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Allahabad High Court · body

2019 DIGILAW 1119 (ALL)

Offshore Exim. Ltd. v. State of U. P.

2019-04-29

RAJUL BHARGAVA

body2019
JUDGMENT : RAJUL BHARGAVA, J. 1. Heard Sri Sushil Shukla, learned Counsel for the applicant, Sri K.M. Tripathi, learned Counsel for the opposite party No. 2 and learned A.G.A. for the State. 2. The present application under section 482 Cr.PC has been filed for quashing the entire proceedings of Criminal Complaint Case No. 3472 of 2000 (Singhal Export Corporation v. M/s. Offshore Exim. Ltd. and others), under section 420 I.P.C., Police Station-Ganj, District-Rampur, pending in the Court of Additional Chief Judicial Magistrate-Ist, Rampur. 3. Brief facts giving rise to present application are that opposite party No. 2 filed complaint against applicant firm in the Court of Additional Chief Judicial Magistrate-Ist, Rampur which was registered as Complaint Case No. 3472 of 2000 with the averment with complainant is engaged in manufacture and sale of menthol in respect of which he has installed a unit. His firm is also registered under the State Sales Tax and Central Sales Tax. According to the rules of Uttar Pradesh Sales Tax Rules any menthol which is sold outside the State 10 per cent tax has to be paid and if the purchaser furnishes form-C in that eventuality trade tax is levied on a control rate of 4 per cent. Rules further stipulate that if any purchaser businessman wants to export menthol outside country then Form-H is to be supplied by him and in this case no sales tax is levied from the seller. According to the complaint, accused placed order of purchasing 2000 kgs of menthol and assured that the said menthol will be exported and in this behalf Form-H under the Central Sales Tax Rules shall be supplied to him. The deal was settled at the rate of Rs. 522.50/- per kg and the accused also assured that they have already obtained order of export of 2000 kg of menthol and they shall purchase the same for export. Therefore, the rate be reduced to 10 per cent whereupon the rate was fixed at Rs. 470/- per kg. It is also averred that the accused also assured opposite party No. 2 that in the event the menthol is not exported and he is unable to furnish Form-H, thus in lieu of it the accused shall pay Rs. 1 lac on purchase of 2000 kg of menthol or supply Form-C and Rs. 40,000/-. 470/- per kg. It is also averred that the accused also assured opposite party No. 2 that in the event the menthol is not exported and he is unable to furnish Form-H, thus in lieu of it the accused shall pay Rs. 1 lac on purchase of 2000 kg of menthol or supply Form-C and Rs. 40,000/-. It is stated that the applicant did not provide Form-H and thus a notice was sent to them on 31.05.1999 for furnishing Form-C and Rs. 40,000/- or Rs. 1 lac. Notices were again sent on 03.9.1999 and 13.11.1999 by the registered post but the accused neither furnished Form-H nor Form-C and Rs. 40,000/- nor Rs. 1 lac to him and on the basis of false representation that accused has an export order in order to make wrongful gain to himself and cause wrongful loss to complainant induced him to sell menthol at price of Rs. 470 per kg. As the accused did not supply Form-H, the Tax Department is demanding Rs. 92,782/- as ten per cent tax towards aforesaid transaction. Statement of opposite party No. 2 was also recorded under section 200 Cr.P.C. and he has also placed several documents regarding transaction between him and the accused. 4. The applicant was summoned to face trial vide impugned order dated 21.11.2000 by Additional Chief Judicial Magistrate-Ist, Rampur. The applicant feeling aggrieved, preferred revision in the Court of Sessions Judge, Rampur which, too, was dismissed by judgment and order dated 26.07.2003. 5. The applicant firm is engaged in export and import business. It is duly registered with Ministry of Commerce, Government of India, New Delhi and also with commercial and sales tax departments of the State and Central Governments. 6. It is argued that on 30.11.1998, the overseas buyer, namely, Exa Flor placed order of import of 2000 kg menthol crystal with the applicant firm. The import order stipulated that shipment of the product from the applicant firm shall be effected only after the approval of the samples sent by the applicant-firm. Based on the aforesaid import order from overseas buyer, the applicant firm contacted the complainant firm for purchasing 2000 kg of menthol on cash payment. The import order stipulated that shipment of the product from the applicant firm shall be effected only after the approval of the samples sent by the applicant-firm. Based on the aforesaid import order from overseas buyer, the applicant firm contacted the complainant firm for purchasing 2000 kg of menthol on cash payment. The applicant firm with hope that export order from the overseas buyer will materialize, the applicant firm also agreed with the complainant that it would supply Form-H to opposite party No. 2 for which the price of menthol was reduced to Rs. 470/- per kg. The applicant firm also made it clear to the opposite party No. 2 that in the event of non-supply of Form-H to them, then the applicant firm will either pay Rs. 1 lac or supply Form-C with payment of Rs. 40,000/- to the opposite party No. 2 in order to compensate/adjust towards tax, etc. Learned Counsel for the applicant has not disputed that trade tax and exemption is to be applied for certain transactions as is detailed by opposite party No. 2 in the complaint also. 7. Learned Counsel for the applicant has argued and admitted by the learned Counsel for the opposite party No. 2 that full payment towards cost of 2000 kg menthol was made to the complainant firm. However, in bona fide hope that the overseas buyer would ultimately approve the samples, the applicant-firm surely must have taken time in order to supply Form-H. The overseas firm did not approve the samples of menthol as they failed to conform to the standard as desired by them. Learned Counsel has emphatically submitted that the applicant firm paid Rs. 40,000/- by way of demand draft to complainant firm along with Form-C according to the