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J. Jayalalithaa Vs. the Assistant Commissioner of Wealth Tax - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtChennai High Court
Decided On
Case NumberCrl.O.P. No. 27245 of 2007, Crl.R.C. No. 666 of 2008 and M.P. Nos. 1 and 1 of 2008
Judge
Reported in2009CriLJ3114; (2009)222CTR(Mad)470; [2009]309ITR277(Mad); [2009]179TAXMAN212(Mad)
ActsWealth Tax Act, 1957 - Sections 2, 14, 14(1), 14(2), 15, 16, 16(2), 16(4), 16(5), 17, 17(1), 17A, 17(1A), 17(B), 30, 35, 35(B), 35O, 69, 271(1), 273A, 276C, 276CC, 277 and 279; Income Tax Act - Sections 120B, 139(1), 277 and 278E; Limitation Act, 1974; Mines Act - Sections 66; Code of Civil Procedure (CPC) - Order 23, Rule 1; Code of Criminal Procedure (CrPC) - Sections 190, 190(1), 192, 200-203, 204, 245(2), 309, 397, 397(1), 401, 482 and 483; Constitution of India - Articles 32, 226 and 227; Wealth Tax Rules - Rule 3(1); Mines Regulations - Regulation 3
AppellantJ. Jayalalithaa
RespondentThe Assistant Commissioner of Wealth Tax
Appellant AdvocateB. Sriramulu, Sr. Counsel for A. Navaneethakrishnan, Adv. in Crl.O.P. and ;Ravi Shankar Prasad, Sr. Counsel for A. Navaneethakrishnan, Adv.
Respondent AdvocateRamasamy K., Sr. Spl. P.P. for I.T. Cases
DispositionPetition dismissed
Cases Referred(Om Prakash Sharma v. C.B.I. Delhi
Excerpt:
- - since there was persistent failure in furnishing the return, in order to complete the assessment, a letter was issued on 31.07.1995 requiring the petitioner to furnish details of assets owned by her as on 31.03.1993 and also particulars of debts or liabilities as on that date. it is alleged in the complaint that the petitioner was deliberately bent upon not to file her return of wealth tax at all and may be she has willingly welcomed the exparte assessment for reasons best known to her. (v) since the complaint had been filed by the respondent who is a public servant sworn statement of the respondent was not recorded and on a perusal of the allegations contained in the complaint and on being prima facie satisfied that a case has been made out under section 35(b) of the act the.....orderk. mohan ram, j.1. since common questions arise for consideration in the above criminal original petition and in the above criminal revision case both the cases are disposed of by this common order.2. the brief facts which are necessary for the disposal of the above cases are set-out below:(i) the petitioner is the accused in e.o.c.c. no. 263 of 1997 on the file of the learned additional chief metropolitan magistrate, (economic offence-i), egmore, chennai - 8. the respondent filed a complaint for the alleged offence under section 35(b) of the wealth-tax act, 1957 (27 of 1957) (hereinafter referred to as 'the act') in respect of non-filing of the wealth tax return for the assessment year 1993-1994. the gist of the allegations are as under:(ii) the petitioner is the general secretary.....
Judgment:
ORDER

K. Mohan Ram, J.

1. Since common questions arise for consideration in the above Criminal Original Petition and in the above Criminal Revision Case both the cases are disposed of by this common order.

2. The brief facts which are necessary for the disposal of the above cases are set-out below:

(i) The petitioner is the accused in E.O.C.C. No. 263 of 1997 on the file of the learned Additional Chief Metropolitan Magistrate, (Economic Offence-I), Egmore, Chennai - 8. The respondent filed a complaint for the alleged offence under Section 35(B) of The Wealth-Tax Act, 1957 (27 of 1957) (hereinafter referred to as 'the Act') in respect of non-filing of the Wealth Tax Return for the assessment year 1993-1994. The gist of the allegations are as under:

(ii) The petitioner is the General Secretary of the political party-All India Anna Dravidar Munnetra Kazhagam (A.I.A.D.M.K.). Earlier she was a Member of Parliament (Rajya Sabha). She was also the Chief Minister of Tamil Nadu during the period 1991-1996. Prior to her entry into politics, she was a film artist. The petitioner was assessed to wealth-tax since the assessment year 1966-1967 and as such she is aware of her duties and responsibilities under the Act. For the assessment year 1993-1994, relevant to the valuation date 31.03.1993, the petitioner was in possession and ownership of various assets set out in detail in the complaint. For the assessment year 1992-1993 she filed a return of wealth on 23.11.1992 on net wealth of Rs. 5,81,94,800/- and her net wealth was assessed at Rs. 6,53,98,100/-. The wealth tax return of the petitioner for the wealth tax assessment year 1993-1994 was due to be filed on or before 31.08.1993 as required under Section 14(1) of the Act. However the petitioner did not file her return of wealth within the due date prescribed by the Statute inspite of being aware of her statutory duty. Thus the petitioner has wilfully and deliberately contravened the provisions of Section 14(1) of the Act by not furnishing her return of wealth on or before the due date prescribed by the Statute i.e., 31.08.1993 without any valid reason and thereby committed an offence under Section 35(B) of the Act.

(iii) Since the petitioner did not file the return a notice under Section 16(4) of the Act was issued on 18.01.1994 requiring the petitioner to file the return of wealth within 30 days from the date of receipt of the notice. The said notice was served on the petitioner by RPAD on 19.01.1994. Inspite of that the petitioner neither sent a reply nor filed a return. A reminder letter dated 10.02.1995 was issued and the petitioner did not respond inspite of the Statutory Notice issued under Section 16(4) of the Act. Since there was persistent failure in furnishing the return, in order to complete the assessment, a letter was issued on 31.07.1995 requiring the petitioner to furnish details of assets owned by her as on 31.03.1993 and also particulars of debts or liabilities as on that date. The case was posted on 22.08.1995 for furnishing the aforesaid information and enquiry. Repeated adjournments were sought on behalf of the petitioner but the details sought for were not furnished. Therefore the assessment was completed under Section 16(5) of the Act on 15.02.1996. The total taxable wealth was arrived at Rs. 3,17,43,100/- and the wealth tax payable was determined at Rs. 3,02,431/- and against that the petitioner filed an appeal. The Commissioner of Wealth-tax (Appeals) passed an order dated 16.06.1997 revising the assessment. Thereafter the income-tax and wealth-tax liabilities were deducted and taxable wealth was arrived at Rs. 1,34,99,600/- and the wealth tax payable was determined at Rs. 1,19,996/- and with the interest under Section 17(B) of the Act, the wealth-tax payable was determined at Rs. 1,91,993/- for the assessment year 1993-1994. A show cause notice dated 30.07.1996 was issued calling upon her to show cause as to why prosecution proceedings under Section 35(B) of the Act should not be initiated against her. In response to the show cause notice a reply dated 04.10.1996 was received from the authorised representative of the petitioner setting out the details for non-filing of the return. It is alleged in the complaint that the petitioner was deliberately bent upon not to file her return of wealth tax at all and may be she has willingly welcomed the exparte assessment for reasons best known to her. It is further alleged that by deliberately failing to file the return of wealth the petitioner has committed an offence punishable under Section 35(B) of the Act.

(iv) It is further alleged in the complaint that the complaint has been filed in pursuance of the sanction order dated 12.11.1997 passed by the Commissioner of Wealth Tax (Central II), Chennai, under Section 35(1) of the Act. The said sanction order was filed along with the complaint.

(v) Since the complaint had been filed by the respondent who is a public servant sworn statement of the respondent was not recorded and on a perusal of the allegations contained in the complaint and on being prima facie satisfied that a case has been made out under Section 35(B) of the Act the learned Magistrate took cognizance of the offence on 08.12.1997 and process was ordered to be issued.

3. The above Criminal Original Petition has been filed seeking to quash all further proceedings in E.O.C.C. No. 263 of 1997 pending on the file of the Additional Chief Metropolitan Magistrate (Economic Offence - I), Egmore, Chennai - 600 008 on the following grounds:

At the time of filing the complaint except the complaint and sanction order no other document was filed though in the complaint 11 specified documents have been mentioned and under Item 12 it is mentioned 'XII and other connected documents'. During the pendency of the complaint an application for discharge has been filed and on coming to know that none of the documents mentioned in the complaint have been filed before the Court a copy application was filed in C.A. No. 3100 of 2007 dated 23.07.2007. On the said copy application the following office note was made, namely, 'Submitted: At the time of giving the complaint list of documents mentioned in list have not been filed. Hence it is submitted necessary orders may be passed in this regard'. To the above note the Court passed an order to the following effect:

Call for the records from the complainant. Sd/-. 30.7.2007.

4. It is contended by the petitioner that cognizance has been taken only on the mere averments or recitals in the complaint without any supporting documents. It is further contended that the complaint of facts which constitutes an offence does not mean that the complaint alone and it necessarily needs the supporting documents connected with the complaint. It is further contended that the non-filing of any document along with the complaint including the sanction order could only mean that the Magistrate at the time of taking cognizance has not applied his mind nor were there sufficient materials to form any opinion so as to issue the process. The wordings of Section 190(1)(a) and Section 204 Cr.P.C., illustrate that not only the material facts but also the material particulars have to be necessarily included along with the complaint at the initiation or commencement of proceedings before the Magistrate. In fine, according to the petitioner, the petition under Section 482 Cr.P.C., has been filed on the ground that the cognizance taken by the Court on 18.12.1997 in the absence of documents being produced before the Court and merely on the basis of the recitals in the complaint is contrary to law and it is incapable of satisfying either Section 190 or Section 204 of the Cr.P.C.,

5. In the above Criminal Original Petition the respondent has filed a counter inter-alia contending as follows:

The complaint is filed for the offence under Section 35(B) of the Act for wilful failure to file the return of wealth for the assessment year 1993-1994 and such return has not been filed even up to this date and as such the offence is still continuing in view of the decision of the Apex Court reported in : [1986]157ITR330(SC) (Maya Rani Punj v CIT). The petitioner has suppressed the filing of Crl.O.P. Nos. 2759 and 5378 of 1998 before this Court which were dismissed as withdrawn by orders dated 06.03.1998 and 06.02.2001, respectively, and about the time limit fixed by this Court for disposal of the cases. The petitioner has also suppressed the orders passed in Crl.M.P. Nos. 5854 of 2001, 3907 of 2002 and 13179 of 2002 whereby the time for disposal of the case was extended periodically. Ever since the filing of the complaint the trial has not progressed because of the conduct of the petitioner. In view of the dismissal of the earlier two quash petitions the present Criminal Original Petition is not maintainable. The present contention raised in the above petition could have been raised and canvassed by the petitioner in the earlier quash petitions and the petitioner has no right to file the quash petitions repeatedly seeking the very same relief.

