Criminal Prosecution and Proceedings under the Bihar VAT Act are Independent though both are on Same Grounds: Patna HC [Read Judgment]

The Patna High Court, in a recent ruling, held that the prosecution in criminal law and proceedings arising under the Bihar Value Added Tax Act, 2005 are undoubtedly independent proceedings and, there is no impediment in law for the criminal proceedings to proceed even during the pendency of the proceedings under the Bihar Value Added Tax Act, 2005.

In the instant case, an FIR was lodged against the petitioner companies on the basis of the complaint of the Commercial Taxes Officer, Jalalpur alleging that one of them was carrying goods loaded on trucks and were intercepted at the check post, whereafter the builty (chalan) and bill produced were inspected and it was found that the TIN number of the purchaser mentioned on the bill was not valid. The department found was the aforesaid forgery was committed with an intention to evade tax for which penalty proceedings under Sections 60(3) and Section 31(2) of the Bihar Value Added Tax, 2005 was initiated.

Before the High Court, the petitioners vehemently contended that penalty proceedings under the VAT Act has already been initated against the petitioners, the FIR needs to be quashed since it amount to double jeopardy.

Justice Mohit Kumar Shah noted that the prosecution in criminal law and proceedings arising under the Bihar Value Added Tax Act are undoubtedly independent proceedings and therefore, there is no impediment in law for the criminal proceeding to proceed even during the pendency of the proceedings under the Bihar Value Added Tax Act, 2005.

Relying on the Apex Court decision in Commissioner of Income Tax, Mumbai vs. Bhupendra Champak Lal Dalal and Another, the Court said that it is a trite law that the same fact in a proceeding can constitute offence under two different laws and an act or omission can amount to an offence under the Indian Penal Code and at the same time constitute an offence under any other law.

Dismissing the petition, the Court concluded that “In the present case, while the petitioner is being proceeded under the Bihar Value Added Tax Act, 2005, for concealing or failing to disclose full and correct particular of sale or purchase etc. as well as for evasion of tax, the present prosecution has been launched under various sections of the Indian Penal Code for committing forgery and cheating by furnishing invalid and false TIN number of the purchaser on the bill. Thus, the offence under the provisions of the Bihar Value Added Tax Act were, it seems, consequent to the offences under the Indian Penal Code, which ostensibly were committed first. Hence, in the present case, the same set of facts definitely constitute offence under two different law i.e. one under the Indian Penal Code and other under the Bihar Value Added Tax Act, 2005, thus neither Article 20(2) of the Constitution of India has any relevance to the present case nor the present criminal prosecution can be said to be barred or a case of double jeopardy, much less liable to be quashed, therefore, there is no merit in the contention raised by the petitioner herein.”