terms of agreement between the parties. The factum of supplying the Form-C and payment of Rs. 40,000/- to complainant firm has not been disputed in the counter-affidavit. Submission of learned Counsel for the applicant is that from averment made in the complaint and the statement recorded under section 200 Cr.P.C. and the evidence on record, there is no evidence that the applicant has dishonestly induced the complainant firm to supply menthol at a reduced price on the pretext of exporting the same. Submission of learned Counsel for the applicant is that from averment made in the complaint and the statement recorded under section 200 Cr.P.C. and the evidence on record, there is no evidence that the applicant has dishonestly induced the complainant firm to supply menthol at a reduced price on the pretext of exporting the same. The transaction between the applicant firm and the complainant firm was absolutely genuine and no kind of any deception was ever played on the opposite party No. 2. He has further submitted that on account of non-supply of Form-H, if at all any loss was incurred by the complainant firm, it was open for him to file a civil suit for claiming damages. 8. Sri Sushil Shukla, learned Counsel for the applicant has submitted that no case for issuance of process/summons is made out, even if the allegations contained in the complaint are accepted on the face value in its entirety. He has placed reliance upon the judgment rendered in Anil Ritolla alias A.K. Ritoha v. State of Bihar and another (2007) 10 SCC 110 : 2007 (59) ACC 833 (SC), especially para-10 and 11 which are quoted below: "10. The transactions between the parties were for supply of goods. Admittedly, save and except supply of Form IX-C other terms and conditions of the contract had been complied with by them. Per se, supply or non-supply of Form IX-C of the Bihar Sales Tax Rules had nothing to do with the transactions for which the parties had entered into a contract. Non-issuance of the said form ex facie cannot give rise to commission of any offence. If the appellant or their principal were obligated to act under a statute and failed to perform their duties as indicated hereinbefore, as the statute itself provides for a remedy, ordinarily the same is required to be taken recourse to. In any event, the second respondent could have filed a suit for damages. 11. There cannot be any doubt or dispute whatsoever that an offence can be committed even if the parties had entered into a commercial transaction. In Rajesh Bajaj, this Court held so. But it is equally well settled that the allegations contained in the complaint petition must, prima facie, show inducement of the victim by the accused by making a representation. There cannot be any doubt or dispute whatsoever that an offence can be committed even if the parties had entered into a commercial transaction. In Rajesh Bajaj, this Court held so. But it is equally well settled that the allegations contained in the complaint petition must, prima facie, show inducement of the victim by the accused by making a representation. In a case of this nature, we are of the opinion that no case has been made out to form an opinion that the appellant had the requisite intention." 9. Learned Counsel for the opposite party No. 2 has submitted that there is ample material on record to demonstrate that the intention of the applicant firm was dishonest from the very inception and in fact he has no export order from any overseas firm and all the grounds taken by him pertains to their defence which can only be examined by the trial court. He has further submitted that even if complainant firm has remedy to claim damages for the loss incurred by him by non-supply of Form-H that would not absolve the applicant firm from being prosecuted in a criminal complaint. Learned Counsel for the opposite party No. 2 has candidly admitted that cost of 2000 kg of menthol was paid by the applicant firm and subsequently they have also paid Rs. 40,000/- along with Form-C to the complainant. 10. Above facts and circumstances of the case leave no room for doubt that principal part of the transaction stated in the complaint with regard to the payment of price of menthol by applicant firm is not alleged in the complaint. What is abundantly clear is that the dispute between the parties relate to non-conveyance of Form-H which had created a liability towards Central Sales Tax and moreover, essentially the grievance of opposite party No. 2 is non-supply of Form-H which in the facts of the case has occurred on account of unavoidable circumstances beyond the control of applicant firm. I may further record that nothing has been brought on record that the opposite party No. 2 incurred losses on account of any demand raised by Sales, Tax Department. In the complaint it is merely alleged that demand is being raised by the Sales Tax Department for the transaction in dispute. I may further record that nothing has been brought on record that the opposite party No. 2 incurred losses on account of any demand raised by Sales, Tax Department. In the complaint it is merely alleged that demand is being raised by the Sales Tax Department for the transaction in dispute. In my opinion, it cannot be said on any count that the applicant had in any manner deceived the complainant. It, at best raises civil dispute between the parties for which the opposite party No. 2 has an alternative remedy by way of filing a civil suit for damages. 11. In the, light of aforesaid, I am of the considered view that prima facie, no offence under section 420, I.P.C. is made out against the applicant. Therefore,) I do not find any valid reason for the impugned complaint and the proceedings arising thereof to proceed any further. 12. The present Criminal Misc. Application under section 482 Cr.P.C. is, accordingly, allowed. The entire proceedings including impugned summoning order dated 21.11.2000 of Criminal Complaint Case No. 3472 of 2000 (Singhal Export Corporation v. M/s. Offshore Exim. Ltd. and others), under section 420, I.P.C., Police Station-Ganj, District-Rampur, pending in the Court of Additional Chief/Judicial Magistrate-Ist, Rampur are hereby quashed.