Rajvir Singh and Others vs State of Rajasthan

M. Kapoor, J.—For the year 1982-83, the petitioners submitted their Income Tax return late by two years and two months. This return was submitted after they had received a notice from the Income Tax Officer. However, the tax was assessed, appeals were preferred and tax due has been deposited in instalments, the last instalment having been deposited in February, 1988. In March, 1988, a complaint u/s 276CC read with Section 278B of the Income Tax Act, 1961, was made before the Chief Judicial Magistrate (Economic Offences), Jaipur, and on this complaint, the learned Chief Judicial Magistrate directed that non-bailable warrants be issued for the production of the petitioners. The petitioners preferred an application u/s 438, Criminal Procedure Code, before the Sessions Judge, Jaipur City, Jaipur, and he directed that the petitioners should appear before the Chief Judicial Magistrate (Economic Offences), Jaipur, and apply for grant of bail and prior notice be given to the Income Tax Department as to when they were appearing before that court and till such surrender the non-bailable warrants shall not be executed.

In pursuance of this, the petitioners did not appear before the trial court but they have moved this court u/s 438, Criminal Procedure Code.

Learned counsel for the petitioners has contended that this is a case where the Income Tax which was due has been deposited in full and now the offence, if any, is of a technical nature and there is no likelihood of the petitioners not facing the trial. It is also contended that the reasons for late filing the return were submitted before the Income Tax authorities and there was no mala fide intention on their part. It is contended that the issue of non-bailable warrants in such a case is harassment of the petitioners and the same should be prevented. A number of decisions of this court have been cited in which anticipatory bail was granted in similar situations or the non-bailable warrants issued by the trial court were converted into bailable warrants with directions to the petitioners to appear before the court.

Learned counsel for the Department has placed reliance on a few decisions of this court, namely, S. B. Criminal Miscellaneous Petition No. 537 of 1985, Income Tax Officer Vs. Gopal Dhamani and Laxmi Narain Dhamani, decided on January 7, 1987, wherein it was observed that in serious economic and anti-social white collar crimes, the rule should be jail and not bail.

Another case relied upon is S. B. Criminal Miscellaneous Bail Application No. 1416 of 1987, J.P. Singh Vs. Inspecting Assistant Commissioner of Income Tax, decided on June 13, 1988, wherein it was held that anticipatory bail can be granted in cases involving economic offences and the non-bailable warrants issued by the Chief Judicial Magistrate were converted into bailable warrants and the accused persons were directed to appear before the Chief Judicial Magistrate (Economic Offences) and move an application u/s 437, Criminal Procedure Code. A direction was also issued that the Magistrate should decide the application forthwith. On my query as to why non-bailable warrants are issued in the first instance, learned counsel for the Department submitted that when once bailable warrants are issued, then the Sessions Judge while disposing of the application considers this fact and grants bail simply for the reason that bailable warrants were issued in the first instance. This appears to be a very strange reason for issue of non-bailable warrants in the very first instance in all cases which come up before the Chief Judicial Magistrate (Economic Offences). This aspect of the matter has been considered in the case of Income Tax Officer Vs. Gopal Dhamani and Laxmi Narain Dhamani, referred to above, and it has been observed that issuance of bailable warrants cannot simpliciter provide guarantee of bail in non-bailable cases. It has also been considered in this and other cases that bail can be refused even in bailable cases, provided the circumstances for doing so exist. The guiding factor for grant or refusal of bail is not the issue of bailable or non-bailable warrants in the first instance, but would be the facts and circumstances of the case to be considered in the light of Sections 437 and 438, Criminal Procedure Code. The question of issue of process is to be considered by the Magistrate in accordance with Section 204, Criminal Procedure Code, which provides for issue of summons for the attendance of accused in a summons case and issue of warrants in a warrant case, in which case the Magistrate can even issue summons for causing the accused to appear before the Magistrate, if, in the circumstances, he considers it to be fit. This provision makes it clear that the Magistrate has a discretion either to issue warrants or summons in a particular case and how he should process would naturally depend upon the facts and circumstances of a particular case. There is no such thing as a general practice or firm opinion in this matter. When a Magistrate takes cognizance of an offence and finds that there is sufficient ground for proceeding, then he has to proceed in accordance with law and exercise discretion according to sound judicial principles.

Filing of a return late is an economic offence and it can be said that economic offences are on the increase every day, but in my opinion a general principle cannot be laid down that in all cases involving commission of economic offences anticipatory bail is to be refused. As seen above, what is to be seen is whether in the facts and circumstances of the case, anticipatory bail should be granted or not. At the same time, it may also be considered whether the court should grant anticipatory bail or convert the non-bailable warrants issued by the learned Chief Judicial Magistrate into bailable warrants. The relevant factors for deciding the bail application in cases of this type would be the deposit or non-deposit of tax as assessed, whether returns before and after submission of the delayed return were submitted within time, what is the extent of the amount, due, the likelihood of the petitioners absconding and other similar matters.

In the case of J.P. Singh Vs. Inspecting Assistant Commissioner of Income Tax, referred to above, the amount of tax due was over three and half lakhs rupees and the court considered it proper to convert the non-bailable warrants into bailable warrants. The situation in the present case is that the tax due was to the tune of Rs. 50,000 and the amount due along with penalty had been deposited at the time when the complaint had been filed. This circumstance is favourable to the petitioners on account of which discretion can be exercised in favour of granting anticipatory bail to them.

The non-bailable warrants shall stand cancelled if the petitioners appear before the trial court within 15 days from today, In case they do not appear, the warrants shall be executed. In the event of the appearance of the petitioners before the Chief Judicial Magistrate (Economic Offences), Jaipur, they shall be released on bail provided each of them furnishes a bond in the sum of Rs. 10,000 with two sureties in the amount of Rs. 50,000 each to the satisfaction of the Chief Judicial Magistrate (Economic Offences), Jaipur, for their appearance during the course of trial on all dates of hearing and as and when they are called upon to do so, on the following conditions :

(1) that the petitioners shall make themselves available for interrogation by a police officer as and when required ;

(2) that the petitioner shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the court or to any police officer ;

(3) that the petitioners shall not leave India without the previous permission of the court.