Jhoomarmal Dhanraj versus Assistant Commercial Taxes Officer

http://courtnic.nic.in/jodh/judfile.asp?ID=CR&nID=42&yID=2007&doj=7/1/2008


1
SALES TAX REVISION PETITION NO.42/2007
M/s. Jhoomarmal Dhanraj
Vs.
ACTO, Ward-III, Circle -C, Jodhpur


Date of Order :: 1st July 2008

HON'BLE MR. JUSTICE DINESH MAHESHWARI

Mr.Dinesh Mehta for the petitioner
Mr.Rishabh Sancheti for
Mr.V.K.Mathur for the respondent

....

BY THE COURT:

By way of this revision petition, the petitioner-dealer
seeks to question the order dated 28.03.2006 as passed by
the Rajasthan Tax Board, Ajmer in Appeal No.700/2005
whereby, while setting aside the order dated 24.02.2005 as
passed by the Dy. Commissioner (Appeals), Bikaner, the order
dated 14.10.2003 as passed by the Assessing Authority under
Section 78 (5) of the Rajasthan Sales Tax Act, 1994 ('the Act
of 1994') has been restored.

Briefly put, the background facts and relevant aspects of
the matter are that on 11.10.2003 a truck bearing registration
No.RJ 19 G 2026 coming from Nokha to Jodhpur was checked
at Nagaur road by the empowered authorities under the Act of
1994 and upon demanding the documents, a bilti of M/s.
Kamal Road Lines, Nokha dated 11.10.2003 and a bill issued


2


2

particulars of the goods were stated in the bill as '....
.
.
.S.T.F.(.....)'. The authorities checked the vehicle
and found it carrying damaged Moong and Urad; and
observed that the goods in question were liable to tax as pulse
but were wrongly sold as tax free goods in the name of ‘cattle
feed’. Hence, a notice under Section 78(4) (a) of the Act of
1994 was issued.

On 12.10.2003, the owner of dealer firm produced three
purchase bills dated 24.12.2002, 28.01.2003, and 31.01.2003
wherefrom it was noticed that earlier the dealer was
purchasing the goods in the name 'Moong Dal Damage' but
later on got it stated as 'Moong Dal Cattle Feed'. The
authorities formed the opinion that there had been a false
declaration where the goods in question were stated tax free
goods; and issued notice under Section 78(5) of the Act of
1994. The dealer submitted a reply to the notice that he had
dispatched ‘damaged Moong Dal (Cattle Feed)’ and to his
impression, it were sales tax free; and prayed that the matter
be decided immediately.


3


3

The aforesaid order passed by the Assessing Authority
was, however, reversed by the Dy. Commissioner (Appeals)
on 24.02.2005 while accepting the appeal filed by the dealer
with the observations that the commodity in question had been
‘wastage of Moong Dal’, which is not used for human
consumption and is used as cattle feed; and remains exempt
from tax as such. The learned Dy. Commissioner (Appeals)
also observed that the Assessing Authority had not stated any
reason wherefor it were treated to be a case of the goods
meant for human consumption.

The matter was taken in appeal by the Department to
the Tax Board against the order so passed by the Dy.
Commissioner (Appeals). The dealer-petitioner did not appear


4


4


“.........................

..
.."...#.....
.
..%.&.'......."..
..%..*+......0.........*....#...
...
....567....#......9.#9

............
.......*.....#...;...%......

...#.........
........6..

"..............9...6..
.;..
..".7....6
...
...69...........#........

.7"6


5


5


.......
.7......#..#....7......
......6
..................
..
...#....
.9....56.7..........7.......*...
(...) ...................%..

.."


......#.;.9....K.......... ...78(4) .

.............#.

..........

."
.....6....#..................9."

Seeking to assail the order aforesaid, learned counsel
for the petitioner strenuously contended that the consignment
in question had admittedly been of damaged Moong Dal; and
such damaged Moong Dal being not fit for human
consumption, its natural use remains that of cattle feed and
was rightly dealt with as such by the petitioner-dealer. Learned
counsel submitted that when nothing was concealed by the
dealer and description of goods as damaged Moong Dal was
not found incorrect, the Assessing Authority could not have
levied tax and inflicted penalty merely because of his different
opinion about the description of the goods. Learned counsel
further submitted that in the proceedings under Section 78 of
the Act of 1994, the authority concerned could not have
decided on the question of taxability or rate of tax applicable
on the goods for the scope of enquiry being limited to consider
if the requisite documents were not furnished or if the
documents were false. According to the learned counsel, all
the requisite documents were furnished complete in all