6. In the counter various dates on which the case stood adjourned and the reasons for such adjournments have been stated. It is stated that so far 180 hearings have taken place without examining even a single witness even though prosecution is ready with its witnesses and documents from the day one. On 19.05.2008 P.W.1 was examined in part after the petition for adjournment by the petitioner was dismissed. For the past 11 years only one witness was examined in part. It is further stated that two witnesses have already retired and they are aged more than 70 years and two other witnesses are at the verge of retirement shortly. On the aforesaid contentions the respondent is praying for dismissal of the above Criminal Original Petition.

7. Pending the above case, the petitioner filed Crl.M.P. No. 3457 of 2001 under Section 245(2) of the Cr.P.C. seeking discharge. In the discharge petition it is contended that in the complaint it is alleged that the wealth tax assessment for the year 1993-1994 was finalised exparte on 15.02.1996. The appeal was filed by the petitioner to revise the said assessment which stood allowed by the order dated 03.08.1999 made in GIR No. 701 J/93-94. As per the order made in the Revision, the Petitioner has got only deficit wealth to the extent of Rs. 24,97,939/- in short the liability of the petitioner exceeds the total assets. In such circumstances there is no need or necessity for the petitioner to file the return. The effect of the order dated 03.08.1999 relates back to the alleged cause of action to file and maintain the complaint. Since no prima facie case has been made out against the petitioner she prayed for discharge.

8. The respondent filed a counter inter-alia contending as follows:

The discharge petition is not maintainable under law. Inspite of the statutory notice issued the petitioner wilfully and deliberately failed to file the return of wealth which resulted in passing of an exparte assessment order. The Department was deprived of knowing the true and correct wealth of the petitioner/accused which she ought to have disclosed voluntarily before the statutory due date. The petitioner had net assessable wealth before the deduction of Income Tax liabilities for the years 1987 to 1993-1994 and it means that the petitioner had sufficient wealth warranting her to file the return of wealth. Had the petitioner filed her return of wealth disclosing her true and correct wealth voluntarily, which is a statutory obligation, there would not have been any deficit wealth even in the consequential order. Not disclosing the true and correct net wealth and thereby inviting an exparte assessment order and claiming Income Tax liabilities form the assessable net wealth, all have the ingredients of tax-evasion. Therefore failure to file the return of wealth is an independent offence under Section 35(B) of the Act.

9. It is further contended that against the order made in G.I.R. No. 701 J/93-9 the Department has preferred a further appeal before the Income Tax Appellate Tribunal. Hence the order passed in GIR No. 701 J/93-94 has no bearing on the offence alleged in the complaint and serious prejudice would be caused to the complainant if the impugned order is pressed into service without recording evidence as the offence alleged in the complaint is independent of the impugned order which has no bearing on the offence alleged in the complaint. Hence without recording evidence and commencement of the Trial, the discharge petition is not maintainable and the respondent prayed for dismissal of the discharge petition.

10. The petitioner raised the following additional grounds for discharge, namely:

For the year 1993-1994 no income tax was assessed so far by the Department hence wealth-tax cannot be assessed for the year 1993-1994. The amount of tax payable towards income tax has to be deducted from the Tax Payable by way of wealth-tax. At the time when the complaint was filed, appeals filed by the petitioner as well as the Department are still pending with respect to the tax payable for the year 1993-1994 and it will have a bearing and effect on the tax payable if not under the wealth-tax Act. When the tax amount in respect of the assessee under the wealth-tax Act is yet to be finalised the criminal prosecution launched is pre-mature.

11. The Learned Magistrate on a careful consideration of the contentions raised on either side and on an application of various decisions relied upon on either side rejected the contentions put forth by the petitioner and dismissed the discharge petition and being aggrieved by that the petitioner has filed the above Criminal Revision Case.

12. Heard Sri. B. Sriramulu the learned Counsel for the petitioner in the Criminal Original Petition and Mr. K. Ramasamy learned Special Public Prosecutor for the respondent.

13. Since a preliminary objection has been raised by the learned Special Public Prosecutor for IT Cases regarding the very maintainability of the above Criminal Original Petition on the ground that the petitioner has suppressed earlier filing and dismissal of Criminal Original Petition Nos. 2759 and 5378 of 1998 the maintainability of the above Criminal Original Petition has to be dealt with at the threshold.

14. As far as the above Criminal Original Petition is concerned the same has been presented even according to the petitioner, as stated in paragraph 19 of the quash petition, on the ground that the cognizance taken by the Court on 18.12.1997 without any record before the Court except the recitals in the complaint is contrary to law and is incapable of satisfying either under Section 190 or under Section 204 of Cr.P.C. It is contended in the quash petition that when a complaint containing merely the recitals without material evidence or materials has to be termed in law as an inchoate complaint which has no legal sanctity and as such the cognizance taken by the Court below is bad in law. It is further contended that any filing of the documents at the later stage cannot cure the initial defect. It is also contended that the wordings of Section 190(1)(a) and Section 204 of Cr.P.C. illustrate that not only the material facts but also the material particulars have to be necessarily included in the complaint. Therefore the learned senior Counsel for the petitioner can only canvass the aforesaid ground taken in the quash petition but not the following other grounds sought to be raised:

(i) When the assessment proceedings were not completed determining the actual wealth, prosecution could not have been launched on 08.12.1997.

(ii) Unless the net wealth exceeds Rs. 15,00,000/-, there is no necessity for the petitioner to file tax returns. Otherwise, she is bound to file tax returns.

(iii) When there is no final determination of her wealth, the question of liability does not arise.

(iv) Unless the tax liability is determined, the question of prosecution does not arise.

(v) When the matter was remitted back in the appeal and the tax liability is not determined and the order of the assessing officer is also not in existence, the learned Magistrate ought not to have taken cognizance of the offence.

(vi) Till the remedies available under the Statute are exhausted and the assessment order becomes final, the question of prosecution for liability does not arise. In this case, the very assessment order is not in existence. The learned Magistrate ought not to have taken the case on file on 08.12.1997.

(vii) When notice under Section 17 of the Act is issued, the assessee is bound to file a return and not under Section 16(4) of the Act and in this case the notice was issued only under Section 16(4) and not under Section 17 of the Act.

15. One another reason for not considering the aforesaid submissions made by the learned senior Counsel for the petitioner is that admittedly the petitioner had earlier filed Crl.O.P. No. 2759 of 1998 but the same was dismissed as withdrawn on 06.03.1998. Once-again the petitioner filed Crl.O.P. No. 5378 of 1998 for quashing the proceedings in EOCC No. 263 of 1997. In that quash petition the following grounds have been raised:

(i) The prosecution instituted on alleged contravention of Section 35(B) of the Act is pre-mature since the assessment proceedings in the case of the petitioner have not reached finality.

(ii) The order granting sanction to prosecute the petitioner is invalid as it has taken into several irrelevant and extraneous facts.

(iii) Where a complaint does not disclose the offence in the face of it or where it is vitiated by an apparent error it takes away the jurisdiction to institute proceedings then it would be proper and just to set-aside the entire proceedings as otherwise directing the petitioner to undergo the ordial of trial would be a serious abuse of law.

16. The said Crl.O.P. No. 5378 of 1998 and other connected Crl.O.Ps. were withdrawn and dismissed by a learned Judge of this Court by an order dated 06.02.2001. It will be relevant to refer to the said order dated 06.02.2001 which reads as follows:

1. The common endorsement made by the learned Counsel for the petitioner in respect of all the above Criminal Original Petition is placed on records.

1. In view of the same, all the above Criminal Original Petitions are dismissed as withdrawn. Consequently, connected Crl.M.Ps. are also dismissed. Interim stay granted in all these cases shall stand vacated.

2. It is open to the petitioner to raise whatever grounds which are open to her under law before the trial court. As the matters relate to the years 1996 to 1998, the concerned trial Judge, E.O.I, Chennai shall dispose of the cases within a period of eight months from the date of the receipt of this order without fail.

A reading of the aforesaid order makes it clear that no permission/liberty has been given to the petitioner to file a similar quash petition on the same cause of action but liberty has been given to the petitioner to raise whatever grounds which are open to her under the law before the trial court. In the light of the said order it is not open to the petitioner to raise the very same grounds in the above Criminal Original Petition once-again.

17. In this context it will be useful to refer to a decision of the Apex Court reported in : [1987]1SCR200 (Sarguja Transport Service v. S.T.A.T.). In this decision in paragraph 9 it has been observed as follows:

9. The point for consideration is whether a petitioner after withdrawing a writ petition filed by him in the High Court under . 226 of the Constitution of India without the permission to institute a fresh petition can file a fresh writ petition in the High Court under that article. On this point the decision in Daryao case : [1962]1SCR574 is of no assistance. But we are of the view that the principle underlying Rule 1 of Order XXIII of the C.P.C. should be extended in the interests of administration of justice to cases of withdrawal of writ petition also, not on the ground of res judicata but on the ground of public policy as explained above. It would also discourage the litigant from indulging in bench-hunting tactics. In any event there is no justifiable reason in such a case to permit a petitioner to invoke the extraordinary jurisdiction of the High Court under Article 226 of the Constitution once again. While the withdrawal of a writ petition filed in a High Court without permission to file a fresh writ petition may not bar other remedies like a suit or a petition under Article 32 of the Constitution of India since such withdrawal does not amount to res judicata, the remedy under Article 226 of the Constitution of India should be deemed to have been abandoned by the petitioner in respect of the cause of action relied on in the writ petition when he withdraws it without such permission. In the instant case the High Court was right in holding that a fresh writ petition was not maintainable before it in respect of the same subject-matter since the earlier writ petition had been withdrawn without permission to file a fresh petition.

