Ease of Doing Business - FIR for alleged default in payment of Service Tax
THE charge against the assessee is that it owed an amount of Rs. 1,05,705 as Service Tax. And the Department filed an FIR in a Police Station. Ingenious indeed! Consequent to the FIR, charge was ordered to be framed against the assessee. And the FIR and the charge were not closed even after the assessee paid this disputed amount of Service Tax.
The matter reached the High Court.
In the High Court, the State argued that when the impugned FIR was registered against the petitioner, he was found to have committed an offence under Section 406 IPC, while not depositing the amount of Rs.1,05,705/- on account of service tax. So far as factum of deposit of said amount by the petitioner was concerned, the said fact alone would not absolve the petitioner from his criminal liability.
When a pointed question was put to the counsel for the State, as to how the impugned FIR was registered under the general provisions of IPC, when the Act of 1994 was a special Act, which would prevail upon the general provisions, he had no answer.
The High Court observed,
This Court feels no hesitation to conclude that once the Act of 1994 was a special and complete Code in itself, wherein even the procedure for penalty has been provided, governing the fact situation as obtaining in the present case, registration of the impugned FIR was nothing but abuse of process of Court and the same cannot be sustained.
It can be safely concluded that continuation of the criminal proceedings arising out of the impugned FIR, would certainly result in further abuse of process of Court, therefore, the same cannot be sustained, for this reason as well .
But look at the innumerable ways to harass an assessee in India.
Section 406 of the IPC reads as:
Punishment for criminal breach of trust: Whoever commits criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both .