6


6

Learned counsel appearing for the Department
vehemently opposed with the submissions that the likely use
of the commodity cannot be decisive on its liability for taxation
and it is the classification of the goods that matters; that goods
in question being pulse, Moong Dal, were subject to sales tax
as such and merely by suggesting the consignment in
question to be of damaged pulse, the dealer could not have
declared it to be a cattle feed so as to evade tax. In support,
learned counsel referred to the decision of this Court in Gotilal
Bhonrilal (supra). Learned counsel further submitted that it is
very much within the domain of the authority concerned to
check the correctness of the documents and in the given case,
also to examine the question of taxability of goods. Learned


7


7

Learned counsel for the petitioner rejoined with the
submissions that if the contentions as urged on behalf of the
Department were to be accepted, it would lead to an
unacceptable result that all the exercise of regular assessment
would be undertaken in the proceedings under Section 78 of
the Act of 1994, something not contemplated by the statute.
Learned counsel submitted that the said provision being
essentially meant to check evasion of tax during
transportation, any dispute about taxability of goods, by its
very nature, has to be left to be determined during regular
assessment proceedings.

Having considered the rival submissions, this Court is
clearly of opinion that this revision petition remains bereft of
substance. The observations and findings of the Rajasthan
Tax Board as reproduced hereinbefore remain


8


8

The main plank of the submissions on behalf of the
dealer is that the goods in question being damaged pulse,
named 'Moong Dal Damaged', were purchased as cattle feed
and were sold as cattle feed, therefore, there had been no
false declaration in the documents in question. The
submission is fundamentally incorrect. The commodity
concerned had been nothing but a pulse, Moong Dal. Its
quality, be it excellent, or good, or average, or bad, or
damaged, in any event, would not alter its character as that of
a pulse. Even if it be assumed that the goods in question had
been ‘damaged Moong Dal’, it does not ipso facto lead to the
result that the so-called damage had changed the character of
the commodity from pulse to cattle feed. It cannot be assumed
that as soon as Moong Dal is damaged, it gets reduced to, or
turns into, a cattle feed and cannot be used for human
consumption at all.

In the case of Gotilal Bhonrilal (supra) this Court
rejected the contention that Urad and Gram be treated as
cattle feed and exempt from tax; and this Court held that the
Board was right, with reference to the fact that Urad and Gram
are primarily used for human consumption and it is only
incidental that these commodities are also used as the


9


9

The entire case of the present petitioner is founded on
incorrect premise where the petitioner makes assumptive
submission that natural use of damaged Moong Dal is that of
cattle feed. This Court is unable to find any basis for such
assumption and any rationale behind such submission. The
natural and primary use of Moong Dal being for human
consumption, its incidental or alternative use, say because of
some qualitative change, has no bearing on its classification
for the purpose of taxability; and in any case, it cannot be
classified as cattle feed merely with reference to the so-called
damage. Thus, the description of the goods in the bill and bilti
accompanying the consignment was incorrect where a taxable
commodity (Moong Dal) was described as a non-taxable one
(Cattle Feed).

Once it was found that the goods were not correctly
described in the documents that stated a taxable commodity
as a non-taxable one, such documents were incorrect on the
relevant facts and material particulars; and could only have
been termed as false. The present one was clearly a case of
submission of false documents and the goods in movement
being not accompanied by true and faithful documents. The


10


Assessing Authority has not committed any error in imposing
penalty in this case.

The decision in M/s Maheshwari Minerals & Chemicals
(supra) has no co-relation with the case at hands. Therein, the
Assessing Authority held the assessee liable to pay tax on his
products, which, as per the order of Assessing Authority were
stone powder and chips and which, according to the assessee,
were poultry feed, ‘murgidana’. The Dy. Commissioner
(Appeals), however, held that the assessee was not given
opportunity of hearing and proceeded to remand the matter
but with certain observations that if it be found that the product
of the assessee is used as poultry feed either independently or
by mixing in other poultry feed, then the assessee be given
benefit under the relevant notification. Aggrieved with such
observations, the department preferred appeal to the Tax
Board; and the Tax Board proceeded to allow the appeal with
the finding that the product in question was not a poultry feed.