18. The aforesaid principle rendered in the context of dismissal of a writ petition filed under Article 226 of the Constitution of India on the ground of Public Policy and also to discourage the litigant from indulging in Bench hunting tactics equally applies to a quash petition filed by invoking the inherent jurisdiction of this Court under Section 482 Cr.P.C.

19. But at the same time it has to be pointed out that the aforesaid ground taken in the present quash petition could not have been taken in the earlier quash petitions since according to the petitioner the non filing of the list of documents mentioned in the complaint came to the knowledge of the petitioner only when the learned Magistrate called for the records from the complainant by his order dated 30.07.2007 passed on the copy application filed by the petitioner in C.A.No.3100 of 2007 dated 23.07.2007. Therefore in the light of the aforesaid facts the present ground taken in the above quash petition could not have been taken in the earlier two quash petitions and therefore the above quash petition should be deemed to have been filed on a fresh cause of action which was not available to the petitioner earlier and hence the preliminary objection raised by the respondent cannot be countenanced.

20. Learned senior Counsel for the petitioner while elaborating the contentions raised in the quash petition made the following submissions:

(i) Since the complainant being a public servant there is no need to record his sworn statement but at least the learned Magistrate must have perused the relevant documents mentioned in the complaint.

(ii) Without calling for the records, the learned Magistrate ought not to have taken the complaint on his file and issued the summons, which shows his non application of mind.

(iii) The learned Magistrate ought to have called for and examined the contents of the documents before taking cognizance of offence and issuing of summons.

(iv) Had the learned Magistrate called for the documents, he would not have taken cognizance of the offence.

21. In support of his aforesaid contentions the learned senior Counsel for the petitioner relied upon the following decisions of the Apex Court:

(a) : 1997CriLJ1519 (Krishnan v. Krishnaveni). In this decision in paragraph 8 it is observed as follows:

8. The object of Section 483 and the purpose behind conferring the revisional power under Section 397 read with Section 401, upon the High Court is to invest continuous supervisory jurisdiction so as to prevent miscarriage of justice or to correct irregularity of the procedure or to mete out justice. In addition, the inherent power of the High Court is preserved by Section 482. The power of the High Court, therefore, is very wide. However, the High Court must exercise such power sparingly and cautiously when the Sessions Judge has simultaneously exercised revisional power under Section 397(1). However, when the High Court notices that there has been failure of justice or misuse of judicial mechanism or procedure, sentence or order is not correct, it is but the salutary duty of the High Court to prevent the abuse of the process or miscarriage of justice or to correct irregularities/incorrectness committed by inferior criminal court in its juridical process or illegality of sentence or order.

(b) 1998 1 L.W. (Crl.) 72 (Pepsi Foods Ltd. and Anr. v. Special Judicial Magistrate and Ors.). In this decision in paragraphs 20 and 26 it is observed as under:

20. It is settled that the High Court can exercise its power of judicial review in criminal matters. In State of Haryana v. Bhajan Lal and Ors. : 1992CriLJ527 this Court examined the extraordinary power under Article 226 of the Constitution and also the inherent powers under Section 482 of the Code which it said could be exercised by the High Court either to prevent abuse of the process of any court or otherwise to secure the ends of justice. While laying down certain guidelines where the court will exercise jurisdiction under these provisions, it was also stated that these guidelines could not be inflexible or laying rigid formulae to be followed by the courts. Exercise of such power would depend upon the facts and circumstances of each case but with the sole purpose to prevent abuse of the process of any court or otherwise to secure the ends of justice. One of such guidelines is where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused. Under Article 227 the power of superintendence by the High Court is not only of administrative nature but is also of judicial nature. This article confers vast powers on the High Court to prevent the abuse of the process of law by the inferior courts and to see that the stream of administration of justice remains clean and pure....

26. Summoning of an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. It is not that the complainant has to bring only two witnesses to support his allegations in the complaint to have the criminal law set into motion. The order of the Magistrate summoning the accused must reflect that he has applied his mind to the facts of the case and the law applicable thereto. He has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused. It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. The Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused.

(c) : AIR1993SC1616 (Punjab National Bank v. Surendra Prasad Sinha). In this decision in paragraphs 5 and 6 it is observed as under:

5. ...The bank had in its possession the fixed deposit receipt as guarantee for due payment of the debt and the bank appropriated the amount towards the debt due and payable by the principal debtor. Further, the F.D.R. was not entrusted during the course of the business of the first appellant as a Banker of the respondent but in the capacity as guarantor. The complaint does not make out any case much less prima facie case, a condition precedent to set criminal law in motion. The Magistrate without adverting whether the allegation in the complaint prima facie makes out an offence charged for, obviously, in a mechanical manner, issued process against all the appellants. The High Court committed grave error in declining to quash the complaint on the finding that the Bank acted prima facie high-handedly.

6. It is also salutary to note that judicial process should not be an instrument of oppression or needless harassment. The complaint was laid impleading the Chairman, the Managing Director of the Bank by name and a host of officers. There lies responsibility and duty on the Magistracy to find whether the concerned accused should be legally responsible for the offence charged for. Only on satisfying that the law casts liability or creates offence against the juristic person or the persons impleaded then only process would be issued. At that stage the court would be circumspect and judicious in exercising discretion and should take all the relevant facts and circumstances into consideration before issuing process lest it would be an instrument in the hands of the private complaint as vendetta to harass the persons needlessly. Vindication of majesty of justice and maintenance of law and order in the society are the prime objects of criminal justice but it would not be the means to wreak personal vengeance. Considered from any angle we find that the respondent had abused the process and laid complaint against all the appellants without any prima facie case to harass them for vendetta.

(d) : 2001CriLJ4765 (S.W. Palanitkar v. State of Bihar). In this decision in paragraphs 23, 25 and 27 it is observed as under:

23. Many a times, complaints are filed under Section 200 CrPC by the parties with an oblique motive or for collateral purposes to harass, to wreck vengeance, to pressurize the accused to bring them to their own terms or to enforce the obligations arising out of breach of contract touching commercial transactions instead of approaching civil courts with a view to realize money at the earliest. It is also to be kept in mind that when parties commit a wrongful act constituting a criminal offence satisfying necessary ingredients of an offence, they cannot be allowed to walk away with an impression that no action could be taken against them on the criminal side. A wrongful or illegal act such as criminal breach of trust, misappropriation, cheating or defamation may give rise to action both on civil as well as on the criminal side when it is clear from the complaint and sworn statements that necessary ingredients of constituting an offence are made out. Maybe parties are entitled to proceed on civil side only in a given situation in the absence of an act constituting an offence but not to proceed against the accused in a criminal prosecution. Hence before issuing a process a Magistrate has to essentially keep in mind the scheme contained in the provisions of Sections 200 - 203 CrPC keeping in mind the position of law stated above and pass an order judiciously and not mechanically or in a routine manner....

25. ...No doubt, exercise of inherent power under Section 482 CrPC by the High Court should be limited to very extreme exceptions but in a case where ingredients of alleged offences are not satisfied, even prima facie, it cannot be said that power under Section 482 CrPC should not be exercised to quash the process issued by a Magistrate. In the case of Nagawwa : 1976CriLJ1533 it is laid down that in such a case, power under Section 482 CrPC can be exercised to quash the process issued by a Magistrate....

27. Exercise of inherent power is available to the High Court to give effect to any order under CrPC, or to prevent abuse of the process of any court or otherwise to secure the ends of justice. This being the position, exercise of power under Section 482 CrPC should be consistent with the scope and ambit of the same in the light of the decisions aforementioned. In appropriate cases, to prevent judicial process from being an instrument of oppression or harassment in the hands of frustrated or vindictive litigants, exercise of inherent power is not only desirable but necessary also, so that the judicial forum of court may not be allowed to be utilized for any oblique motive. When a person approaches the High Court under Section 482 CrPC to quash the very issue of process, the High Court on the facts and circumstances of a case has to exercise the powers with circumspection as stated above to really serve the purpose and object for which they are conferred.

22. Countering the aforesaid submissions the learned Special Public Prosecutor submitted that if the perusal of the allegations contained in the complaint reveals prima facie the commission of any offence the Court can take cognizance of the same. The material point to be considered at this stage is as to whether the Court while taking cognizance has applied its mind to the allegations in the complaint or not. Since the complaint in this case has admittedly been filed by a Public servant, Sections 192 and 202 Cr.P.C. have no role to play. Section 192 Cr.P.C. cannot be made applicable to the complaint in this case which is filed by a Public servant as the said provision is applicable only to a complaint filed by a private person. The examination of the complainant and the perusal of the documents are not necessary in the case filed by a public servant for taking cognizance of the offence and therefore the learned Special Public Prosecutor submitted that the contentions put forth by the learned senior Counsel for the petitioner are liable to be rejected.

23. Learned Special Public Prosecutor further submitted that a complaint by a Court and a complaint by a public servant are conspicuously excluded from the ambit of Section 202 Cr.P.C. All the documents mentioned in the complaint were placed before the authority who has granted sanction to prosecute the petitioner and only after perusing such documents sanction for prosecuting the petitioner has been granted and the sanction for order has been filed along with the complaint; a mere perusal of the allegations contained in the complaint prima facie reveals the ingredients of the offence under Section 35(B) of the Act and therefore the cognizance taken by the learned Magistrate is in accordance with law. In support of his contentions the learned Special Public Prosecutor relied upon the following decisions:

(i) 1990 (1) EFR 5 (Kalloo v. Union of India). In this decision it has been laid down as under:

The question whether in the cases exclusively triable by the Court of Sessions, the Magistrate is bound to ask the complainant to produce all his witnesses and to examine them only arise after the Magistrate considers fit to postpone the issue of the process and decide to hold an inquiry in the matter. If the Magistrate is already satisfied and decides to take cognizance of the matter straightaway and to issue process under Section 204, Cr.P.C. that stage will not reach. As pointed out earlier this discretion of the Magistrate of taking cognizance without postponing the issue of process is perfectly legal and within the ambit of the provisions of Chapter XV mentioned above....

It is, thus, clear that the complaint by private person and the complaint by Court or public servant acting or purporting to act in the discharge of his duties have been put on different pedestal in the scheme of the Code and without recording any statement of the complainant or any witnesses in the second category the cognizance can be taken straightaway and process issued irrespective of the fact whether it is a case exclusively triable by the Sessions Judge or in other ordinary case.

