Kolkata: The Calcutta High Court has quashed a criminal prosecution launched by the Income Tax Department over alleged non-payment of tax deducted at source dating back to the early 1980s, after finding that the offence had already been compounded and that arrest warrants were issued even against a deceased accused.
The ruling by Justice Uday Kumar, who examined the record of a case arising from a search operation conducted in 1983, following which criminal proceedings were initiated alleging failure to deposit TDS. The prosecution was filed in 1986 and later stayed by a Division Bench in 1988 while a compounding application filed by the accused remained pending.
Court records show that the Revenue quantified the compounding fee in 2001, which was paid by the company. An additional interest demand raised subsequently was also cleared in July 2017, exhausting all financial claims of the department.
However, the trial court revived the long-pending prosecution after a prolonged period of inactivity. In 2016, it issued warrants of arrest and ordered attachment of property, proceeding on the assumption that no stay was in force.
The High Court noted that one of the arrest warrants was issued against an accused who had already died. It also recorded that attachment orders were passed even after the department’s dues had been fully paid.
The court further observed that the Income Tax Department failed to appear or contest the revisional proceedings despite repeated calls, compelling the court to decide the matter on the basis of the available records.