TMI Blog2018 (6) TMI 1473X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus by issuance of notice under Rule 73 of the Second Schedule of the Income Tax Act, the petitioner is not accused of committing any non-bailable offence and the said notice does not give rise to any apprehension of immediate arrest so as to invoke the jurisdiction of the Sessions Court or High Court under section 438 of Cr.P.C. Both the constituents of section 438 of Cr.P.C. are not attracted to the facts of this case. As a result, hold that the petition under section 438 of Cr.P.C. is not maintainable. Criminal petition is dismissed. - Criminal Petition No.3668 of 2018 - - - Dated:- 26-6-2018 - MR. JOHN MICHAEL CUNHA, J. Sri. Murthy D Naik, Advocate- For the Appellate Sri. K V Aravind, Standing Counsel- For the Respondent ORDER Whether a person issued with a notice under Rule 73 of the Second Schedule of the Income Tax Act 1961 is entitled to invoke section 438 of Cr.P.C. is the question that arises for consideration in this petition. The contextual background giving rise to the above question is that a notice was issued by the Assistant Commissioner of Income Tax (OSD), the Tax Recovery Office, Bengaluru directing the petitioner to appear before h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of certain conditions. Therefore, the petitioner is not entitled to maintain the petition under section 438 of Cr.P.C. 4(2) It is further contented that against the show cause notice referred to in the petition, the petitioner has approached the High Court in W.P.14833/2018. Though interim order was requested, the same has not been granted. The petitioner is not entitled to invoke two parallel remedies in respect of the same cause of action. On this score also the petition is liable to be rejected. 4(3) Provisions of section 438 of Cr.P.C. mandates accusation of having committed a non-bailable offence. In the various notices issued by the respondent, no offence has been alleged to have been committed by the petitioner. The petitioner has not established that he has been accused of committing a non-bailable offence under any statute. Therefore, the provision of section 438 of Cr.P.C. is not attracted to the facts of this case. 4(4) The jurisdiction of this court under section 438 of Cr.P.C. could be exercised only in the event of any offences alleged to have been committed under the Indian Penal Code or any offence under other law as contemplated under section 4 of Cr.P.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and hence, the petition is liable to be rejected. 5. In the course of the argument, the learned counsels appearing for the respective parties have reiterated the very same grounds urged by them in the petition and in the objection statement submitted before the court with reference to the relevant provisions of the Income Tax Act and the Code of Criminal Procedure. Both the learned counsel submit that they have not come across any precedent on the question of the jurisdiction of the Sessions Court and the High Court to stall the arrest of the assessee under Section 438 of Cr.P.C., against whom recovery proceedings are initiated under the provisions of the Income Tax Act. 6. I have bestowed my careful thought to the contentions urged by the respective parties and have perused the documents filed along with the petition. 7. In order to resolve the controversy, a quick reference may have to be made to section 438 of Cr.P.C. It reads as under: Section 438. Direction for grant of bail to person apprehending arrest.- (1) Where any person has reason to believe that he may be arrested on accusation of having committed a non-bailable offence, he may apply to the High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant Commissioner of Income Tax (OSD) pursuant to the notice at Annexure-B . Placing reliance on section 276-C of the Income Tax Act, 1961, and part II of the First Schedule of the Code of Criminal Procedure, learned counsel has put forth a plea that an act of willful attempt to evade any tax, penalty or interest is made punishable with rigorous imprisonment for a term which shall not be less than six months, but which may extend to seven years and with fine in case where the amount sought to be evaded exceeds twenty-five hundred thousand rupees. This provision when conjointly read with Part II of the First Schedule of the Criminal Procedure Code undoubtedly renders the offence non-bailable in nature and therefore, the notice issued under Rule 73 of the Second Schedule of Income Tax Act has to be construed to have been issued in respect of the commission of a non- bailable offence. By the said notice, the respondent having threatened to arrest and detain the petitioner in civil prison, there is well founded apprehension of arrest within the meaning of Section 438 Cr.P.C., and therefore the petitioner is entitled for a protection order under Section 438 of Cr.P.C. 10. The argum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 280-D reads: 280-D- Application of Code of Criminal Procedure, 1973 to proceedings before Special Court.- (1) Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) (including the provisions as to bails or bonds), shall apply to the proceedings before a Special Court and the person conducting the prosecution before the Special Court, shall be deemed to be a Public Prosecutor. 12. From the above provisions, it is clear that the offences under the Income Tax Act are triable only by the Special Court and while trying the offences under the said Act, the Special Court is required to follow the Code of Criminal Procedure including the provisions of bail and bonds. But the facts of the present case are entirely different. The petitioner is not sought to be prosecuted for the offence under Section 276-C of the Income Tax Act. The records reveal that the tax liability or the evasion of the tax by the petitioner is already adjudicated by the competent authority and a certificate has been issued under section 222 of the Income Tax Act. 13. The notice under Rule 73 is issued for the recovery of the tax dues determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sub-rule(1), the Tax Recovery Officer may issue a warrant for the arrest of the defaulter. 15. Even though the petitioner has invoked the jurisdiction under section 438 Cr.P.C. on the supposition that the said notice has given rise to reason to believe that he would be arrested and detained by the Tax Recovery Officer, yet the following Rules completely dispels the apprehension entertained by the petitioner. In this regard, a mere glance at Rules 74 to 76 would show that elaborate procedure has been prescribed under the Second Schedule of the Income Tax Act regarding the arrest and detention of a defaulter. The said Rules are reproduced herebelow and they read: Rule 74- When a defaulter appears before the Tax Recovery Officer in obedience to a notice to show cause or is brought before the Tax Recovery Officer under rule 73, (the Tax Recovery Officer shall give the defaulter) an opportunity of showing cause why he should not be committed to the civil person. Rule 75- Custody pending hearing- Pending the conclusion of the inquiry, the Tax Recovery Officer may, in his discretion, order the defaulter to be detained in the custody of such officer as the Tax Recovery Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 specifically provides that no order for the arrest and detention in a civil prison of a defaulter could be made unless the Tax Recovery Officer has issued and served a notice upon the defaulter calling upon him to appear before him on the date specified in the notice and to show cause as to why he should not be committed to civil prison. When a defaulter appears before the Tax Recovery Officer, he shall be given an opportunity of hearing and only thereafter, an order could be passed for detention of the defaulter in the civil prison. Therefore, the apprehension of the petitioner that on issuance of a show cause notice under Rule 73 of the Second Schedule of the Income Tax Act, he has a reason to believe that he would be arrested and detained in prison is wholly misconceived and misplaced. 18. In the light of the above discussion, I hold that by issuance of notice under Rule 73 of the Second Schedule of the Income Tax Act, the petitioner is not accused of committing any non-bailable offence and the said notice does not give rise to any apprehension of immediate arrest so as to invoke the jurisdiction of the Sessions Court or High Court under section 438 of Cr.P.C. Both the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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