payable by them to A1 and they have failed to comply with such demand, the question of violation of Section 29 of the Act does not arise. When there is no such violation of Section 29 of the Act, then the provisions contained under Section 49(2)(b) of the PGST Act have no role to play as against the petitioners herein. When there is no such violation of Section 29 of the Act, then the provisions contained under Section 49(2)(b) of the PGST Act have no role to play as against the petitioners herein. Therefore, the contention of the learned counsel for the petitioners is well founded and merits acceptance. 17. For the aforesaid reasons, the above Crl.O.Ps. are to be allowed and accordingly, they are allowed quashing all further proceedings in S.T.R.No.1402 of 2005 on the file of the Judicial Magistrate No.II, Karaikal as against the petitioners herein alone. Connected Crl.M.Ps. are closed. 18. At this juncture, the learned special Public Prosecutor has brought to the notice of this Court that the respondent had sought for the permission of the learned Magistrate to file a separate complaint in respect of the alleged offences arising under I.P.C. as against the petitioners and other accused and consequently, as against the petitioners and other accused separate case has been filed and the same is pending. In view of the above submission, it is made clear that the quashing of the proceedings in STR No.1402 of 2005 as against the petitioners shall not stand in the way of the respondent from prosecuting the petitioners in respect of the offences arising under I.P.C.