1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN, JAIPUR BENCH, JAIPUR. JUDGMENT M/s Bharat Extrusions (Kota) Pvt. Ltd. Kota & Ors. Vs. State of Rajasthan & Anr. (S.B. Criminal Misc. Petition No.36/2000) S.B. Criminal Misc. Petition Under Section 482 Cr.P.C. Date of Judgment: November 11, 2010 PRESENT HON'BLE MR. JUSTICE R.S. CHAUHAN Mr.Mahesh Sharma, for the petitioners. Mr.Javed Chaudhary, Public Prosecutor. Mr.J.K. Singhi, for the respondent. BY THE COURT: Aggrieved by the order dated 29.10.1999, passed by the Additional Sessions Judge NO.1, Jaipur City, Jaipur and aggrieved by the order dated 2.9.1998, passed by the Special Judicial Magistrate (Economic Offences), Jaipur, the petitioners have approached this Court. By the latter order, the learned Magistrate had dismissed the petitioners' application under Section 245(2) Cr.P.C. for discharging them for offences under Section 276 B read with Section 278 B of Income Tax Act, 1961 relating to the assessment year 1983-84; by the former order, the Additional Session Judge had confirmed the order dated 2.9.1998 and had dismissed the criminal revision petition filed by the petitioners. 2 The brief facts of the case are that in 1989, a complaint was filed by the Dy. Commissioner of Income-tax (Assessment-I), Jaipur against the petitioners before the learned Magistrate. The allegations in the complaint were that during the course of tax assessment, in relation to the assessment year 1983-84, it was found that an amount of Rs.7,720/- as Tax Deducted at Source (TDS) was not deposited within two months as required under Rules but was deposited on 17.9.1984 i.e. after a delay of 25 months. According to the complaint, the petitioners have committed offences under Section 276 B read with Section 278 B of the Income-Tax Act ('the Act', for short). After receiving notice, the petitioners appeared before the trial court and submitted an application under Section 245(2) Cr.P.C. According to the petitioners, since the amount involved in the case, namely Rs.7,720/-, and the alleged delay of 25 months are insignificant, in view of Circular dated 28.5.1980 issued by the Government, the prosecution under Section 276 B read with Section 278 B of the Act should not have been launched. This was specially so, when the amount in question had already been deposited even before the assessment order i.e. 17.09.1984. Thus, it was prayed that they should be discharged and the criminal proceedings launched after five years of the alleged delayed 3 payment should be dropped. But, vide order dated 2.9.1998, the learned trial court rejected the application. Against the order dated 2.9.1998, the petitioners filed a revision petition under Section 379 Cr.P.C. However, vide order dated 29.10.1999, the learned Judge also dismissed the same. Hence, this petition before this Court. Mr. Mahesh Sharma, the learned counsel for the petitioners, has vehemently contended that during the assessment of the income for the assessment year 1983-84, it were the petitioners who had pointed out to the Income Tax Department that they had deposited Rs.7,720/- as TDS. Although they had failed to deposit the said amount for a period of twenty-five months, they had deposited the said amount on 17.9.1984. Not only they had deposited the principal amount, they had also deposited the interest thereof. Thus, according to the learned counsel, the Revenue has not suffered loss of a single penny. Notwithstanding this fact, still the revenue had filed a complaint against the petitioners and that, too, after a delay of five years. Taking benefit of Section 245(2) Cr.P.C., the petitioners had brought it to the notice of the trial court that according to the Circular dated 28.5.1980, in case the amount involved was a meager one, and in case the said amount had been deposited without 4 substantial delay, then the revenue was prevented from launching a criminal case against the defaulting assessee. According to the learned counsel, despite the existence of the said Circular, the learned trial court has ignored the said circular and has erred in dismissing the application under Section 245(2) Cr.P.C. Moreover, the learned Judge has failed to notice the error committed by the trial court, and has upheld the order dated 2.9.1998 erroneously. On the other hand, Mr. J.K. Singhi, the learned counsel for the Revenue Department, has contended that Section 200 of the Income Tax Act, 1961 lays down the consequences for failure to deduct or to pay the amount. Moreover, the Income Tax Department does not have any other means to know that no amount has been deposited until and unless the deduction is brought to its notice by the assessee himself. Thus, the petitioners cannot claim that they had a bonafide intention when they informed the department that they had deducted the tax at source. According to the learned counsel, they were duty bound to reveal this information to the Department. Moreover, since the amount was not deposited within a reasonable time, the Circular dated 28.5.1980 is inapplicable. Thus, the trial court was justified in holding that the benefit of said Circular cannot be given to the petitioners. 5 Hence, the learned counsel has supported both the impugned orders. Heard the learned counsel for the parties and perused the impugned orders. This case needs to be appreciated within its own peculiar facts and circumstances of the case and in a holistic manner. Admittedly, the amount involved is merely Rs.7,720/-, which was deducted and which the petitioners failed to deposit even after a delay of twenty-five months. Yet, admittedly, not only did they deposit the said amount, but also deposited the interest thereupon. The interest and the principal amount had been deposited within a period of twenty-five months. Thus, the Revenue has not suffered any loss. Moreover, the Circular dated 28.5.1980 had been issued for certain reasons. In order to reduce the number of prosecution cases, in order to save the expenditure for fighting a case, the Government, in its wisdom, had decided that in case the amount is a meager one, and in case the amount had been deposited within a substantial period, the Revenue Department should not launch a prosecution against the assessee. Thus, the said circular was beneficial in its nature. Moreover, the circular has also recognized the fact that a 6 prosecution should not tantamount to a persecution of an assessee, considering the fact that meager amount was being involved. In the present case, admittedly, the prosecution was not launched immediately, but after a lapse of five years. Thus, the launching of the prosecution also tantamounts to a persecution. Afterall, the launching of the prosecution has lost its teeth and is no longer deterrent in nature. Considering the fact that the petitioners had eventually deposited the amount along with the interest, considering the fact that the prosecution was launched after a lapse of five years, the learned trial court should have granted the benefit of Circular dated 28.5.2980. Hence, the learned trial court was not justified in observing that the benefit of the said circular cannot be extended to the petitioners. In this view of the matter, this petition is, hereby, allowed and this Court is inclined to quash and set aside the orders dated 29.10.1999 and dated 2.9.1998 and to quash and set aside the criminal proceeding pending before the Special Judicial Magistrate (Economic Offences), Jaipur in the form of Criminal Case No.155/1989. (R.S. CHAUHAN) J. Manoj solanki