IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN FRIDAY, THE 22ND FEBRUARY, 2008 / 3RD PHALGUNA 1929 Crl.MC.No. 3010 of 2003 ------------------------------ (Against Crime No.59 of 2003 of the Thalassery Police Station) PETITIONER: (FIRST ACCUSED): --------------------------------------- T.KUNHI MOOSA, PROPRIETOR, PONDICHERY SPICES, CHALAKKARA, MAHE. BY ADV. SRI.T.M.ABDUL LATHEEF RESPONDENTS: (STATE & COMPLAINANT): ---------------------------------------------------- 1. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. 2. SALES TAX INSPECTOR, SALES TAX CHECK POST, NEW MAHE, KANNUR DIST. BY PUBLIC PROSECUTOR SRI.C.M.KAMMAPPU. THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 14/02/2008, THE COURT ON 22/02/2008 PASSED THE FOLLOWING: V.K.MOHANAN, J. --------------------------------------------- Crl.M.C.No. 3010 of 2003 --------------------------------------------- Dated this the 22nd day of February, 2008 O R D E R The petitioner, who is the first accused in Crime No.59 of 2003 of the Thalassery Police Station, preferred this Crl.M.C. with a prayer to quash all proceedings in the above crime in which the offence alleged is under Section 420 of the Indian Penal Code (hereinafter referred to only for short as 'the I.P.C.'). According to the petitioner, no offence under Section 420 of the I.P.C. is attracted against him even if the entire prosecution case is admitted as true and therefore, the very registration of the above crime and all proceedings thereon are really abuse of process of law. 2. The allegation against the petitioner is that on 25.1.2003, the departmental officers had intercepted Lorry No.KL-11 E-9759 at about 23.15 Hrs. at New Mahe and found that the vehicle carries invoice raised in the name of Pondicherry Spices, Chalakkara, for the sale of 90 bags of pepper amounting to Rs.1,80,000/- vide invoice Crl.M.C.NO. 3010 of 2003 :-2-: Nos.32 & 33 to Delhi. Besides the invoice, the driver carries Form 27C Transit Pass for getting Transit Pass, declaration in 27 B etc. According to the prosecution, on physical verification of the goods under transport in the lorry, it is noted that, it carries 63 bags of unsaleable pepper waste and even not a single bag 'bold pepper' is seen transporting in the lorry. Thus, on interrogation of the driver, cleaner and the headload worker available in the lorry, it came out that 63 bags, containing waste pepper, are loaded from a house nearer to Mahe- Thalassery road and the vehicle was then taken to Chalakkara area and from there, the writer gave invoice to the driver to be produced before the Check Post Official for getting Transit Pass etc. It is also revealed through interrogation that directions were given to the driver that on getting Transit Pass from Check Post Officials, the lorry is to be taken to Iritty from where the waste pepper loaded in the lorry are to be replaced by bold pepper for onward transport to outside Kerala on the strength of Mahe Invoice along with Transit Pass Crl.M.C.NO. 3010 of 2003 :-3-: obtained from the Check Post Officials. Later, the vehicle along with the goods was taken custody by the Check Post officials for further action. 3. According to the prosecution, the above instance clearly shows the modus operandi practised by the petitioner in smuggling pepper for evading payment of tax. It is the case of the prosecution that the petitioner/accused procured pepper, supari etc. from pepper and supari cultivated areas like Iritty, Irikkur, Sreekandapuram, Kanhangad, Kasaragod etc. and stored in some undisclosed go downs there. Further, the allegation is that, at the very same time, in Chalakkara, the vehicles were loaded with unsaleable waste pepper and such other waste goods and they were transported along with invoices raised by Pondicherry Spices, Chalakkara and on reaching the Check Post on producing the Mahe invoice, fraudulently obtain Transit Pass and on getting Transit Pass, the vehicle with waste pepper was driven to place where bold pepper is stored and Crl.M.C.NO. 3010 of 2003 :-4-: replaced the pepper waste with bold pepper for onward transport to outside Kerala, through border check post. It is the definite case of the prosecution that by adopting this mode of operation, the petitioner had transported more than 1564 bags of pepper and 80 bags of Supari procured from Kannur and Kasaragod area and evaded payment of tax which are legitimately payable for the Government, by fraudulently obtaining Transit Pass on the strength of Mahe invoice. Therefore, according to the prosecution, the petitioner along with others committed the offence punishable under Section 420 read with Section 34 of the I.P.C. Based upon the First Information Statement given by one C.G.Mathew, Sales Tax Inspector, Sales Tax Checkpost, New Mahe before the Sub