In the revision petition as preferred by the assessee, this
Court did not approve of the decision of the Tax Board where,
even without setting aside the finding of the Dy. Commissioner
that the assessee was denied opportunity of hearing before
the Assessing Authority, the order of remand as made by the
Dy. Commissioner (Appeal) was interfered with and the Tax
Board decided the question itself that the product in question


11


was poultry feed or not. This court held that entire issue should
have been sent to the Assessing Authority for deciding after
opportunity of hearing to both the parties; and this Court
observed that opportunity of hearing having not been extended
to the assessee, there was no factual foundation with the
Assessing Authority and the department too had no
opportunity to meet with the grounds whereupon the assessee
claimed his product to be the poultry feed. This Court set aside
the order passed by the Tax Board; and directed that the
Assessing Authority shall decide the issue in accordance with
law after opportunity of hearing to both the parties and
uninfluenced by any of the observations made by the Dy.
Commissioner (Appeals) or by the Tax Board.

In the aforesaid order, this Court has never decided that
use of the product by the particular purchaser would be
decisive of its nature and classification; and it was left to be
determined by the Assessing Authority as to whether the
product was ‘poultry feed’ as claimed by the assessee without
being influenced by the observations made by the appellate
authorities including those of the Dy. Commissioner (Appeals).
It is noticeable that in the said case, the tenor of the
observations of the Dy. Commissioner (Appeals) had been as
if the end use of product by the particular purchaser would be
decisive of the nature of the product in question but those


12


observations were not approved as such by this Court; and
this Court only observed that in the given situation the Dy.
Commissioner (Appeals) ‘rightly held that the product of the
assessee, if is found as poultry feed, then the assessee is
entitled the benefit’. This Court has not said that the finding as
to whether it were a poultry feed would be reached with
reference to the end use of the product. The question of
classification of the product was left to be determined by the
Assessing Authority, and to be determined without being
influenced by what was said by the Dy. Commissioner
(Appeals). The said decision in M/s Maheshwari Minerals‘s
case has no bearing on the question at hands nor supports the
case of the present petitioner.

The arguments relating to the scope of proceedings
under Section 78(5), in the fact situation of the present case,
do not carry even a technical value what to say of substance.
Apart from other aspects that the goods in movement should
be supported by the requisite documents, and such
documents should be produced at the time of checking, the
requirement further remains that the concerned documents
should not be false; and for submission of false document or
declaration, one incurs the liability for penalty. The documents
produced in the present case declared a commodity liable to
taxation (Moong Dal) as something not liable to taxation


13


(Cattle Feed). The declaration and thereby the documents
were, therefore, false and the petitioner having knowingly and
deliberately drawn such documents cannot escape the liability
under Section 78 (5) of the Act of 1994. The submission that
such enquiry as to determine the question of taxability of
goods in question cannot be made in the proceedings under
Section 78 is not correct. Whether a declaration is correct or
not is definitely within the domain of the Authority concerned to
examine while proceeding under Section 78 of the Act of 1994.
A declaration stating a taxable commodity as non-taxable one
by giving a different name to the commodity is the mischief
very much within the ambit of Section 78 of the Act of 1994;
and enquiry into the correctness of the particulars of the goods
as stated in the documents and, as a necessary corollary, into
the aspect of taxability of such goods, is squarely within the
ambit and scope of the proceedings under Section 78 of the
Act of 1994.

It is noticed that the learned Dy. Commissioner
(Appeals) had gone even farther than the case of dealer and
termed the goods in question as ‘wastage of Moong Dal’
without appreciating that there is essential difference in the
two terms, ‘wastage’ and ‘damaged’. A damaged material
does not, by the damage itself, become wastage. The dealer
himself never claimed it to be the ‘wastage of Moong Dal’. The


14


learned Dy. Commissioner (Appeals) further proceeded on
unwarranted and baseless assumption that the goods in
question were not meant for human consumption and were
used as cattle feed. The Tax Board has not committed any
error in reversing the order passed by the Dy. Commissioner
(Appeals) that proceeded on fundamentally incorrect premise.

It may in the passing be observed that apart from the
facts as noticed by the Assessing Authority that in the two bills
dated 24.12.2002 and 28.01.2003 the petitioner purchased the
commodity in question as 'Moong Dal Damage' and the
expression ‘cattle feed’ got inserted only in the later bill dated
31.01.2003, noticeable further it is that the goods in question
were sold by the petitioner dealer only on 11.10.2003. It is
difficult to even co-relate the said purchase bills of the month
of December 2002 and January 2003 with the sale effected as
late as in the month of October 2003, of the goods said to be
‘damaged’ Moong Dal.