In view of the above discussion it was not necessary for the Chief Judicial Magistrate to have held an inquiry under Section 202(2), Cr.P.C. in the case and the impugned order is legal and does not suffer from any infirmity.

(ii) : 1970CriLJ1132 (B.B. Bhu Sannavar v. L.S. Samagouda). In this decision in paragraph 11 it has been observed as follows:

The word 'complaint' has a wide meaning since it includes even an oral allegation. It may, therefore, be assumed that no form is prescribed which the complaint must take. It may only be said that there must be an allegation which prima facie discloses the commission of an offence with the necessary facts for the Magistrate to take action. Section 190(1)(a) makes it necessary that the alleged facts must disclose the commission of an offence.

24. I have carefully considered the above submissions made by the learned Counsel on either side, perused the allegations contained in the complaint and the order of the learned Additional Chief Metropolitan Magistrate while taking cognizance of the case.

The contentions put forth by the learned senior Counsel for the petitioner that in the absence of the documents mentioned in the list of documents appended to the complaint the cognizance taken by the learned Magistrate is bad is concerned this Court is of the considered view that it is not mandatory that the documents mentioned in the complaint should have been made available to the learned Magistrate even at the time of taking cognizance of the complaint. At the time of taking cognizance what is required is that the learned Magistrate on a careful consideration of the allegations contained in the complaint should be satisfied prima facie that the ingredients of the offence/offences alleged in the complaint are made out. At that stage the learned Magistrate has to take the allegations contained in the complaint to be true and proceed to consider the same to find out as to whether a prima facie case is made out or not.

25. The decisions relied upon by the learned senior Counsel for the petitioner are not applicable to the facts of this case. In : 1997CriLJ1519 (referred to supra) it is laid down that when the High Court notices that there has been failure of justice or misuse of judicial mechanism or procedure, sentence or order is not correct, it is but the salutary duty of the High Court to prevent the abuse of the process or miscarriage of justice or to correct irregularities/incorrectness committed by inferior criminal court in its juridical process or order. In the considered view of this Court the learned senior Counsel for the petitioner is unable to point out any such ground in this case for interference by this Court. Learned senior Counsel relied upon the following observations in paragraph 26 of the Pepsi Foods's Case, namely,

he has to examine the nature of allegations made in the complaint and the evidence both oral and documentary in support thereof and would that be sufficient for the complainant to succeed in bringing charge home to the accused.

But the aforesaid observation has been made by the Hon'ble Apex Court in the context of a complaint filed by a private individual. The facts of the case relating to Pepsi Foods's Case shows that the complaint in that case was filed by a private individual but not by a public servant and therefore the sworn statement of the complainant, the documents and the evidence of the witnesses produced by him were recorded and only in that context the aforesaid observation has been made by the Apex Court. But admittedly in this case the complaint has been filed by a public servant and as such the recording of his sworn statement or the evidence on the side of the complainant at that stage does not arise and hence the above said observation made by the Apex Court is not applicable to the facts of this case. Similarly the law laid down in Punjab National Bank's case and S.W. Palanitkar's case has no relevance to the facts of this case as the facts of those cases are totally different from the facts of the case on hand. In this case the examination of the witnesses and the production of documentary evidence is yet to commence and even before that the above quash petition has been filed. For taking cognizance the examination of the complainant who is a public servant is not necessary and the production of any documents in support of the allegations contained in the complaint are also not necessary. It is also pertinent to point out that it is not the contention of the petitioner that any of the facts stated in the complaint are false and therefore it is not at all necessary for the complainant to have produced the documents enumerated in the list of documents appended in the complaint.

26. It is pertinent to point out that the well settled legal principle relating to pleadings is that the evidence of facts as distinguished from the facts themselves need not be pleaded. In other words the pleadings should contain a statement of material facts on which the party relies but not the evidence by which those facts are to be proved. The facts are of two types:

(a) Facta probanda - the facts required to be proved (material facts); and

(b) Facta probantia - the facts by means of which they are to be proved (particulars or evidence).

27. The complaint should contain only facta probanda and not facta probantia. The material facts on which the complainant relies for bringing home prima facie the offence alleged are called facta probanda and they must be stated in the complaint but the facts or evidence by means of which the material facts are to be proved are called facta probantia and they need not be stated in the complaint. They are not the fact in issue but only relevant facts required to be proved at the trial in order to establish the fact in issue. In the case of William v. Wilcox (1838) 3 AD & EI 314, Lord Denman, C.J., puts the principle pithily:

It is an elementary rule in pleading that, when a state of facts is relied it is enough to allege it simply, without setting out the subordinate facts which are the means of proving it, or the evidence sustaining the allegation.

28. If the aforesaid legal principles are applied to the case on hand it has to be held that the documents described/mentioned in the list of documents appended to the complaint in question are sought to be relied upon by the complainant as evidence for sustaining the allegations made in the complaint. The facts required to be proved to establish the offence alleged have been set out in detail in the complaint and the facts by means of which the allegations are to be proved are by producing the documents mentioned/described in the list of documents. It is not disputed or denied that the contents of the documents mentioned in the list of documents have been set out in detail in the body of the complaint. As laid down in : 1970CriLJ1132 (referred to supra) there must be an allegation which prima facie discloses the commission of an offence with the necessary facts for the Magistrate to take action. Section 190(1)(a) makes it necessary that the alleged facts must disclose the commission of any offence. Therefore if the learned Magistrate had applied his judicial mind to the allegations contained in the complaint and thereafter has come to the conclusion that such allegations do prima facie reveal the commission of the offence and taken cognizance of the offence no exception can be taken.

29. A perusal of the order passed by the learned Magistrate while taking cognizance of the complaint do reveal that the learned Magistrate has applied his judicial mind to the entire allegations contained in the complaint and only thereafter being satisfied that a prima facie case has been made out has taken cognizance of the offence alleged and has ordered issue of process to the petitioner. The learned Magistrate has passed a detailed order even for taking cognizance of the complaint and this Court finds absolutely no error or illegality in the order. Therefore this Court is of the considered view that the non-filing of the documents mentioned in the list of documents appended to the complaint has not vitiated the cognizance taken by the learned Magistrate.

30. For the aforesaid reasons this Court is unable to countenance the contentions put forth by the learned senior Counsel for the petitioner. Accordingly the above Criminal Original Petition fails and the same is dismissed.

31. Heard Mr. Ravi Shankar Prasad the learned Senior Counsel for the petitioner in Criminal Revision Case and Mr. K. Ramasamy learned Special Public Prosecutor for the respondent.

32. The learned senior Counsel for the petitioner made several submissions and the same are dealt with one by one. Since the learned Counsel on either side referred to several decisions, some of them on the very same proposition of law, all the decisions are not being referred to by me except the important ones.

33. The first submission made by the learned senior Counsel for the petitioner is that the obligation to file the wealth tax return is purely vested with the assessee and if there is no obligation to file the return the question of prosecuting the assessee does not arise. According to the learned senior Counsel, Section 14(2) of the Act squarely applies to the case of the petitioner and since the net wealth of the petitioner for the relevant assessment year is less than Rs. 15,00,000/- she need not file any return and if she files any return it shall be deemed never to have been furnished and therefore the petitioner cannot be prosecuted for the alleged offence under Section 35(B) of the Act for non-filing of the return. Learned senior Counsel for the petitioner further submitted that when the net wealth of the assessee is in the negative, the assessee is not obliged to file her return; when the assessee is not obliged to file file her return the entire prosecution under Section 35(B) of the Act for non-filing of the return would become without jurisdiction.

34. Countering the said submissions the learned Special Public Prosecutor submitted that the assessee on her own cannot deduct any liability for arriving at the net wealth without filing the return in Form 'A' prescribed under Rule 3(1)(a) of the Rules framed under the Act disclosing in detail all the particulars referred to therein; if the assessee wants to deduct any liability the assessee must show the evidence along with the return for such liability, only then the Department can find whether the net wealth of the assessee exceeds Rs. 15,00,000/- or not; therefore the filing of the return is mandatory and Section 14(2) of the Act is not applicable in the case of existing assessees.

35. I have considered the aforesaid submission made by the learned Counsel on either side. It has to be pointed out that though the contention based on Section 14(2) of the Act made by the learned senior Counsel looks attractive it has no substance.

36. For better appreciation of the aforesaid contentions put forth by the learned senior Counsel for the petitioner it will be useful to refer to the provisions contained in Section 14 of the Act, which reads as follows:

14. Return of Wealth. - (1) Every person, if his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date exceeded the maximum amount which is not chargeable to wealth-tax, shall, on or before the due date, furnish a return of his net wealth or the net wealth of such other person as on that valuation date in the prescribed form and verified in the prescribed manner setting forth particulars of such net wealth and such other particulars as may be prescribed.

Explanation. - In this sub-section, 'due date' in relation to an assessee under this Act shall be the same date as that applicable to an assessee under the Income-tax Act under the Explanation to Sub-section (1) of Section 139 of the Income-tax Act.

(2) Notwithstanding anything contained in any other provision of this Act, a return of net wealth which shows the net wealth below the maximum amount which is not chargeable to tax shall be deemed never to have been furnished:

Provided that this Sub-section shall not apply to a return furnished in response to a notice under Section 17.

A careful reading of the aforesaid provisions makes it clear that Section 14 casts an obligation statutorily upon every person whose net-wealth is assessable on the valuation date to file a return. It is not permissible, having regard to the scheme and purpose underlying the Act, for anyone to decide for himself or herself that the net-wealth is below the taxable limit, himself or herself working out the statutory deductions and evade the responsibility to file the return.

37. The reliance upon Section 14(2) of the Act to contend that it stands in the way of the petitioner filing the return or prevents an assessee from filing a return if one has net-wealth less than Rs. 15,00,000 (Rupees fifteen lakhs only) is misconceived. Section 14(2) of the Act only enjoins that a return of net-wealth, which shows the net-wealth below the maximum amount which is not chargeable to tax shall be deemed never to have been furnished. This postulates the existence of the return (which means that it should have been filed also) which from the particulars furnished therein 'shows the net-wealth' to be below the maximum not chargeable, as a condition precedent for the deeming envisaged therein to come into operation. It is only such return which has been 'deemed never to have been furnished'. A statutory deeming envisaged in this Sub-section is of a return furnished and factually in existence and available. Otherwise, there is no need for deeming a non-existent return to be 'never to have been furnished'. The said provision does not exonerate such a person envisaged in Section 14 from not filing a return, but only on filing if it satisfy the requirement en-grafted in Section 14(2) of the Act, that the 'return of net-wealth which shows the net-wealth below the maximum amount which is not chargeable', it is ordained to be deemed never to have been furnished. The words 'a return of net-wealth which shows' postulates the existence of return filed and can never relate to a return not filed.

