Crl.O.P.(MD).Nos.13196, 13197 and 13198 of 2016 BEFORE MADURAI BENCH OF MADRAS HIGH COURT DATED : 16.03.2020 CORAM: HONOURABLE DR.JUSTICE G.JAYACHANDRAN Crl.O.P.(MD).Nos.13196, 13197 and 13198 of 2016 and Crl.M.P.(MD).Nos.6169, 6170, 6171, 6172, 6173, 6174, 7329, 7330 and 7331 of 2016 M/S.Vasan Healthcare Private Limited, Represented by its, Chairman & Managing Director, Dr.A.M.Arun, Son of Murugaiah, 15-A, Main Road Thillai Nagar, Trichy-620 018. Petitioner in Crl.O.P.(MD).No.13196 of 2016 A.M.Arun Petitioner in Crl.O.P.(MD).No.13197 of 2016 Meera Arun. Petitioner in Crl.O.P.(MD).No.13198 of 2016 Vs. Income Tax Department, O/o.Deputy Commissioner of Income Tax, TDS Circle, Madurai 625 002, Rep. by authorized person, A.Padmameenakshi, aged 53 years, Deputy Commissioner of Income Tax Respondent in all Crl.O.Ps. COMMON PRAYER: Criminal Original Petitions filed under Section 482 of Criminal Procedure Code, to call for records in proceedings in C.C.No.23 of 2016 dated 27.11.2015 relating to Assessment Year 2013-14 on file of first respondent in Court of Judicial Magistrate No.1, Tiruchirappalli and quash same. http://www.judis.nic.in 1/6 Crl.O.P.(MD).Nos.13196, 13197 and 13198 of 2016 For Petitioners : Mr.AN.Ramanathan For Respondent : No appearance (in all Crl.O.Ps.) COMMON O R D E R Aggrieved by penal action initiated by Income Tax Department against petitioners for non remittence of TDS in time, present criminal original petitions are filed under Section 482 of Cr.P.C., to quash criminal proceedings in C.C.No.23 of 2016 dated 27.11.2015 relating to Assessment Year 2013-14 on file of first respondent in Court of Judicial Magistrate No. 1, Tiruchirappalli. 2.According to petitioners, earlier when Income Tax Department took coercive action of freezing of their bank account for non-payment of TDS due, W.P.No.39484 of 2015 was filed and interim order was granted on 11.01.2015. While so, pending disposal of said writ petition, Chief Commissioner of Income Tax has accorded sanction to prosecute petitioners invoking his power under Section 279 of Income Tax Act. said sanction order dated 04.11.2015 is challenged in this writ petition on ground that when representation of petitioner dated 19.10.2015 was under active consideration of chief commissioner, he ought to have not granted sanction to prosecute. Pursuant to http://www.judis.nic.in 2/6 Crl.O.P.(MD).Nos.13196, 13197 and 13198 of 2016 said sanction, in haste and without authority, complaint has been filed and pending in C.C.No.23 of 2016 for assessment year 2013-2014. It has to be quashed, since sanction to prosecute is violative of principles of natural justice. 3.Admittedly, in this case, petitioners Company M/s.Vasan Health Care Private Limited has not remitted TDS in time. It has partially remitted with interest but still remittence of TDS is due. Mere representation to defer action will not and cannot stop authorities proceeding in accordance to law. interim relief granted to petitioners is to operate bank account with minimum balance of Rs.1.62 Crores by itself indication that petitioners have not cleared entire due. Even otherwise, interim order of Court dated 08.01.2016, goes to show that only after coercive measure of freezing petitioners account, Income Tax Department were able to recover about Rs.8 Crores. While so, petitioners, who have failed to pay TDS in time and what little paid was paid with delay and interest cannot stale prosecution on frivolous and flimsy ground. 4.In this case, petitioners though deducted tax at source, not paid same within time prescribed. This action of initiating criminal prosecution after obtaining sanction from appropriate authority cannot be termed as violative of principles of natural justice. http://www.judis.nic.in 3/6 Crl.O.P.(MD).Nos.13196, 13197 and 13198 of 2016 5.It is relevant at this juncture to refer case of Madhumilan Syntex Ltd., and another Vs. Union of India and another reported in 2007 (11) SCC 297, wherein Directors of Company approached Court seeking quash of criminal prosecution on ground that tax deducted at source was paid with interest and there was reasonable cause of belated payment, Honourable Supreme Court after extracting relevant provisions of Income Tax Act, has held as follows: ''47.The next contention that since TDS had already been deposited to account of Central Government, there was no default and no prosecution can be ordered cannot be accepted. Mr.Ranjit Kumar invited our attention to decision of High Court of Calcutta in Vinar & Co v. ITO [(1992) 193 ITR 300 (Cal)]. Interpreting provisions of Section 276-B, Single Judge of High Court observed that : (ITR p.315) ''[T]here is no provision in Income Tax Act imposing criminal liability for delay in deduction or for non-payment in time. Under Section 276-B, delay in payment of income tax is not offence.'' According to learned Judge, such provision is subject to penalty under Section 201(1) of Act. 48.We are unable to agree with above view of High Court. Once statute requires to pay tax and stipulates period within which such payment is to be made, payment must be made within that period. If payment is not made within that period, there is default and appropriate action can be taken under Act. Interpretation canvassed by learned http://www.judis.nic.in 4/6 Crl.O.P.(MD).Nos.13196, 13197 and 13198 of 2016 counsel would make provision relating to prosecution nugatory.'' 6.Following dictum laid down by Hon'ble Supreme Court in Madhumilan Syntex case [supra], these Criminal Original Petitions are dismissed. Consequently, connected Miscellaneous Petitions are closed. 7.At this juncture, learned counsel appearing for petitioners would submit that personal appearance of petitioners 2 and 3 before trial Court may be dispensed with unless their appearance before Court is essential and warranted. 8.Taking into consideration of said request, petitioners 2 and 3 are given liberty to file petition under Section 205 Cr.P.C., and if any such application is filed, learned Magistrate may consider such application and pass appropriate orders. 16.03.2020 Index : Yes / No Internet : Yes / No vsg To Judicial Magistrate No.1, Tiruchirappalli. http://www.judis.nic.in 5/6 Crl.O.P.(MD).Nos.13196, 13197 and 13198 of 2016 DR.G.JAYACHANDRAN, J. vsg Crl.O.P.(MD).Nos.13196, 13197 and 13198 of 2016 and Crl.M.P.(MD).Nos.6169, 6170, 6171, 6172, 6173, 6174, 7329, 7330 and 7331 of 2016 16.03.2020 Vasan Healthcare Private Limited v. Income-tax Department, O/o. Deputy Commissioner of Income-tax, TDS Circle, Madurai