Viewed from any angle, there appears no reason to

consider any interference in this case.
The revision petition fails and is, therefore, dismissed.

No costs.

(DINESH MAHESHWARI), J.

MK

Jhoomarmal Dhanraj versus Assistant Commercial Taxes Officer

http://courtnic.nic.in/jodh/judfile.asp?ID=CR&nID=42&yID=2007&doj=7/1/2008


1
SALES TAX REVISION PETITION NO.42/2007
M/s. Jhoomarmal Dhanraj
Vs.
ACTO, Ward-III, Circle -C, Jodhpur


Date of Order :: 1st July 2008

HON'BLE MR. JUSTICE DINESH MAHESHWARI

Mr.Dinesh Mehta for the petitioner
Mr.Rishabh Sancheti for
Mr.V.K.Mathur for the respondent

....

BY THE COURT:

By way of this revision petition, the petitioner-dealer
seeks to question the order dated 28.03.2006 as passed by
the Rajasthan Tax Board, Ajmer in Appeal No.700/2005
whereby, while setting aside the order dated 24.02.2005 as
passed by the Dy. Commissioner (Appeals), Bikaner, the order
dated 14.10.2003 as passed by the Assessing Authority under
Section 78 (5) of the Rajasthan Sales Tax Act, 1994 ('the Act
of 1994') has been restored.

Briefly put, the background facts and relevant aspects of
the matter are that on 11.10.2003 a truck bearing registration
No.RJ 19 G 2026 coming from Nokha to Jodhpur was checked
at Nagaur road by the empowered authorities under the Act of
1994 and upon demanding the documents, a bilti of M/s.
Kamal Road Lines, Nokha dated 11.10.2003 and a bill issued


2


2

particulars of the goods were stated in the bill as '....
.
.
.S.T.F.(.....)'. The authorities checked the vehicle
and found it carrying damaged Moong and Urad; and
observed that the goods in question were liable to tax as pulse
but were wrongly sold as tax free goods in the name of ‘cattle
feed’. Hence, a notice under Section 78(4) (a) of the Act of
1994 was issued.

On 12.10.2003, the owner of dealer firm produced three
purchase bills dated 24.12.2002, 28.01.2003, and 31.01.2003
wherefrom it was noticed that earlier the dealer was
purchasing the goods in the name 'Moong Dal Damage' but
later on got it stated as 'Moong Dal Cattle Feed'. The
authorities formed the opinion that there had been a false
declaration where the goods in question were stated tax free
goods; and issued notice under Section 78(5) of the Act of
1994. The dealer submitted a reply to the notice that he had
dispatched ‘damaged Moong Dal (Cattle Feed)’ and to his
impression, it were sales tax free; and prayed that the matter
be decided immediately.


3


3

The aforesaid order passed by the Assessing Authority
was, however, reversed by the Dy. Commissioner (Appeals)
on 24.02.2005 while accepting the appeal filed by the dealer
with the observations that the commodity in question had been
‘wastage of Moong Dal’, which is not used for human
consumption and is used as cattle feed; and remains exempt
from tax as such. The learned Dy. Commissioner (Appeals)
also observed that the Assessing Authority had not stated any
reason wherefor it were treated to be a case of the goods
meant for human consumption.

The matter was taken in appeal by the Department to
the Tax Board against the order so passed by the Dy.
Commissioner (Appeals). The dealer-petitioner did not appear


4


4


“.........................

..
.."...#.....
.
..%.&.'......."..
..%..*+......0.........*....#...
...
....567....#......9.#9

............
.......*.....#...;...%......

...#.........
........6..

"..............9...6..
.;..
..".7....6
...
...69...........#........

.7"6


5


5


.......
.7......#..#....7......
......6
..................
..
...#....
.9....56.7..........7.......*...
(...) ...................%..

.."


......#.;.9....K.......... ...78(4) .

.............#.

..........

."
.....6....#..................9."