38. Further it is pertinent to point out that admittedly in this case the petitioner was already an assesee and as such she cannot evade liability from filing the return. Hence the above contention of the learned senior Counsel for the petitioner cannot be countenanced and the same is rejected.

39. The second contention of the learned senior Counsel for the petitioner is that when according to Section 2(m), 'net wealth' means the assets in excess of the aggregate value of all the debts owed by the assessee as on the valuation date and when the appellate authority accepted the contention of the assessee and in terms of the appellate order, had the assessing officer done the arithmetic work, the net wealth of the assessee would have become in the negative and the question of prosecuting the assessee would not have arisen. It is further contended that even the amendment to Section 2(m) does not exclude the debt owed. Learned senior Counsel for the petitioner further submitted that the rectification of an assessment must be treated on the same basis as an original assessment for the purpose of a claim to deduction in the computation of the assessee's net wealth. He further contended that it is the final quantification of the particular tax liability which must be taken into account. Learned senior Counsel also contended that the liability to pay income tax is a debt within the meaning of Section 2(m) of the Act and it arises on the valuation date during the accounting year. In support of the above said contentions the learned senior Counsel for the petitioner relied upon the following decisions:

(i) : [1984]145ITR7(SC) (C.W.T. v. Vimlaben Vadilal Mehta). In this decision in paragraph 3 the Apex Court has laid down as under:

3. Even if the tax liabilities, of which a deduction was claimed, were created by rectification orders or by assessment orders made after the date of the wealth tax assessment order under appeal the law requires the claim to deduction being considered on the same basis as if it had been made in the original wealth tax assessment proceeding. It is true that the rectification orders and the gift tax assessments related to tax liabilities which were not claimed by the assessee in the course of the original assessment proceeding before the Wealth Tax Officer, but as the Appellate Assistant Commissioner permitted the claim to be made during the hearing of the appeal, we see no reason why the assessee should be denied consideration of his claim. And as regards the quantification of the other income tax and wealth tax liabilities effected after the Wealth Tax Officer had completed the original wealth tax assessment proceeding, the quantification of the liabilities related to a claim which had already been raised before the Wealth Tax Officer in the course of the original assessment proceeding. As we have observed in CWT v. Vadilal Lallubhai : [1984]145ITR11(SC) the rectification of an assessment must be treated on the same basis as an original assessment for the purpose of a claim to deduction in the computation of the assessee's net wealth. The rectification merely quantifies the true tax liability which had already been crystallised and become a debt on the last day of the previous year in the case of an income tax liability, on the valuation date in the case of a wealth tax liability and on the last day of the previous year in the case of a gift tax liability.

(ii) : [1984]145ITR11(SC) (C.W.T. v. Vadilal Lallubhai). In this decision in paragraph 3 the Apex Court has laid down as under:

3. When, in the course of a wealth tax assessment, the assessee makes a claim to deduction on account of income tax, wealth tax and gift tax liabilities subsisting as debts owed by him on the valuation date, it is the final quantification of the particular tax liability which must be taken into account. Where the wealth tax assessment so made is carried in appeal, we have no doubt that the Appellate Authority will take into account the ultimate quantification of the tax liability, even though such ultimate quantification has been reached after the relevant valuation date and during the pendency of the wealth tax appeal.

(iii) : [1966]59ITR767(SC) (Kesoram Industries v. Commr. W. Tax). In this decision the Apex Court has laid down as under:

For the reasons we have stated earlier, we agree with the conclusion arrived at by the Gujarat High Court. We, therefore, hold that the liability to pay income-tax is a debt within the meaning of Section 2(m) of the Wealth-tax Act and it arises on the valuation date during the accounting year.

40. Countering the aforesaid submissions the learned Special Public Prosecutor submitted that : [1968]69ITR864(SC) (H.H. Sety Parvati Baji v. CWT) relates to the construction of the un-amended Section 2(m) and further in that case the assessee had filed the return and therefore the said decision is not applicable to the facts of this case because in this case we are concerned with the amcnded provision of Section 2(m) of the Act. He further submitted that in the case relating to : [1966]59ITR767(SC) (referred to supra) the assessee had filed the return and that case also dealt with the un-amended provisions contained in Section 2(m) of the Act and therefore the said decision has no relevance to the case on hand; since the order of the appellate authority is no longer in force in view of the order passed by the Income Tax Appellate Tribunal the contention based on the decision reported in : [1984]145ITR7(SC) (referred to supra) has no substance.

41. I have carefully considered the said submissions made by the learned Counsel on either side. The aforesaid contention of the learned senior Counsel is based on the order dated 11.06.1999 passed in W.T. Appeal No. 17/98-99 of the Commissioner of Income-Tax (Appeals-1) Chennai. In the said order the following direction has been issued:

I direct the A.O. To pass a sensible consequential order which should give effect to the direction given by the CIT (A). As directed by the CIT (A) the A.O. Should ascertain the incometax liabilities of the A.Y. Under consideration and allow the same as a deduction from assessable wealth.

Pursuant to the said order the Assistant Commissioner of Wealth Tax, Central Circle II (2), Chennai - 34, passed an order dated 03.08.1999 in GIR No. 701 J/93-94 where-under the net wealth of the assessee was shown as deficit wealth namely Rs. 24,97,939/-. Mainly basing reliance on this order only the petitioner has filed Crl.M.P. No. 3457 of 2007 seeking discharge. It is pertinent to point out that as rightly contended by the learned Special Public Prosecutor as against the order dated 16.06.1997 passed by the Commissioner of Income-Tax (Appeals) (IV), Chennai the revenue preferred an appeal before the Income Tax Appellate Tribunal, Chennai Bench, 'A' Chennai in WTA No. 293 (MDS)/97 (Assessment year 1993-1994) and the said appeal was allowed in favour of the Revenue by order dated 16.12.2005. In the said order the scope of the amended provision 2(m) was considered in detail and ultimately it has been held as follows:

Taking into consideration the entire conspectus of the case we are of the opinion that the income-tax and wealth-tax liabilities cannot be deducted as debts due in relation to taxable assets. We, therefore decide this issue in favour of the Revenue and against the assessee.

It is also seen that the Assessing Officer by his order dated 03.07.2006 in GIR No. 701 J/93-94 had quantified the wealth tax payable by the assessee as Rs. 5,95,617/-. Therefore when the order of the Commissioner of Income Tax (Appeals) IV, dated 16.06.1997 itself has been set-aside by the Tribunal it goes without saying that all the consequential orders/proceedings passed/issued pursuant to the order dated 16.06.1997 namely the order dated 30.06.1997 of the A.O. giving effect to the order dated 16.06.1997, the order dated 11.06.1999 passed in WTA No. 17/98-99 and the consequential order dated 03.08.1999 passed in GIR No. 701 J/93-94 gets obliterated and ceased to be in existence. Therefore the aforesaid contention of the learned senior Counsel for the petitioner has no basis whatsoever and hence the same is liable to the rejected and accordingly rejected. The learned Magistrate has dealt with the scope of the amcnded provisions contained in Section 2(m) of the Act which is in consonance with the order passed by the Income Tax Appellate Tribunal dated 16.12.2005 and therefore the said order does not call for any interference. Moreover it has to be pointed out that neither the learned Magistrate nor this Court in a criminal proceedings can go into the question of correctness or otherwise of the order passed by the authorities under the wealth tax act as the same can be done only by the competent authorities under the Act. In the considered view of this Court the said contention itself ought not to have been allowed to be raised before the learned Magistrate.

42. It is pertinent to point out that the learned senior Counsel for the petitioner submitted that in the counter affidavit the respondent has taken a stand that a Criminal Court can determine the tax liability of the petitioner and contended that the criminal court cannot determine the tax liability of the petitioner. In support of the said contention the learned senior Counsel relied upon a decision of the Apex Court reported in : [1972]83ITR685(SC) (S.V. Kandeakar v. V.M. Deshpande) and submitted that the contention put forth in the counter filed by the respondent that the criminal court can determine the tax liability of the petitioner cannot be countenanced. But it has to be pointed out that during the course of arguments the learned Senior Special Public Prosecutor for Income-tax Cases himself has fairly submitted that the respondent is not pressing the said contention and has conceded that the criminal court has no power to determine the tax liability of the petitioner. When the contention of the revision petitioner itself is that the Criminal Court cannot determine the tax liability of the petitioner it is futile on the part of the petitioner to expect the criminal court to render a finding as to whether the income tax and wealth tax liabilities are deductable for arriving at the net wealth of the petitioner in the light of the amanded provisions contained in Section 2(m) of the Act. Learned senior Counsel himself rightly contended that the Income Tax Act as well as the Wealth Tax Act are self-contained codes and there are several authorities constituted under the said Acts clothed with jurisdiction to pass assessment orders and determine the Income Tax/Wealth Tax liability of the assessees and as such the criminal court cannot decide the tax liability of a person. In the light of the said contention of the learned senior Counsel for the petitioner himself this Court is of the considered view that the contentions put forth by the petitioner basing reliance on the provisions contained in Section 2(m) of the Act ought not to have been raised at all before the Criminal Court.

