1 aba365.11.odt IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH AT NAGPUR CRIMINAL APPLICATION (ABA) NO.365 OF 2011 (DURGAPRASAD MADANLAL SARDA & MUKUND D. SARDA //VS// STATE OF MAH. THR. PSO P.S. SADAR, NAGPUR) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Office Notes, Office Memoranda of Coram, Court's or Judge's orders appearances, Court's orders of directions and Registrar's orders - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Mr.M.G.Bhangde, Sr. Advocate with Mr. V.V.Bhangde, Advocate for Applicants. Mr.S.S.Doifode, A.P.P. for Respondent/State. CORAM : M.N.GILANI, J. DATED : DECEMBER 19, 2011. 1. Applicants 1 and 2, who are implicated as accused 1 and 2 in Crime No.263 of 2011, registered with Police Station, Sadar – Crime Branch, Nagpur for the offences punishable under Sections 16(8), 74(1)(a)(c)(e), 74(2), 74(3)(b) of the Maharashtra Value Added Tax Act, 2002 and Sections 420, 463, 464, 465, 468, 471, 474, 109, 110, 111, 120 read with 34 of the Indian Penal Code. 2. Deputy Commissioner of Sales Tax (Investigation), Nagpur lodged first information report alleging commission of offence under the Maharashtra Value Added Tax Act, 2002 (“MVAT Act” for short) and under various sections of the Indian Penal Code against accused 1 and 2. Two firms viz. M/s. Ajay Trade Links, Mankapur, Nagpur and M/s. S.N. Coals and Coke, Jaihind Nagar, Mankapur, Nagpur are the proprietary concerns. M/s. Ajay Trade Links, Mankapur, proprietor- Ajay Yadav and M/s. S.N. Coals & Coke, Jaihind Nagar, Mankapur – Proprietor Ramesh Yadav are registered with Sales Tax Department and they are provided with VAT Numbers under the MVAT Act. Both these concerns are dealing with purchase and sale of coal on large 2 aba365.11.odt scale. Officers of the Sales Tax Department noticed that while applying for VAT number false information and fake documents were submitted. On inquiry it was noticed that Ravi Ramasharey Yadav proprietor of M/s.S.N. Coals & Coke was working as peon with the accused persons and used to wash their cars on paltry sum. Ajay Ramnaresh Yadav, proprietor of M/s.Ajay Trade Links, cousin of Ravi Yadav, is studied up to 8th standard and is working as Security Guard on monthly salary of Rs.five thousand. Taking undue advantage of their poverty the accused opened bank accounts in their names obtained pan cards and also obtained VAT numbers. During last three financial years turnover of these two concerns was approximately 266 crores. Despite this they had applied for cancellation of registration which resulted in officers suspecting foul play and carrying out inquiry. It was noticed that the entire business was being done by the accused 1 and 2 and not by Ajay Yadav and Ravi Yadav. It was found that Ajay Yadav had opened account in the Federal Bank Limited and person who introduced him was Ravi Yadav, Proprietor of M/s. S.N. Coals & Coke. During the period from 2006 to 2011 an amount of about Rs.eleven crore and odd was withdrawn. The bank account of Ravi Yadav was opened in Indian Industrial Bank, Ramdaspeth Nagpur in the year 2005. Accused 1 signed as witness and accused 2 was appointed as authorized signatory for looking after the bank account. While opening the account an amount of Rs.four crore eighty lac and ninety five thousand was deposited and on the same day it was transferred to Punjab National Bank. M/s. S.N. Coals made dealings with one M/s. Permanent Fincon Private Limited. Audit reports of M/s. Ajay Trade Links, M/s. S.N. Coals and M/s. Permanent Fincon Pvt. Ltd. were signed by accused 1 in 3 aba365.11.odt the capacity of Official Auditor. During the investigation it was noticed that the several bank cheque books bearing signatures of Ravi Yadav, blank bill books, inter-immediate bills bearing names of Ajay Trade Links and S.N. Coal were found in possession of the accused 1. The tax returns of these two concerns showed the net return in crores of rupees. These returns were found in possession of accused 1. When all these documents were cross-checked with Ravi Yadav and Ajay Yadav they showed ignorance. 3. Mr. Bhangde, learned Senior Advocate appearing for the applicants contended that offences punishable under Sections 420, 463, 464, 465, 468, 471, 474, 109, 110, 111, 120 read with 34 of the Indian Penal Code are not at all made out. As regards offence under the MVAT Act all are bailable. It is, therefore, vehemently contended that the prosecution has miserably failed to demonstrate any loss caused to the Government exchequer. Assessment of the liability under the MVAT Act is yet to be determined. There is a procedure of determining the liability under the MVAT Act which should have been undertaken before lodging the first information report. The approach of the Sales Tax Department in straightway approaching the police by ignoring the requirement of assessing the tax liability is totally erroneous and unwarranted, he urged. 4. Reliance is placed on the decision of Hon'ble Supreme Court in Siddharam S. Mhetre Vs. State of Maharashtra, reported in 2011(1) Bom. C.R. (Cri.) 293, the Supreme Court, while dealing with anticipatory bail has laid down some parameters : “v.Where the accusations have been made only with the object of injuring or humiliating the applicant by arresting him or her. 4 aba365.11.odt vi. Impact of grant of anticipatory bail particularly in cases of large magnitude affecting a very large number of people. vii. The courts must evaluate the entire available material against the accused very carefully. .... viii. While considering the prayer for grant of anticipatory bail, a balance has to be struck between two factors namely, no prejudice should be caused to the free, fair and full investigation and there should be prevention of harassment, humiliation and unjustified detention of the accused; ix. The Court to consider reasonable apprehension of tampering of the witness. …. x. Frivolity in prosecution should always be considered …..” 