Inspector of Police, Thalassery Police Station, Crime No.59 of 2003 has been registered for the above offences implicating the petitioner as first accused and there are altogether four accused in the petition. Crl.M.C.NO. 3010 of 2003 :-5-: 4. The petitioner approached this Court when the investigation was in the infant stage. It appears that the above Crl.M.C. dated 9.4.2003 was moved before this Court on 11.4.2003 and thereafter, the matter was being adjourned continuously and no stay was granted although Crl.M.P.No.3684 of 2003 was filed for staying all further proceedings in Crime No.59 of 2003 including the laying of final report after investigation. By order dated 31.3.2006, this Court had made clear that it is open to the Police to proceed with the investigation of the case. Thus, the investigation in the above case is already over and a final report has already been filed before the court below and accordingly, C.C.No.417 of 2004 is instituted. It is the above case and proceedings are being sought to be quashed. 5. The main contention raised in this case is that no offence under Section 420 of the I.P.C. is disclosed against the petitioner, even if the entire allegation is admitted as true. According to the petitioner, there is no tax evasion and he had not deprived of any property Crl.M.C.NO. 3010 of 2003 :-6-: of the Government and unless and until there is specific property which was transported without paying tax, Section 420 will not be attracted. It is also contended that the liability comes only when there is a proper adjudication by the assessing authority and even in that case, if the finding is against the assessee, the matter can be taken in appeal and therefore, according to the petitioner, Section 420 will not come into play. Therefore, according to the petitioner, the registration of crime against the petitioner for the offence under Section 420 is unjust and illegal. Along with Crl.M.C., the petitioner has produced Annexure-A1 which is a copy of the explanation submitted by the petitioner to a notice issued by the Sales Tax Authority. Another document is Annexure A-2 which is a copy of the assessment proceedings initiated against the petitioner by the Assistant Commissioner (Assessment), Commercial Taxes, Special Circle, Kannur. On the strength of the above document, the contention of the petitioner is that even according to the Department, the Crl.M.C.NO. 3010 of 2003 :-7-: only allegation against him is infringement of certain statutory provisions for which concerned authority has already initiated statutory proceedings. By producing Annexure A3 document, which is an order by the Session's Court, Thalassery in Crl.M.C.No.269 of 2003 by which anticipatory bail was granted in favour of him and in the above order, it is submitted that the Session's Court has observed that the case diary shows that the investigation is in progress and so far, they could not ascertain whether the criminal prosecution will lie in respect of the evasion of tax. Thus, based upon the above document, the petitioner submitted that at any rate, no offence under Section 420 of the I.P.C. will lie against the petitioner and therefore, prayed for quashing the entire proceedings. 6. I have heard Mr.Abdul Latiff, learned counsel appearing for the petitioner as well as the learned Public Prosecutor. 7. Learned counsel for the petitioner submits that even if the entire allegation is admitted as true, no Crl.M.C.NO. 3010 of 2003 :-8-: offence under Section 420 of I.P.C. will attract against the petitioner. According to counsel, no goods have been seized from the vehicle which was subjected for inspection on the date of occurrence and therefore, even the prosecution has no case that the petitioner has tried to transport goods without paying the tax due to the Government and the petitioner has tried to evade from paying the tax. The learned counsel strenuously argued that by the alleged incident, the petitioner has not caused any loss to the Government. In the absence of any such allegation, no offence under Section 420 of the I.P.C. will lie against the petitioner. The learned counsel took me through Section 415 which reads as follows:- “415. Cheating.-- Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property Crl.M.C.NO. 3010 of 2003 :-9-: is said to “cheat”. Explanation.--A dishonest concealment of facts is a deception within the meaning of this section.” According to counsel for the petitioner, unless it is specifically alleged or pleaded that the petitioner has obtained a Transit Pass, and by using such Transit Pass, the petitioner had transported goods without paying tax, no offence under Section 420 will lie against the petitioner. The counsel for the petitioner has also invited my attention to the ingredients of Sections 415 and 420 of the I.P.C. in support of the above contention. 