43. The third submission made by the learned senior Counsel for the petitioner is that the assessment proceedings in the case of the petitioner have not reached finality; the assessee has filed a tax case in Tax Case SR Nos. 35552 to 35556 of 2008 on 22-4-2008 before this Court with a petition to condone the delay and such delay is yet to be condoned. Basing reliance on the pendency of the Tax Case the learned senior Counsel submitted that an appeal re-opens everything and when the net wealth is finally quantified it reverts back to the original date and therefore till final quantification is done and all the remedies available to the assessee under the wealth tax Act up to the Supreme Court are exhausted the assessee cannot be prosecuted. He further submitted that in view of Section 2 of the Economic Offences in applicability of Limitation Act 1974 no period of limitation is prescribed for prosecuting the assessee for non-filing of the return if ultimately it is decided that such assessee is liable for payment of wealth tax. Therefore the learned senior Counsel contended that the prosecution launched against the petitioner is pre-mature. In support of the aforesaid contention the learned senior Counsel relied upon the following decisions:

(i) (2005) 10 Scc 451 (Guru Nanak Enterprises v. ITO). In this decision in paragraphs 5 to 7 the Apex Court has held as under:

5. It appears to us that the case of the appellant is clearly covered by proviso (ii)(b) of Section 276-CC. In the instant case as noticed, the total tax liability of the appellant was finally assessed at Rs. 1360. Under Section 276-CC proviso (ii)(b), shorn of unnecessary details, a person shall not be proceeded against under this Section for failure to furnish in due time the return of income if the tax payable by him on the total income determined, as reduced by advanced tax, if any, paid, and any tax deducted at source, does not exceed Rs. 3000. As noticed earlier, the appellant had disclosed a tax liability of Rs. 644 which on final assessment was determined as Rs. 1360.

6. Counsel for the Revenue could not advance any argument to support the prosecution launched against the appellant, because it is clear that the total income tax liability determined by the department is only Rs. 1360 which is much less than Rs. 3000 envisaged under the proviso.

7. We, therefore, find in the facts and circumstances of the case, that the prosecution is wholly unwarranted....

It is pertinent to point out that that in the above referred Guru Nanak Enterprises's case in respect of the assessment year 1982-1983 the appellant firm did not file its return in time but in its income tax return filed belatedly the appellant disclosed a tax liability of Rs. 644. Thus it is clear that in that case the return was filed but it was filed belatedly but in the case on hand the wealth-tax return is admittedly not at all filed even as on today. This decision is relied upon in support of the contention that unless and until the wealth-tax assessment proceedings reach finality the assessee cannot be prosecuted for non-filing of the wealth-tax returns.

(ii) : [2001]2SCR178 (CIT v. Bhupen Champak Lal Dalal). In this decision in paragraphs 3 to 5 the Apex Court has laid down as under:

3. The prosecution in criminal law and proceedings arising under the Act are, undoubtedly, independent proceedings and, therefore, there is no impediment in law for the criminal proceedings to proceed even during the pendency of the proceedings under the Act. However, a wholesome rule will have to be adopted in matters of this nature where courts have taken the view that when the conclusions arrived at by the Appellate Authorities have a relevance and bearing upon the conclusions to be reached in the case necessarily one authority will have to await the outcome of the other authority.

4. This Court in G.L. Didwania v. ITO : [1997]224ITR687(SC) dealt with the similar situation where there is a prosecution under the Act for making a false statement that the assessee had intentionally concealed his income and the Tribunal ultimately set aside the assessment holding that there is no material to hold that such income belongs to the assessee and the petition was filed before the Magistrate to drop the criminal proceedings and thereafter, an application was filed before the High Court under Section 482 CrPC to quash those criminal proceedings. This Court held that the whole question is whether the appellant made a false statement regarding the income which according to the assessing authority has escaped assessment and this issue was dependent on the conclusion reached by the Appellate Tribunal and hence the prosecution could not be sustained. In Uttam Chand v. ITO : [1982]133ITR909(SC) this Court held that in view of the finding recorded by the Tribunal on appraisal of the entire material on the record that the firm was a genuine firm and the assessee could not be prosecuted for filing false returns and, therefore, quashed the prosecution. In P. Jayappan v. S.K. Perumal First ITO : [1984]149ITR696(SC) this Court observed that the pendency of the reassessment proceedings under the Act cannot act as a bar to the institution of the criminal proceedings and postponement or adjournment of a proceedings for unduly long period on the ground that another proceedings having a bearing on the decision was not proper.

5. In the present case, there is no claim of quashing of the proceedings. When ultimately the result to come out of the proceedings before the Appellate Authorities have a definite bearing on the cases alleged against the respondents, we find that the High Court is justified in granting the interim order it did and we do not think that such an interim order calls for interference at our hands. The learned Counsel on either side relied on several decisions, but in the view we have taken it is unnecessary to refer to those decisions.

In the considered view of this court the above decision has no relevance to the facts of the case on hand since the facts of this case are different. Even in this very same decision in paragraph 3 the Apex Court has observed that the prosecution in criminal law and proceedings arising under the Act are, undoubtedly, independent proceedings and, therefore, there is no impediment in law for the criminal proceedings to proceed even during the pendency of the proceedings under the Act. The Apex Court has referred to and relied upon the earlier decisions of the Apex Court reported in : [1997]224ITR687(SC) (G.L. Didwania v. ITO), : [1982]133ITR909(SC) (Uttam Chand v. ITO) and : [1984]149ITR696(SC) (P. Jayappan v. S.K. Perumal, First ITO).

(iii) : [1997]224ITR687(SC) (G.L. Didwania v. Income Tax Officer). In that case, the assessing authority holding that the appellant/assessee had intentionally concealed his income derived from 'Y' company which belonged to him, initiated prosecution against him. The appellant filed an appeal before the Appellate Tribunal and the Tribunal set-aside the assessment holding that there was no material to hold that the 'Y' company belonged to assessee. Basing reliance on the finding of the Appellate Tribunal a petition was filed before the Magistrate to drop the criminal proceedings. An application before the High Court under Section 482 Cr.P.C. to quash the criminal proceedings was filed and the same was dismissed. Hence the appeal was filed before the Apex Court and the Apex Court held that the whole question was whether the appellant made a false statement regarding the income which according to the assessing authority had escaped assessment. Since this issue was concerned the finding of the appellate tribunal was conclusive and hence the prosecution cannot be sustained and on that ground the criminal proceedings are quashed. But the facts of this case are totally different from the facts of the case on hand and hence the decision is not applicable.

(iv) : [1984]149ITR696(SC) (P. Jayappan v. S.K. Perumal, 1ST I.T.O.). In this decision in paragraphs 5 and 6 it is laid down as under:

5. At the outset it has to be stated that there is no provision in law which provides that a prosecution for the offences in question cannot be launched until reassessment proceedings initiated against the assessee are completed. Section 279 of the Act provides that a person shall not be proceeded against for an offence punishable under Section 276-C or Section 277 of the Act except at the instance of the Commissioner. It further provides that a person shall not be proceeded against for an offence punishable under those provisions in relation to the assessment for an assessment year in respect of which penalty is imposed or imposable on him under Clause (iii) of Sub-section (1) of Section 271 has been reduced or waived by an order under Section 273-A. The Commissioner has the power either before or after the institution of proceedings to compound any such offence. In this case it is not claimed that the Commissioner has not initiated the proceedings for instituting the complaints. No other legal bar for the institution of the proceedings is urged except stating that in the event of the petitioner being exonerated in the reassessment proceedings, the prosecutions may have to be dropped. It is true that as observed by this Court in Uttam Chand v. ITO : [1982]133ITR909(SC) , the prosecution once initiated may be quashed in the light of a finding favourable to the assessee recorded by an authority under the Act subsequently in respect of the relevant assessment proceedings but that decision is no authority for the proposition that no proceedings can be initiated at all under Section 276-C and Section 277 as long as some proceeding under the Act in which there is a chance of success of the assessee is pending. A mere expectation of success in some proceeding in appeal or reference under the Act cannot come in the way of the institution of the criminal proceedings under Section 276-C and Section 277 of the Act. In the criminal case all the ingredients of the offence in question have to be established in order to secure the conviction of the accused. The criminal court no doubt has to give due regard to the result of any proceeding under the Act having a bearing on the question in issue and in an appropriate case it may drop the proceedings in the light of an order passed under the Act. It does not, however, mean that the result of a proceeding under the Act would be binding on the criminal court. The criminal court has to judge the case independently on the evidence placed before it. Otherwise there is a danger of a contention being advanced that whenever the assessee or any other person liable under the Act has failed to convince the authorities in the proceedings under the Act that he has not deliberately made any false statement or that he has not fabricated any material evidence, the conviction of such person should invariably follow in the criminal court....

6. It may be that in an appropriate case the criminal court may adjourn or postpone the hearing of a criminal case in exercise of its discretionary power under Section 309 of the Code of Criminal Procedure if the disposal of any proceeding under the Act which has a bearing on the proceedings before it is imminent so that it may take also into consideration the order to be passed therein. Even here the discretion should be exercised judicially and in such a way as not to frustrate the object of the criminal proceedings. There is no rigid rule which makes it necessary for a criminal court to adjourn or postpone the hearing of a case before it indefinitely or for an unduly long period only because some proceeding which may have some bearing on it is pending elsewhere. But this, however, has no relevance to the question of maintainability of the prosecution. The prosecution in those circumstances cannot be quashed on the ground that it is a premature one.

(v) : 1992CriLJ2781 (K.T.M.S. Mohd. v. Union of India). In this decision after referring to P. Jayappan's case and Uttam Chand's case in paragraph 51 the Apex Court has held as under:

51. In the present case, on two occasions, the Tribunal has held that the amount of Rs. 6 lakhs was not owned by the first appellant. In Ex. D-4, the Tribunal has further held that Section 69(a) dealing with the unexplained money etc. has no application to the facts of the case. Taking this finding of the Tribunal into consideration, we are constrained to hold that the appellants cannot be held to be liable for punishment under Sections 120B read with 277 and 277 (simpliciter) of the I.T. Act as the very basis of the prosecution is completely nullified by the order of the Tribunal which fact can be given due regard in deciding the question of the criminal liability of appellants 1 and 2.

Basing reliance on P. Jayappan's case the learned senior Counsel for the petitioner submitted that since the tax case filed by the petitioner is still pending even if this Court is of the view that the criminal proceedings cannot be quashed or the revision is not allowed a direction may be issued to the learned Magistrate to stay all further proceedings in the case and await the out come of the Tax Case pending before this Court.

