VAT Act Do Not Provide For The Registration Of FIR: Punjab And Haryana High Court Quashes FIR For Alleged Tax Evasion

The Punjab and Haryana High Court has held that the provisions of the VAT Act do not provide for the registration of the FIR, and since the VAT Act is a code in itself, the provisions of the IPC also cannot be invoked. Therefore, an FIR could not have been registered against a person who has allegedly evaded tax.

The single bench of Justice Jasjit Singh Bedi has observed that there is no provision for the registration of an FIR in matters such as those of alleged tax evasion. The provisions of the act only provide for a 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, the Indian Penal Code)," the court said.

While the police party was on patrol duty in Nakabandi, a secret informer gave information that an oil truck was bringing furnace oil made from tyres from Haryana and using secret or abandoned passages for the purposes of entry into Punjab in order to evade tax. Therefore, they were committing the offense of cheating, and they had ties with one firm, Tibbi Hari Singh, who provided them with the bills of his firm, with the help of which these persons made the supplies.

The name of the firm situated at Tibbi Hari Singh Wali was Jai Jagdambey Industry. Thus, by cheating the government and evading taxes, they were committing illegal acts. Along with these individuals, there were others involved as well. Narinder Singh was going towards the side of Jalandhar with the tanker of furnace oil, and if a nakabandi was done, he could be caught along with the tanker loaded with oil without any barrier receipts.

Narinder Singh was arrested after the FIR was filed, and the oil tanker containing furnace oil was recovered. During the course of the investigation, Narinder Singh disclosed that he used to obtain bills, etc. from the firm of the petitioner, who was in connivance with them.

The petitioner, while praying for the quashing of the FIR and consequential proceedings, contended that no offense under the IPC was made out.

The petitioner contended that even if the allegations leveled in the FIR were taken to be true, no criminal offense could be made out. If anyone enters the state of Punjab from another state through an unauthorized passage in order to evade tax, the VAT Act only provides for penal provisions (penalties, etc.), and only if the person is apprehended on the spot with the goods. It was a case of a civil nature, as was provided under the Punjab VAT Act.

The court allowed the petition and quashed the FIR.

Case Title: Deepak Kumar Versus State of Punjab

Citation: CRM-M-38352-2014

Date: 29.11.2022

Counsel For Petitioner: Advocate S.K. Jain

Counsel For Respondent: DAG Ramta Choudhary

Citation: 2022 LiveLaw (PH) 314 

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