Stating that “there is no provision for registration of an FIR in matters of alleged evasion of tax, and the provisions of the VAT Act only provide for mandatory penalty”, the Punjab and Haryana High Court has quashed an FIR against a man who had been booked nine years ago in a case of cheating and under Section 4 of Punjab Tax on Entry of Goods into Local Areas Act, at Mansa.

The petitioner, Deepak Kumar, was booked on December 5, 2013, under Sections 420 (cheating), 120-B (criminal conspiracy) of IPC and Section 4 of Punjab Tax on Entry of Goods into Local Areas Act, 2000, at Mansa City-II police station. The petitioner was accused of issuing fake bills to a person namely Narinder Singh for evading entry tax on furnace oil brought to Punjab from Haryana.

As per police, a secret informer had given information that an oil tanker driven by Narinder Singh, who was hand in glove with his employers, was bringing furnace oil from Haryana and was using secret/abandoned passages for the purpose of entry into Punjab in order to evade tax. Narinder Singh was arrested and the aforesaid oil tanker containing furnace oil was recovered. During the course of investigation, Narinder Singh disclosed that he used to obtain bills, etc., of the firm of the petitioner who was in cahoots with them. As per allegations, the accused was cheating the government in evading tax.

Seeking quashing of the FIR, S K Jain – the counsel for the petitioner – firstly contended that no offence under the IPC was made out. Secondly, even if the allegations as levelled in the FIR were taken to be true, no criminal offence could be said to be made out, because if anybody enters Punjab from any other state through an unauthorised passage to evade tax, then only penal provisions of the penalty, etc., are provided under the VAT Act and that too if the person was apprehended at the spot along with the goods. At best, it was a case of civil nature as was provided under the Punjab VAT Act.

The bench of Justice Jasjit Singh Bedi held that there is no provision for registration of an FIR in such matters of alleged evasion of tax. The provisions of the Act only provide for mandatory penalty.

“It is a well-settled proposition of law that if a special provision has been made qua a particular subject (in the present case Value Added Tax), the said subject is excluded from the general provisions (in the present case Indian Penal Code). Since the provisions of the VAT Act do not provide for the registration of the FIR and the said Act is a code in itself, the provisions of the IPC also cannot be invoked. Therefore, quite apparently an FIR could not have been registered against a person who was said to have evaded tax,” Justice Bedi added.

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