44. Learned senior Counsel for the petitioner based reliance on the decision reported in : 1973CriLJ347 (State of Bihar v. Deokaran Nenshi). In this decision in paragraphs 5 and 9 the Apex Court has observed as under:

5. A continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involves a penalty, the liability for which continues until the rule or its requirement is obeyed or complied with. On every occasion that such disobediance or non-compliance occurs and reoccurs, there is the offence committed. The distinction between the two kinds of offences is between an act or omission which constitutes an offence once and for all and an act or omission which continues, and therefore, constitutes a fresh offence every time or occasion on which it continues. In the case of a continuing offence, there is thus the ingredient of continuance of the offence which is absent in the case of an offence which takes place when an act or omission is committed once and for all.

9. Regulation 3 read with Section 66 of the Mines Act makes failure to furnish annual returns for the preceding year by the January 21, of the succeeding year an offence. The language of Regulation 3 clearly indicates that an owner, manager etc. of a mine would be liable to the penalty if he were to commit an infringement of the Regulation and that infringement consists in the failure to furnish returns on or before January 21, of the succeeding year. The infringement, therefore, occurs on January 21, of the relevant year and is complete on the owner failing to furnish the annual returns by that day. The Regulation does not lay down that the owner, manager etc. of the mine concerned would be guilty of an offence if he continues to carry on the mine without furnishing the returns or that the offence continues until the requirement of Regulation 3 is complied with. In other words, Regulation 3 does not render a continued disobedience or non-compliance of it an offence. As in the case of a construction of a wall in violation of a rule or a bye-law of a local body, the offence would be complete once and for all as soon as such construction is made, a default occurs in furnishing the returns by the prescribed date. There is nothing in Regulation 3 or in any other provision in the Act or the Regulations which renders the continued non-compliance an offence until its requirement is carried out.

Basing reliance on the above decision learned senior Counsel for the petitioner submitted that the offence alleged in this case namely Section 35(B) of the Act is not a continuing offence.

45. The learned Special Public Prosecutor submitted that P. Jayappan's case lends support to the case of the Revenue rather than the contentions put forth by the learned senior Counsel for the petitioner. He further submitted that in P. Jayappan's case in paragraph 6 the Apex Court has observed that in an appropriate case the criminal court may adjourn or postpone the hearing of a criminal case in exercise of its discretionary power under Section 309 of the Code of Criminal Procedure if the disposal of any proceeding under the Act which has a bearing on the proceedings before it is imminent so that it may take also into consideration the order to be passed therein. He further submitted that in this case, even according to the petitioner, the Tax Case has been filed with a huge delay and the delay itself is yet to be condoned and thereafter the tax case is to be disposed of and it is not certain as to when the Tax Case will be finally disposed of and therefore submitted that when the disposal of the proceedings under the Act namely the Tax Case pending before this Court is not imminent there is no scope for either adjourning or postponing the hearing of the criminal case. He further pointed out that in the very same decision the Apex Court itself has observed that 'there is no rigid rule which makes it necessary for a criminal court to adjourn or postpone the hearing of a case before it indefinitely or for an unduly long period only because some proceeding which may have some bearing on it is pending elsewhere. But this, however, has no relevance to the question of maintainability of the prosecution. The prosecution in those circumstances cannot be quashed on the ground that it is a premature one'. He further submitted that all the witnesses to be examined in this case are all aged and already three witnesses have retired from service and one witness is above 75 years old and another witness is due to retire within few days and therefore submitted that this is not a fit case where the criminal proceedings can either be quashed or stayed awaiting the out come of the Tax Case filed by the petitioner.

46. He further submitted that since no return has been filed by the assessee till date the offence still continues as the petitioner has not disclosed her true and correct net-wealth in the prescribed form as required under Section 14 of the Act; reliance is placed on : [1986]157ITR330(SC) (Maya Rani Punj v CIT) wherein it is held that the non-compliance of an obligation of making a return is an infraction as long as the default continues and therefore the fact remains that the proceedings will have no bearing on the prosecution proceedings pending against the petitioner herein for non-filing of the return. He further submitted that in Maya Rani Punj's case, State of Bihar v. Deokaran Nenshi's case has been referred to and only thereafter the three Judges Bench has laid down as above and therefore the submission made by the learned senior Counsel basing reliance on State of Bihar v. Deokaran Nenshi's case cannot be countenanced.

47. I have considered the said submissions made by the learned Counsel on either side. The aforesaid contentions put forth by the learned senior Counsel for the petitioner are effectively answered in the decision of the Three Judges Bench of the Hon'ble Apex Court rendered in P. Jayappan's case referred to above wherein it has been clearly laid down that a mere expectation of success in some proceeding in appeal or reference under the Act cannot come in the way of the institution of the criminal proceedings under the Income Tax Act. In P. Jayappan's case in paragraph 6 it has been observed that in an appropriate case the criminal court may adjourn or postpone the hearing of a criminal case in exercise of its discretionary power under Section 309 of the Code of Criminal Procedure if the disposal of any proceeding under the Act which has a bearing on the proceedings before it is imminent so that it may take also into consideration the order to be passed therein. But in this case, even according to the petitioner, the Tax Case has been filed with a huge delay and the delay itself is yet to be condoned and thereafter the tax case is to be disposed of and it is not certain as to when the Tax Case will be finally disposed of and therefore when the disposal of the proceedings under the Act namely the Tax Case pending before this Court is not imminent there is no scope for either adjourning or postponing the hearing of the criminal case. In the very same decision, the Apex Court itself has observed that 'there is no rigid rule which makes it necessary for a criminal court to adjourn or postpone the hearing of a case before it indefinitely or for an unduly long period only because some proceeding which may have some bearing on it is pending elsewhere. But this, however, has no relevance to the question of maintainability of the prosecution. The prosecution in those circumstances cannot be quashed on the ground that it is a premature one'. Further it is contended by the learned Special Public Prosecutor that all the witnesses to be examined in this case are all aged and already three witnesses have retired from service and one witness is above 75 years old and another witness is due to retire within few days and therefore this Court is of the considered view that this is not a fit case where the criminal proceedings can be stayed awaiting the out come of the Tax Case filed by the petitioner. Further since admittedly the Criminal Case is of the year 1997 it is not just or proper to adjourn or postpone the hearing of the case pending before the Criminal Court indefinitely or for an unduly long period. Since the provisions of the wealth tax Act and the Income Tax Act are in pari-materia with each other the aforesaid decision squarely applies to the facts of this case and therefore the above contentions of the learned senior Counsel for the petitioner are liable to be rejected and accordingly rejected.

48. As rightly contended by the learned Special Public Prosecutor Maya Rani Punj's case is a decision rendered by a Three Judges Bench of the Apex Court and in this case the Hon 'ble Apex Court has referred to the decision of the Apex Court in Deokaran Nenshi's case and only thereafter has held that the non-compliance of an obligation of making a return is an infraction as long as the default continues. Therefore the contention of the learned senior Counsel for the petitioner that the offence under Section 35-B of the Act is not a continuing offence cannot be countenanced.

49. For the aforesaid reasons the following decisions referred to and relied upon by the learned senior Counsel for the petitioner, namely, (2005) 10 Scc 451 (referred to supra), : [2001]2SCR178 (referred to supra) : [1997]224ITR687(SC) (referred to supra) and : 1992CriLJ2781 (referred to supra) are not applicable to the facts of this case as the facts of those cases are totally different.

50. The learned senior Counsel for the petitioner submitted that admittedly in this case a notice under Section 16(4) of the Act alone has been given and no notice under Section 17 of the Act has been issued and therefore the non-filing of the return even after the issuance of a notice under Section 16(4) of the Act cannot be construed to be wilful. Before the learned Magistrate a contention has been raised by the petitioner that the notice issued under Section 16(4) of the Act is not a proper notice and it was also not properly served on the assessee. While considering the aforesaid contention the learned Magistrate has observed that the question whether the notice issued by the Department asking the assessee to file the report is issued under correct provision of law and whether that notice was properly served on the person can be proved only during the trial by letting in oral and documentary evidence by the prosecution. The learned Magistrate has further observed that even the alleged notice has not been marked as an exhibit to enable the Court to look into it and hence has not considered the said contention on merits. According to the learned senior Counsel, the learned Magistrate has erred in making such observation and submitted that the said contention ought to have been considered by the learned Magistrate on merits.

51. Countering the said submissions the learned Special Public Prosecutor submitted that when admittedly the notice issued under Section 16(4) of the Act has not been marked as an exhibit and the proof of service has also not been marked before the Court below and the evidence is yet to be let in it is pre-mature to expect the learned Magistrate to decide the said question.

52. I have carefully considered the aforesaid submissions made by the learned Counsel on either side. I am of the considered view that the observations made by the learned Magistrate is perfectly in order and it cannot be said that the learned Magistrate has committed any error of law. When admittedly the notice issued under Section 16(4) of the Act is not before the Court namely that the same has not been marked as an exhibit and the proof of service of the same is also not been produced before the Court it is not proper on the part of the petitioner to expect the learned Magistrate to consider the said issue at that stage. In the considered view of this Court the said contention goes beyond the scope of Section 245(2) of the Cr.P.C.

53. Even otherwise this Court is of the considered view that the said contention is without substance for the reasons stated here-under:

The relevant provisions of Section 16 of the Act reads as under:

16. Assessment. - (1) Where a return has been made under Section 14 or Section 15 or in response to a notice under Clause (i) of Sub-section (4),-

(i) if any tax or interest is found due on the basis of such return, after adjustment of any amount paid by way of tax or interest, then, without prejudice to the provisions of Sub-section (2), an intimation shall be sent to the assessee specifying the sum so payable and such intimation shall be deemed to be a notice of demand issued under Section 30 and all the provisions of this Act shall apply accordingly, and

(ii) if any refund is due on the basis of such return, it shall be granted to the assessee and an intimation to this effect shall be sent to the assessee...

(2) ...

(3) ...

(4) For the purposes of making an assessment under this Act, the Assessing officer may serve, on any person who has made a return under Section 14 or Section 15 or in whose case the time allowed under Sub-section (1) of Section 14 for furnishing the return has expired, a notice requiring him, on a date to be specified therein-

(i) where such person has not made a return (within the time allowed under Sub-section (1) of Section 14 to furnish a return of his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date, in the prescribed form and verified in the prescribed manner, setting forth the particulars of such net wealth and such other particulars as may be prescribed, or

(ii) to produce or cause to be produced such accounts, records or other documents as the Assessing Officer may require.

(5) if any person-

(a) fails to make the return required under Sub-section (1) of Section 14 and has not made a return or a revised return under Section 15, or

(b) fails to comply with all the terms of a notice issued under Sub-section (2) or Sub-section (4),

the Assessing Officer, after taking into account, all relevant material which he has gathered, shall, after giving such person an opportunity of being heard, estimate the net wealth to the best of his judgment and determine the sum payable by the person on the basis of such assessment.

54. Section 17 of the Act reads as under:

17. Wealth escaping assessment. - (1) If the Assessing Officer has reason to believe that the net wealth chargeable to tax in respect of which any person is assessable under this Act has escaped assessment for any assessment year (whether by reason of under-assessment or assessment at too low a rate or otherwise), he may, subject to the other provisions of this Section and Section 17-A, serve on such person a notice requiring him to furnish within such period, as may be specified in the notice, a return in the prescribed form and verified in the prescribed manner setting forth the net wealth in respect of which such person is assessable as on the valuation date mentioned in the notice, along with such other particulars as may be required by the notice, and may proceed to assess or reasssess such net wealth and also any other net wealth chargeable to tax in respect of which such person is assessable, which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this Section for the assessment year concerned (hereinafter in this Section referred to as the relevant assessment year), and the provisions of this Act shall, so far as may be, apply as if the return were a return required to be furnished under Section 14:

Explanation to Section 17(1A) reads as under:

Explanation. - For the purposes of Sub-section (1) and Sub-section (1A), the following shall also be deemed to be cases where net wealth chargeable to tax has escaped assessment, namely:

(a) where no return of net wealth has been furnished by the assessee although his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date exceeded the maximum amount which is not chargeable to wealth-tax;

(b) where a return of net wealth has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the net wealth or has claimed excessive exemption or deduction in the return.

55. A careful reading of the aforesaid provisions makes it clear that while Section 16 deals with assessment, Section 17 deals with wealth escaping assessment and thus the above provisions apply to two different situations. As per Section 16(4) of the Act, an Assessing Officer may serve a notice requiring a person in whose case the time allowed under Sub-section (1) of Section 14 for furnishing the returns has expired on a date to be specified therein - where such person has not made a return within the time allowed under Sub-section (1) of Section 14 to furnish a return of his net wealth in the prescribed form and verified in the prescribed manner setting forth the particulars of said net wealth and such other particulars as may be prescribed. If any person fails to comply with all the terms of the notice issued under Sub-section (4) the Assessing Officer after taking into account all relevant material which he has gathered shall after giving such person an opportunity of being heard estimate the net wealth to the best of his judgment and determine the sum payable by the person on the basis of such assessment. Admittedly in this case the assessee/petitioner had not filed the return for the assessment year 1993-1994 within the due date and hence the Assessing Officer had issued the notice under Section 16(4) of the Act and thereafter by following the procedure prescribed under Section 16 has passed the best judgment assessment. The aforesaid facts are not in dispute.

56. Whereas Section 17 deals with cases relating to escaped assessment and it is not the case of the learned senior Counsel for the petitioner that the assessment pertaining to the petitioner falls under this category namely escaped assessment. Only in a case where Section 17 applies a notice contemplated under Section 17(1) of the Act can be issued but not otherwise. Simply because in the explanation to SUB-Section (1-A) of Section 17 of the Act it is provided that where no return of net wealth has been furnished by the assessee although his net wealth on the valuation date exceeded the maximum amount which is not chargeable to wealth tax shall also be deemed to be a case where net wealth chargeable to tax as escaped assessment for the purpose of Sub-sections (1) and (1-A), it cannot be contended that, first a notice under Section 17(1) of the Act should be issued and only thereafter a notice under Section 16(4) of the Act can be issued. At the cost of repetition it has to be pointed out that the provisions contained in Sections 16 and 17 operate in two different situations and therefore this Court is unable to countenance the aforesaid contention put forth by the learned senior Counsel for the petitioner and the notice issued under Section 16(4) of the Act to the petitioner should be construed to be validly issued.

57. Before the learned Magistrate a contention had been raised that for mere non-filing of the return of wealth prosecution cannot be launched and the element of 'wilfulness' in not filing the return of wealth on the part of the assessee has to be established by the prosecution but no materials have been produced by the prosecution to prove the wilfulness in non filing of the return and hence the assessee is entitled for discharge. The learned Magistrate basing reliance on the provisions contained in Section 35-O of the Act and the various decisions referred to in the order came to the conclusion that the element of 'wilfulness' in non filing of the return of wealth need not be proved by the prosecution and it is on the shoulder of the accused to prove the non having of the mental state of the 'wilfulness' by the rebuttal evidence. Though the aforesaid findings of the learned Magistrate has been challenged in ground No. 33 of the grounds of revision as under:

33. It is submitted that the trial court erred in relying upon the presumption engrafted into Section 35 of the Act to hold that the element of wilfulness in non filing of return of wealth need not be proved by the prosecution and that is on the shoulder of the accused to prove the absence of mental state, without considering that the prosecution was duty bound to make out a prima facie case of wilfulness to warrant further consideration of a complaint, which the prosecution had failed to do in the case on hand.

the Learned Senior Counsel for the petitioner did not advance any arguments in that regard. On the contrary the learned Special Public Prosecutor wanted to make submissions relating to mens-rea on the part of the assessee in not filing the returns, but this Court did not permit him to advance any arguments by pointing out that it is the function of the trial court at the conclusion of the trial and on the basis of the evidence to be let in to decide the question of mens-rea and its rebuttal by the petitioner.

58. In the decision reported in : 2004CriLJ3362 (Prakash Nath Khanna v. C.I.T.) the Apex Court while considering Section 278-E of the Income-Tax Act which is in pari-materia with Section 35-O of the Act has held as under:

There is a statutory presumption prescribed in Section 278-E. The court has to presume the existence of culpable mental state, and absence of such mental state can be pleaded by an accused as a defence in respect of the act charged as an offence in the prosecution. Therefore, the factual aspects highlighted by the appellants were rightly not dealt with by the High Court. This is a matter for trial. It is certainly open to the appellants to plead absence of culpable mental state when the matter is taken up for trial.

It may be that only in the light of the aforesaid decision of the Apex Court the learned senior Counsel may not have advanced any submissions on the aforesaid ground taken in the grounds of revision.

59. It will also be useful to refer to the decision of the Apex Court reported in : [1994]1SCR429 (State of Maharashtra v. Som Nath Thapa) wherein the Hon 'ble Apex Court has observed thus:.The aforesaid shows that if on the basis of materials on record, a court could come to the conclusion that commission of the offence is a probable consequence, a case for framing of charge exists. To put it differently, if the court were to think that the accused might have committed the offence, it can frame the charge, though for conviction the conclusion is required to be that the accused has committed the offence. It is apparent that at the stage of framing of a charge, probative value of the materials on record cannot be gone into; the materials brought on record by the prosecution has to be accepted as true at that stage.

60. The aforesaid legal principles has been rightly followed by the learned Magistrate in this case. In the decision reported in : 2000CriLJ3478 (Om Prakash Sharma v. C.B.I. Delhi) the Hon'ble Apex Court cautions the trial courts against undertaking a roving enquiry against the pros and cons of the case by weighing the evidence or collecting the materials, as if during the course or after the trial. The Apex Court has also held that this would depend on the facts of each case and also that the Court concerned namely the Magistrate's Courts must be allowed a large latitude in the matter of exercise of discretion, and unless the Court conducts itself in so demonstrably an unreasonable manner unbecoming of a judicial authority, the superior court shall not intervene very lightly or in a routine fashion. The reason being, at that stage, 'the question is one of mere proprieties involved in the exercise of judicial discretion by the Court and not of any rights concretised in favour of the accused'. In the light of the aforesaid observations made by the Hon'ble Apex Court if the order of the learned Magistrate is considered it could be seen that the learned Magistrate has considered all the submissions made by both sides, has framed the points for consideration, has dealt with each of them and has come to the conclusion that some of the questions raised by the petitioner must be decided, substantiated and adjudicated at the time of trial.

61. It has to be pointed out that the learned Magistrate in his detailed order has considered all these aspects and applied the correct principles of law to the facts of this case and as such I find absolutely no reason to interfere with the order. For the reasons stated above the above Criminal Revision Case fails and the same is dismissed.

62. Before parting with the case this Court wants to refer to the submission made by the learned Special Public Prosecutor regarding the long pendency of the case before the Trial Court. The learned Special Public Prosecutor vehemently contended that the petitioner had sought for more than 180 adjournments and had not allowed the prosecution to commence the examination of the witnesses and submitted that the delay in disposal of the case is only due to various vexatious proceedings initiated by the petitioner. But it has to be pointed out that in the reply filed by the petitioner it has been pointed out that though the petition under Section 245(2) of the Cr.P.C. was filed in the year 2001 the respondent had taken nearly three-and-half years to file the counter statement and the same was only filed in the year 2004 and thereafter also the petition was not taken up for hearing by the Court below but the respondent was insisting for the examination of the witnesses even before the disposal of the discharge petition. Therefore the petitioner had to approach this Court for a direction under Section 482 Cr.P.C. for disposal of the discharge petition and only after this Court directed the learned Magistrate to dispose of the petition filed under Section 245(2) Cr.P.C. the same was disposed of on 25.02.2008 and therefore the delay in disposal of the case was not due to any default on the part of the petitioner. It has also been pointed out by the petitioner that after the case was taken on file by the Court below quash petitions were filed before this Court and initially stay was granted and only because of the pendency of the Criminal Original Petition the trial could not be commenced.

63. The aforesaid facts shows that the petitioner cannot be entirely blamed for the delay in disposal of the case by the Court below but on the other hand the respondent as well as the Court below are also responsible for the huge delay that has occasioned as aforesaid.

64. This Court, in the light of the directions issued on earlier occasions while disposing of the Criminal Original Petition Nos. 2759 and 5378 of 1998 directing the Court below to conclude the trial within a specified time, expects the petitioner as well as the respondent to co-operate with the Trial Court to dispose of the case at the earliest. Considering the fact that the case is pending right from 1997 the learned Additional Chief Metropolitan Magistrate, (Economic Offence - I), Egmore, Chennai, is hereby directed to dispose of EOCC No. 263 of 1997 as early as possible and preferably within a period of five months from the date of receipt of a copy of this order.


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