HON’BLE Dr. JUSTICE K.G.SHANKAR Criminal Petition No.5835 of 2014 Date: 03-6-2014 Between Gajula Venkateswara Rao … Petitioner/ Accused and The State of A.P., Rep. by Public Prosecutor, High Court of A.P., Hyderabad … Respondent The Superintendent (SIV), Customs, Central Excise and Service Tax, Service Tax Range-2, Vijayawada Division, Central Revenue Building, M.G.Road, Vijayawada … Respondent/Complainant HON’BLE Dr. JUSTICE K.G.SHANKAR Criminal Petition No.5835 of 2014 Order:
The petitioner seeks for quashment of C.No.I/ST/10/01/2014-STC on the file of the Superintendent (SIV), office of the Assistant Commissioner of Customs, Central Excise and Service Tax, Vijayawada Division.
2. It is the case of the petitioner that a case is pending before the Customs, Central Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore and that as the case is pending already under the provisions of the Finance Act, 1994, it would not be appropriate to permit the 2nd respondent to launch prosecution against the petitioner.
3. The learned Standing Counsel for the 2nd respondent, on the other hand, submitted that prosecution has not been launched so far and that the investigation is in progress.
4. The learned counsel for the petitioner placed reliance upon a decision of this Court in Criminal Petition No.6053 of 2009 (L.G.Varadarajulu v. Government of A.P.), dated 10-8-2009. A learned Single Judge of this Court observed that when proceedings are pending before the Income Tax Authorities, it would be appropriate to postpone criminal proceedings where the conclusions arrived at by the Appellate Authority have a relevance and bearing on the conclusions to be reached in the criminal case. It was observed in Commissioner of Income-tax v. Bhupen Champak Lal
[1]
Dalal that criminal proceedings cannot be quashed but can be suspended during the pendency of proceedings before the concerned Tribunal.
5. The learned Standing Counsel for the 2nd respondent, on the other hand, placed reliance upon
[2]
SASI ENTERPRISES v. CIT where it was noticed that pendency of appellate proceedings relating to the assessment cannot be a bar for initiating prosecution under Section 276-CC of the Income Tax Act, 1961.
It would appear that the judicial view is that when a proceeding is pending before the concerned Tribunal/ Appellate Tribunal, it would not be appropriate to proceed with the prosecution of the case; but it would not act as a bar, first, to undertake investigation and secondly, to initiate prosecution. What is suggested is that proceeding with the prosecution during the pendency of prosecution before the Appellate Tribunal is not justified.
6. The learned Standing Counsel for the 2nd respondent submitted that prosecution has not been initiated against the petitioner so far and that the petitioner has not been cooperating with the investigation by failing to furnish Income Tax Returns and Service Tax Returns.
7. In view of the decisions referred to, it would be appropriate to permit the 2nd respondent to proceed with the investigation of the case but not to launch prosecution till the proceedings before the Customs, Central Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore are concluded. I accordingly permit the 2nd respondent to proceed with the investigation as it thinks just and proper.
The 2nd respondent however is restrained from launching prosecution during the pendency of the proceedings against the petitioner before the Customs, Central Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore. The criminal petition is disposed of accordingly. The miscellaneous petitions, if any, pending in this petition shall stand closed.
Dr. K.G.SHANKAR, J.
03rd June, 2014. Ak HON’BLE Dr. JUSTICE K.G.SHANKAR Criminal Petition No.5835 of 2014 03rd June, 2014. (Ak)
[1] [2001] 248 ITR 830
[2] (2014) 5 SCC 139