Can’t register FIR for tax evasion, says Punjab and Haryana High Court

Chandigarh, December 3

The Punjab and Haryana High Court has made it clear that an FIR cannot be registered against a person accused of evading tax.

“Since the provisions of the VAT Act do not provide for the registration of FIR and the Act is a Code in itself, the provisions of the IPC also cannot be invoked,” Justice Jasjit Singh Bedi of the High Court asserted.

Provisions of VAT Act

Since the provisions of the VAT Act do not provide for the registration of an FIR and the Act is a code in itself, the provisions of the IPC also cannot be invoked. Perusal of verdicts will show the absence of a provision for the registration of an FIR in ‘such matters of alleged evasion of tax’. Justice Jasjit Singh Bedi, Punjab and Haryana HC

The assertion came as Justice Bedi quashed an FIR registered on December 5, 2013, at Mansa City-II police station for cheating and criminal conspiracy under Sections 420 and 120-B of the IPC, along with Section 4 of Punjab Tax on Entry of Goods into Local Areas Act, 2000. Final investigation report under Section 173(2) of the CrPC and all subsequent proceedings arising from it were also quashed.

The State’s stand in the matter was that the investigation had been completed and the report under Section 173 of the CrPC had been filed. As per the report, the accused were found cheating the government by evading payment of tax.

Among other things, the counsel for the petitioner had contended that offence under the provisions of the IPC was made out. At best, it was a case of civil nature as provided under the Punjab VAT Act. As per the provisions of the Act, a person without documents, or with non-genuine documents, carrying the articles in the goods vehicle was liable to be punished with penalty of 30 per cent of the value of the goods. Reliance was placed on various provisions of the VAT Act to substantiate his argument.

Referring to a plethora of judgments, Justice Bedi asserted perusal of the verdicts would show the absence of provision for registration of an FIR in “such like matters of alleged evasion of tax”.

The provisions of the Act only provided 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 the Indian Penal Code,” Justice Bedi added.

Before parting with the case, Justice Bedi added an FIR, “quite apparently” could not have been registered against a person said to have evaded tax.