8. The learned counsel for the petitioner cited a decision of the Apex Court reported in Hari Sao v. State of Bihar (AIR 1970 SC 843) in support of the above contention. In the above decision, the Apex Court had held that the false representation made by the appellants in obtaining the railway receipt in the form in which it was issued did not cast any additional liability on the railway and the issue of the railway receipt therefore was not likely to cause any damage or harm to Crl.M.C.NO. 3010 of 2003 :-10-: the railway. It was also held that no question of cheating the railway or the Station Master therefore arose in the above case. 9. On the strength of the above decision, the counsel for the petitioner submits that in the present case, even according to the prosecution, the case is that there is only an attempt from the part of the petitioner for the evasion of tax even at the time of producing the declaration for obtaining the Transit Pass. If that be so, therefore, the ingredients of Sections 415 or 420 have not so far been disclosed and hence all proceedings initiated against the petitioner are clear abuse of process of law. 10. In this juncture, it is relevant to note that Annexure A-4 is the F.I.R. in Crime No.59/03 of Thalassery Police Station. Along with Annexure A-4 F.I.R., the petitioner has produced the seizure Mahazar. Besides the above document along with Crl.M.C., the petitioner has also produced Annexure A2 which is a copy of the assessment order wherein after giving the Crl.M.C.NO. 3010 of 2003 :-11-: brief allegation against the petitioner, the authority has provisionally shown the proposed assessment against the petitioner for the period from April, 2002 to January, 2003 and thus the total taxable turn over proposed is fixed as Rs.70 lakhs. In Annexures A2 document as well as A4 F.I.R., the allegation is to the effect that in Chalakkara, the vehicles were loaded with unsaleable pepper waste and such waste goods and transported the same along with invoices raised by the Pondicherry Spices, Chalakkara and on reaching the Check Post and on producing the Mahe Invoice, fraudulently obtain Transit Pass and on getting Transit Pass, waste pepper were driven to places where bold pepper is stored and replaced the pepper waste with bold pepper for onward transport to outside Kerala through Border Check Post. It is also clear from the above words which runs “through this modus operandi, he had transported more than 1564 bags of Pepper and 80 bags of Supari procured from Kannur and Kasaragod area and evaded payment of tax legitimately due to Government by Crl.M.C.NO. 3010 of 2003 :-12-: fraudulently obtaining transit pass on the strength of Mahe invoice.” In the present case, it is the stand of the prosecution that when the petitioner with the vehicle approached the Check Post, the vehicle was intercepted on the basis of Intelligence Report even before obtaining the Transit Pass. So the prosecution is specific that even before obtaining the Transit Pass, they intercepted. If that be so, it cannot be said that any of the ingredients of Section 415 or 420 of I.P.C. is attracted. Of course, there may be violation of other statutory provisions for which the concerned authority has already initiated proceedings as evidenced by the documents produced by the petitioners. That does not mean that on the basis of the present set of averments, an offence under Section 420 is disclosed. It appears that the date of occurrence as alleged is 25.1.2003 and thereafter, more than five years are over and so far, there is no progress in the trial and especially in the absence of sufficient factual averments and allegations so as to constitute the offence under Section 420 of I.P.C., there is no meaning in Crl.M.C.NO. 3010 of 2003 :-13-: directing the petitioner to undergo the ordeal of trial, especially in a case where there is no scope for conviction. Therefore, I am of the view that the registration of the crime and all further proceedings thereon including the investigation and the subsequent institution of Calendar Case in Crime No.59 of 2003 of Thalassery Police Station is a clear abuse of process of court and for the ends of justice, it is absolutely inevitable to quash all the proceedings thereon. 11. In the result, this Crl.M.C. is allowed quashing Annexure A4 F.I.R. and the final report and C.C.No.417 of 2004 instituted thereon and pending in the Court of the Judicial First Class Magistrate's court, Thalassery. V.K.Mohanan, Judge Mbs/ Crl.M.C.NO. 3010 of 2003 :-14-: V.K.MOHANAN, J ---------------------------------------------------- Crl.M.C.NO. 3010 OF 2003 -------------------------------------------- O R D E R DATED: 22-2-2008 Crl.M.C.NO. 3010 of 2003 :-15-: