TMI Blog1993 (4) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... man-cum-managing director of petitioner No. 1 during the assessment year 1985-86. The company filed a return of income for the aforesaid assessment year on July 30, 1985, declaring a loss of Rs. 91,55,88,488 along with various statements, accounts and other documents. They claimed depreciation allowance to the tune of Rs. 5,07,59,917 in respect of the Padam Polyester Division as they claimed to have installed a new plant and machinery. Trial production was alleged to have been started in March, 1985. It was further claimed that part of the plant and machinery was installed in the Nylon Division of this unit where production had started in various divisions between June 28, 1984, and September 13, 1984, with uninterrupted power supply system.Other part of the plant and machinery was claimed to have been installed in the same division in which production had started on March 30, 1985. Various supporting ledgers, project registers, etc., were also produced. Thus, the company also claimed investment allowance to the tune of Rs. 3,72,697. The plant was stated to have been inaugurated on March 21, 1986. But the enquiries conducted by the Assessing Officer revealed that the plant and mach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eve to be true and thus had committed offences under sections 276C(1). 277 read with section 278B of the Act. I have heard arguments advanced by learned counsel for the parties. The first contention raised on behalf of the petitioners is that even if all the allegations and contentions set out in the complaint are taken as correct and proved, even then no case of evasion or attempted evasion of tax by the petitioner company was made out. In support of this proposition my attention has been drawn to three cases, namely, Madhu Limaye v. State of Maharashtra, AIR 1978 SC 47, State of U. P. through C. B. I S. P. E. v. R. K. Srivastava, AIR 1989 SC 2222, and Madhavrao Jiwaji Rao Scindia v. Sambhajirao Chandrojirao Angre [1988] 1 SCC 692 ; AIR 1988 SC 709. In the first case the bare facts were that in a press conference at New Delhi, on September 27, 1974, the appellant was said to have made certain statements and handed over a " press hand-out " containing allegedly some defamatory statements concerning Shri A. R. Antulay, the then Law Minister of the Government of Maharashtra. Those statements were published in various newspapers. The State Government decided to prosecute the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at an order rejecting the plea of the accused on a point which, when accepted, will conclude the particular proceeding, will surely be not an interlocutory order within the meaning of section 397(2) ". From the rule of law laid down by the Supreme Court in this case it is, therefore, clear that the mere order of summoning by a Magistrate is purely an interlocutory order. But when a challenge is made to that order by moving a proper application before the Magistrate against the order of summoning and such a prayer is rejected by the Magistrate, such order will no longer remain within the domain of interlocutory orders. It may be noted that in the present case the order of summoning by the Magistrate has not at all been challenged by the petitioners before the learned A. C. M. M. Simply after receiving summons from his court, the petitioners have challenged that order under section 482 of the Code and, therefore, even according to this authority, the summoning order being an interlocutory order could not have been challenged straightaway before this court. In the second case of State of U. P. through C. B. L S. P. E., AIR 1989 SC 2222, an F. I. R. was lodged under sections 120B, 420, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se wherein there are serious allegations against the petitioners according to which they claimed huge depreciation and installation allowances in respect of plant and machinery which were allegedly not at all installed during the relevant period. In fact, if proceedings are quashed in such case at an initial stage, it may rather amount to a travesty of justice and encourage people who, without actually installing plant and machinery, claim certain tax benefits in regard to such installation and later on come forward with such a petition when they are pushed to the wall. The position of law as laid down in the above-referred three authorities has been further clarified in the case of K. M. Mathew v. State of Kerala, AIR 1992 SC 2206 ; [1991] 4 JT 464 (SC) to the effect that an accused person against whom summons has been issued in pursuance of a complaint, can apply before the Magistrate for recalling or rescinding that order because the order issuing the process is an interim order and not a judgment. In that situation, the Magistrate may drop the proceedings if he is satisfied on a reconsideration of the complaint that there is no offence for which the accused could be tried. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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