5. Mr. Bhangde, learned Senior Advocate invited my attention to the order passed by learned Additional Sessions Judge granting anticipatory bail to Ravi and Ajay Yadav. His contention is that, all accused being similarly placed and have been charged with the aid of Section 34 the present applicants are entitled to the same relief on the ground of parity. To substantiate his contentions the learned Senior Advocate relied on decisions of the Supreme Court in Kamaljit Singh Vs. State of Punjab, reported in (2005) 7 SCC 226, Sukhram v. State of M.P. reported in AIR 1989 SC 772, Madan Pal Vs. State of Haryana, reported in (2004) 13 SCC 508. 6. I do not concede to this submission. It is not correct to say that the present applicants are similarly situated with Ravi and Ajay Yadav, although all have been charged with the aid of Section 34 of the Indian Penal Code. There is a reason to believe that Ravi Yadav and Ajay Yadav are merely pawns who have been used to conduct trade of large magnitude. Therefore, the learned Additional Sessions 5 aba365.11.odt Judge was right in distinguishing the case of the present applicants from the case of accused Ravi Yadav and Ajay Yadav. 7. In order to deal with the point canvassed by the learned senior counsel that the ingredients of Section 420 are not attracted, reference can usefully be made to the Law of Crimes by Ratanlal & Dhirajlal, 26th edition, revised by Justice C.K. Thakker, (Volume-II, Page-2435). The learned author by quoting judgment of the Hon'ble Supreme Court observed that : “.... The Supreme Court has held that the word 'property' in this section does not necessarily mean that the thing, of which a delivery is dishonestly desired by the person who cheats, must have a money value or a market value, in the hand of the person, cheated, but becomes a thing of value, in the hand of the person, who may get possession of it, as a result of the cheating practised by him, it would fall within the connotation of the term 'property' in this section. The order of assessment issued by the Income-tax Officer and received by the assessee is 'property', since it is of great importance, to an assessee, as containing a computation, of his total assessable income and, as a determination, of his tax liability. ….” At page 2439 the learned author cited another example. It was a case of person supplying false information to the Inspector of Schools to obtain certificate of passing examination in a certain year when another person of the same name had passed. It was held that he had acted fraudulently within the meaning of Section 415 and was guilty of the offence punishable under Section 420. 8. The learned Additional Public Prosecutor submitted that petition, filed before this Court for quashing of 6 aba365.11.odt FIR, has been rejected. 9. Prima-facie, there is a material to show that two persons Ravi Ramashrey Yadav and Ajay Ramnaresh Yadav living in hand to mouth condition and acquainted to accused 1 and 2 were made to pose as owners of two concerns. Without explaining them the nature of the transactions, their signatures were obtained on various documents. The Sales Tax Department was made to believe that they are persons who were applying for VAT number. In a subsequent dealings it was represented to the various departments i.e. Sales Tax Department and Income Tax Department that they are the persons who are proprietors of the two concerns viz. M/s. Ajay Trade Links and M/s. S.N. Coals & Coke and the transactions in the sum of more than Rs.two hundred and sixty six crore were carried out during the spell of three years. It was further revealed that there were raids conducted by Income Tax Department and at that time also these two persons had disclosed their true status. 10. It is the case of prosecution that huge transactions carried out during the last three years in the name of these two persons are required to be probed. This is not possible without custodial interrogation. The returns submitted to the Sales Tax Department from time to time are required to be cross-checked with the income tax returns and also with the corresponding returns filed by those firms with whom these two firms had made transactions. It was noticed that there was withdrawal of a huge amount not by Ajay Yadav or Ravi Yadav but allegedly by the accused. It is necessary to find out the real connections with all these coal companies and real source of purchase and sales and to trace out actual transaction of the property from one dealer to another. It is also necessary to interrogate about the actual movement of 7 aba365.11.odt goods on the basis of which taxes were either collected or set off / input tax credit was made in the return. 11. I find force in the contention of the learned Additional Public Prosecutor that this is not merely a case of evasion of taxes, which is to be normally dealt with under the provisions of the Tax Laws. Creating benami firms, opening bank accounts, operating the same in the name of the persons who had no knowledge of the same and carrying out the transactions in crores in their names, obtaining registration under VAT Act by representing that they are persons who are proprietors of the firms, filing tax returns under the VAT and Sales Tax Act and other Tax Laws, appropriating profit by the third persons i.e. accused instead of by the persons who on papers are shown as receivers of the profit etc. are the activities which fall beyond term 'evasion of tax'. For all these reasons and considering the seriousness of the charges and its large magnitude affecting public exchequer the application is liable to be rejected. The application is rejected. 12. At this stage, learned counsel for the applicants prays for continuing interim order dated 13.10.2011 for further period of four weeks. Interim order to continue for a period of two weeks from today. JUDGE RR..