Telangana High Court (Photo: Twitter)
Hyderabad: The Telangana High Court quashed a criminal case against an accused person under the Central Excise Act for the want of a mandatory sanction. Justice K. Surender was hearing a quash petition filed by Stackline Systems and its managing director Sanjay Goel.
The Deputy Commissioner (Legal) of Central Excise and Service Tax filed a complaint before the special judge for economic offences on charges of evading central excise duty in the guise of trading of modular furniture, falling under the heading 9403 of the First Schedule to the Central Excise Tariff Act, 1985, even after crossing the threshold exemption limit and were liable under Section 9 of the Central Excise Act. The further allegation against the petitioner is non-payment of duty to an extent of Rs. 32,29,153 on the valuation of Rs. 1,97,86,473.
It is the case of the petitioner that prosecution is bad in law since no proposal was made for prosecuting the second petitioner. Further, the sanction orders were not filed along with the complaint.
Dealing with the crucial issue on the sanction for prosecution, Justice Surender observed that any sanction required to be issued by a specified authority, which would be the competent authority, the documents pertaining to the case have to be examined by such competent authority and proceedings have to be issued by giving reasons as to why prosecution has to be launched.
A duty is cast upon the competent authority to apply its mind to the facts of the case to grant sanction. A statute requiring sanction to be made is for the purpose or ensuring that criminal prosecution is not launched vexatiously or improperly or in a routine manner or when no offence is made out.
The competent authority has to shoulder the responsibility of scrutinising the available material and record its satisfaction to criminally prosecute a person. The grant of sanction was described as a solemn and sacrosanct act by the Supreme Court in various judgments.
He declared that “The prosecution instituted without a proper sanction would fail since the proceedings would be void for want of a valid sanction. The court cannot take cognizance of an offence until the prerequisite of sanction is fulfilled by the prosecution and filed before the court.”
He further said that a mere letter conveying that the Chief Commissioner had accorded administrative approval for launching criminal prosecution cannot be a valid document to launch prosecution against the petitioners.
HC dismisses two revision petitions, costs imposed
Justice T. Vinod Kumar of the Telangana High Court dismissed two revision petitions filed by realtor company Narne Estates and imposed a cost of Rs. 30,000.
Narne Estates sought reopening of suit filed against it by G. Swarjya Lakshmi and another and for summoning two defendants as witnesses. The appointment was made by the II Additional District Judge, Medchal in 2023, though the suit was filed in 2006.
Justice Vinod Kumar pointed out how even earlier the petitioner was shown indulgence.
A perusal of the affidavit filed along with the interlocutory applications is wholly bereft of any reason for either failing to file a list of witnesses under Order 16 Rule 1 of the Code or for not preferring the instant application at the earliest opportunity.
Even during the course of the hearing, no reason was forthcoming regarding the inability to either file a list of witnesses or the underlying application at an earlier time. Therefore, this court is of the view that the petitioner herein failed to show sufficient cause for the trial court to exercise its discretionary powers, the judge said.
Dealing with another real estate company and a party to the suit, Medhalashmi Estates, which was respondent No 7, the judge said: “It is not out of place to note that the petitioner and the respondent No. 7 herein seem to be in an alliance of convenience for contesting the present litigation jointly. However, this court is refraining from delving into the nature of their corporate relationship, as the fact of their alliance of convenience in the underlying suit can also be observed from the fact that the petitioner and the respondent No.7 herein had always filed joint interlocutory applications up until the point of filing C.M.A. No. 268 of 2022. Thereafter respondent No.7 preferred a fresh application in I.A. No.96 of 2022 seeking to reopen the defendant evidence permitting DW-3 to further lead evidence on behalf of Defendant No. 6 and 7”.
“This court is of the view that the underlying applications are nothing but dilatory tactics intending to frustrate the ends of justice,” Justice Vinod said.
The suit in the present case was instituted in 2006 and the evidence of the plaintiff was closed in July 2007. Thereafter, the matter stood posted for the evidence of the defendants for over 15 years. That apart, the issue of reopening the evidence of defendants Nos. 6 & 7 was re-agitated on multiple occasions before the Trial Court and this Court over the last five years. Therefore, this court is of the view that exemplary costs ought to be levied on the petitioner for abuse of process of law, he added.
The Deputy Commissioner (Legal) of Central Excise and Service Tax filed a complaint before the special judge for economic offences on charges of evading central excise duty in the guise of trading of modular furniture, falling under the heading 9403 of the First Schedule to the Central Excise Tariff Act, 1985, even after crossing the threshold exemption limit and were liable under Section 9 of the Central Excise Act. The further allegation against the petitioner is non-payment of duty to an extent of Rs. 32,29,153 on the valuation of Rs. 1,97,86,473.
It is the case of the petitioner that prosecution is bad in law since no proposal was made for prosecuting the second petitioner. Further, the sanction orders were not filed along with the complaint.
Dealing with the crucial issue on the sanction for prosecution, Justice Surender observed that any sanction required to be issued by a specified authority, which would be the competent authority, the documents pertaining to the case have to be examined by such competent authority and proceedings have to be issued by giving reasons as to why prosecution has to be launched.
A duty is cast upon the competent authority to apply its mind to the facts of the case to grant sanction. A statute requiring sanction to be made is for the purpose or ensuring that criminal prosecution is not launched vexatiously or improperly or in a routine manner or when no offence is made out.
The competent authority has to shoulder the responsibility of scrutinising the available material and record its satisfaction to criminally prosecute a person. The grant of sanction was described as a solemn and sacrosanct act by the Supreme Court in various judgments.
He declared that “The prosecution instituted without a proper sanction would fail since the proceedings would be void for want of a valid sanction. The court cannot take cognizance of an offence until the prerequisite of sanction is fulfilled by the prosecution and filed before the court.”
He further said that a mere letter conveying that the Chief Commissioner had accorded administrative approval for launching criminal prosecution cannot be a valid document to launch prosecution against the petitioners.
HC dismisses two revision petitions, costs imposed
Justice T. Vinod Kumar of the Telangana High Court dismissed two revision petitions filed by realtor company Narne Estates and imposed a cost of Rs. 30,000.
Narne Estates sought reopening of suit filed against it by G. Swarjya Lakshmi and another and for summoning two defendants as witnesses. The appointment was made by the II Additional District Judge, Medchal in 2023, though the suit was filed in 2006.
Justice Vinod Kumar pointed out how even earlier the petitioner was shown indulgence.
A perusal of the affidavit filed along with the interlocutory applications is wholly bereft of any reason for either failing to file a list of witnesses under Order 16 Rule 1 of the Code or for not preferring the instant application at the earliest opportunity.
Even during the course of the hearing, no reason was forthcoming regarding the inability to either file a list of witnesses or the underlying application at an earlier time. Therefore, this court is of the view that the petitioner herein failed to show sufficient cause for the trial court to exercise its discretionary powers, the judge said.
Dealing with another real estate company and a party to the suit, Medhalashmi Estates, which was respondent No 7, the judge said: “It is not out of place to note that the petitioner and the respondent No. 7 herein seem to be in an alliance of convenience for contesting the present litigation jointly. However, this court is refraining from delving into the nature of their corporate relationship, as the fact of their alliance of convenience in the underlying suit can also be observed from the fact that the petitioner and the respondent No.7 herein had always filed joint interlocutory applications up until the point of filing C.M.A. No. 268 of 2022. Thereafter respondent No.7 preferred a fresh application in I.A. No.96 of 2022 seeking to reopen the defendant evidence permitting DW-3 to further lead evidence on behalf of Defendant No. 6 and 7”.
“This court is of the view that the underlying applications are nothing but dilatory tactics intending to frustrate the ends of justice,” Justice Vinod said.
The suit in the present case was instituted in 2006 and the evidence of the plaintiff was closed in July 2007. Thereafter, the matter stood posted for the evidence of the defendants for over 15 years. That apart, the issue of reopening the evidence of defendants Nos. 6 & 7 was re-agitated on multiple occasions before the Trial Court and this Court over the last five years. Therefore, this court is of the view that exemplary costs ought to be levied on the petitioner for abuse of process of law, he added.
( Source : Deccan Chronicle )
Next Story
