L and T Limited vs The Assistant Commercial Tax Officer, Commercial Taxes Department

C.S. Karnan, J.—The petitioner has filed the above Criminal Original Petition to call for the records in C.C. No. 79 of 2007 on the file of

Judicial Magistrate No. II, Karaikal and quash the same.

The respondent/complainant/ Prosecution''s case was that the complainant filed the complaint against the four accused persons u/s 190(1)(a) of

Cr.P.C., 1973, and under Sections 10(a) and 10(e) of the Central Sales Tax Act, 1956 read with Section 34 of IPC and Sections 409 and 477 of

IPC read with Section 34 of IPC. The complainant''s allegation is that the officers of the complainant department inspected the principal place of

business of M/s Lakshmi Polythene, Karaikal on 13.09.2003 in exercise of the powers conferred u/s 45 of the Act of 1967 read with Rule 7 of

the Central Sales Tax (Pondicherry) Rules 1967 for the reasons to suspect that M/s Lakshmi Polythene, Karaikal is attempting to evade payment

of tax due to the complainant department.

Thiru. G. Govindaraj, Sole Proprietor of M/s Lakshmi Polythene, Karaikal gave a statement before the officers of this department on

13.09.2003 that he had engaged the Accused No. 1 as in his Accountant and authorised the Accused No. 1 to represent for and on behalf of his

business before the statutory authorities of the complainant department. It is the case of Thiru. G. Govindaraj that the Accused No. 1 while

working as an Accountant of his business initially gave 10 declaration Form-C bearing distinct No. PY/C No. 906001 to 906010 and received

back seven leaves of ''C'' Form bearing No. 906004 to 906010 for renewal and never received back the declaration forms bearing distinct No.

PY/C No. 906011 to 906025 from the Accused No. 1. The statement dated 13.09.2003 given by Thiru. G. Govindaraj, the sole proprietor of

M/s Lakshmi Polythene, Karaikal is shown as Document No. 3.

The complainant department after conducting through investigation lodged a complaint before the Honourable Court for misuse of the Form-C

bearing distinct No. PY/C 906018 and PY/C No. 906023 and this Honourable Court had taken cognizance of the complaint in the case No.

STR. 865/2004 and STR.1402/2005 respectively. The complainant department has been continuously investigating the misuse of other declaration

forms, which were issued to M/s Lakshmi Polythene, Karaikal to unearth the revenue loss to the coffer. In the meantime, the Accused No. 2

addressed a letter dated nil to the Commercial Tax Officer, Karaikal enclosing a photo copy of the C form No. PY/C No. 906020 requesting to

provide another C Form as he came to know that the declaration Form No. PY/C No. 906020 that he received from Accused No. 1 is a

defective one. The letter addressed by Accused No. 2 is shown as Document No. 4.

Based on the aforesaid letter received from Accused No. 2, at first instance the Accused No. 2 was examined by the officers of the complainant

department on 22.08.2006. During the course of examination, the Accused No. 2 who is a registered dealer made a confession statement that he

had unlawfully received the declaration Form C bearing No. PY/C No. 906020 from the Accused No. 1 instead of lawfully obtaining such Form

C declarations for his business from the registering authority of Karaikal who is authorised to issue the declaration Form C to the registered dealers

in Karaikal region. The Officers of the complainant department specifically questioned about the business relation of the Accused No. 2 with

Thiru.G.Govindaraj, Sole Proprietor of M/s Lakshmi Polythene, Karaikal. To this pointed question the Accused No. 2 replied negatively that he

had no business relations with Thiru.G.Govindaraj. However the accused No. 2 made it clear that while receiving the declaration Form C bearing

distinct No. PY/C No. 906020, it had all the office seal of the Office of the Commercial Tax Officer, Karaikal and the seal containing the business

name of Accused No. 2. The Accused No. 2 further stated that the seal containing his business name was not his usual seat, it might have been

prepared by the Accused No. 1. The statement given by the Accused No. 2 is shown as Document No. 5.

Based on the information received during the course of examination of Accused No. 2 on 22.08.2006, the complainant department came to

know that the Accused No. 2 who received the declaration Form C being distinct No. PY/C No. 906020 from the Accused No. 1, in turn

handed over the same to Thiru.Anil Kumar, Sales Officer of the Accused No. 3 towards purchase of cement to the extent of Rs. 10,06,476.89/-.

The complainant department to further probe in to the matter issued a notice to Larsen & Toubro Limited, to produce the declaration form in

question by issue of notice/summons. A copy of the notice/summons is shown as Document No. 6.

In response to the notice/summons shown as Document No. 6 M/s. Larsen & Toubro Limited, informed vide their letter dated 07.09.2006 that

they have not received the declaration form in question. Reply given by M/s. Larsen & Toubro is shown as Document No. 7.

Challenging the complaint, the petitioner/3rd accused has prayed for quashing of the complaint in C.C. No. 79 of 2007 on the file of Judicial

Magistrate- II, Karaikal on the following grounds. The petitioner most humbly submits that the complainant as against this petitioner is not valid in

law in as much as this provision of law invoked by the respondent is not applicable to the petitioner. The Penal Section reads as follows:

Section 10 - Penalties - if any person

(e). has in his possession any form prescribed for the purpose of Sub-section (4) [or Sub-section (8)] of Section 8 which has not been obtained by

him or by his principle or by his agent in accordance with the provisions of this act or any rules thereunder.

Rule 12(6) - Form C refereed to in Sub-rule (1) or as the case may be, Form F referred to Sub-rule (5), shall be the one obtained by the

purchasing dealer or as the case may be, the transferee in the state in which the goods covered by such form are delivered.

The petitioner was a seller and the second accused was the dealer. The relationship is that of one principle to another principle. Further, it is

the duty of the dealer to obtain the C Form. The seller has no role to play in the process. The law does not envisage any steps, or measure or cast

any duty on the seller, to follow while receiving a C Form. It will also be humanly impossible for every seller to personally verify if every C Form

that he receives is genuine. The seller having transacted with the dealer, goes on his action and banafide while receiving the C Form. Further, the

Section 10(e) of the Central Sales Tax Act deals with the liability of the dealer and has no mention of the seller. Thus, the petitioner being a seller

submits that from the above, it is clear that the petitioner can not be liable in any manner for the alleged criminal offence and therefore the complaint

is to be quashed on this ground.

The petitioner submits that it has been stated in the complaint ""Accused No. 1, in turn handed over the same to Thiru.Anil Kumar, Sales

Officer of the Accused No. 3 towards purchase of cement to the extent of Rs. 10,06,476.89/-"". In other words the third accused acquired the

form only for the consignment of cement sent by them. They are by law entitled to the C form and exemption thereupon. There is no malafide in

their side of the transaction.

From the contents of the complaint and the contents of the petition, and the arguments advanced by the Learned Counsel for the petitioner and

Learned Counsel for the respondent, the Court is of the view that the respondent filed the complaint, along with 10 documents to establish his case

and mentioned 5 witnesses. Further, in the said case, it is alleged that the accused is attempting to evade a huge amount of Tax payable to

Government. This can only be determined by way of adjudication after hearing both sides and on the basis of perusal of documents. So, the case

cannot be quashed in the present stage. Therefore, the Criminal Original Petition No. 24135 of 2007 is dismissed. Consequently, the connected

Miscellaneous Petition is closed.