The High Court of Punjab and Haryana at Chandigarh has recently held that in case of tax evasion FIR cannot be registered as the VAT Act does not have provisions authorizing the same.
Petitioner Deepak Kumar filed the petition for quash the FIR registered by the police under section 420/120- IPC and Section 4 of Punjab Tax on Entry of Goods into Local Areas Act, 2000. The petitioners were arrested by the police when they are bringing furnace oil made from tyres from Haryana and using secret/abandoned passages for the purposes of entry into Punjab in order to evade tax. An FIR was filed for cheating the Government in evading tax, they were doing illegal acts.
The petitioner challenged the FIR before the High Court contending that no offence under the IPC was made out. It was further contended that as per the provisions of the VAT Act, a person without documents or with no genuine documents carrying the articles in the goods vehicle is liable to be punished with penalty of 30% of the value of the goods.
Allowing the petition, Justice Jasjit Singh Bedi observed that “a perusal of the aforementioned judgments would show that there is no provision for registration of an FIR in such like matters of alleged evasion of tax. The provisions of the Act only provide for mandatory penalty. It is 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.”
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