Seeking to assail the order aforesaid, learned counsel
for the petitioner strenuously contended that the consignment
in question had admittedly been of damaged Moong Dal; and
such damaged Moong Dal being not fit for human
consumption, its natural use remains that of cattle feed and
was rightly dealt with as such by the petitioner-dealer. Learned
counsel submitted that when nothing was concealed by the
dealer and description of goods as damaged Moong Dal was
not found incorrect, the Assessing Authority could not have
levied tax and inflicted penalty merely because of his different
opinion about the description of the goods. Learned counsel
further submitted that in the proceedings under Section 78 of
the Act of 1994, the authority concerned could not have
decided on the question of taxability or rate of tax applicable
on the goods for the scope of enquiry being limited to consider
if the requisite documents were not furnished or if the
documents were false. According to the learned counsel, all
the requisite documents were furnished complete in all


6


6

Learned counsel appearing for the Department
vehemently opposed with the submissions that the likely use
of the commodity cannot be decisive on its liability for taxation
and it is the classification of the goods that matters; that goods
in question being pulse, Moong Dal, were subject to sales tax
as such and merely by suggesting the consignment in
question to be of damaged pulse, the dealer could not have
declared it to be a cattle feed so as to evade tax. In support,
learned counsel referred to the decision of this Court in Gotilal
Bhonrilal (supra). Learned counsel further submitted that it is
very much within the domain of the authority concerned to
check the correctness of the documents and in the given case,
also to examine the question of taxability of goods. Learned


7


7

Learned counsel for the petitioner rejoined with the
submissions that if the contentions as urged on behalf of the
Department were to be accepted, it would lead to an
unacceptable result that all the exercise of regular assessment
would be undertaken in the proceedings under Section 78 of
the Act of 1994, something not contemplated by the statute.
Learned counsel submitted that the said provision being
essentially meant to check evasion of tax during
transportation, any dispute about taxability of goods, by its
very nature, has to be left to be determined during regular
assessment proceedings.

Having considered the rival submissions, this Court is
clearly of opinion that this revision petition remains bereft of
substance. The observations and findings of the Rajasthan
Tax Board as reproduced hereinbefore remain


8


8

The main plank of the submissions on behalf of the
dealer is that the goods in question being damaged pulse,
named 'Moong Dal Damaged', were purchased as cattle feed
and were sold as cattle feed, therefore, there had been no
false declaration in the documents in question. The
submission is fundamentally incorrect. The commodity
concerned had been nothing but a pulse, Moong Dal. Its
quality, be it excellent, or good, or average, or bad, or
damaged, in any event, would not alter its character as that of
a pulse. Even if it be assumed that the goods in question had
been ‘damaged Moong Dal’, it does not ipso facto lead to the
result that the so-called damage had changed the character of
the commodity from pulse to cattle feed. It cannot be assumed
that as soon as Moong Dal is damaged, it gets reduced to, or
turns into, a cattle feed and cannot be used for human
consumption at all.

In the case of Gotilal Bhonrilal (supra) this Court
rejected the contention that Urad and Gram be treated as
cattle feed and exempt from tax; and this Court held that the
Board was right, with reference to the fact that Urad and Gram
are primarily used for human consumption and it is only
incidental that these commodities are also used as the


9


9

The entire case of the present petitioner is founded on
incorrect premise where the petitioner makes assumptive
submission that natural use of damaged Moong Dal is that of
cattle feed. This Court is unable to find any basis for such
assumption and any rationale behind such submission. The
natural and primary use of Moong Dal being for human
consumption, its incidental or alternative use, say because of
some qualitative change, has no bearing on its classification
for the purpose of taxability; and in any case, it cannot be
classified as cattle feed merely with reference to the so-called
damage. Thus, the description of the goods in the bill and bilti
accompanying the consignment was incorrect where a taxable
commodity (Moong Dal) was described as a non-taxable one
(Cattle Feed).

Once it was found that the goods were not correctly
described in the documents that stated a taxable commodity
as a non-taxable one, such documents were incorrect on the
relevant facts and material particulars; and could only have
been termed as false. The present one was clearly a case of
submission of false documents and the goods in movement
being not accompanied by true and faithful documents. The


10


Assessing Authority has not committed any error in imposing
penalty in this case.

The decision in M/s Maheshwari Minerals & Chemicals
(supra) has no co-relation with the case at hands. Therein, the
Assessing Authority held the assessee liable to pay tax on his
products, which, as per the order of Assessing Authority were
stone powder and chips and which, according to the assessee,
were poultry feed, ‘murgidana’. The Dy. Commissioner
(Appeals), however, held that the assessee was not given
opportunity of hearing and proceeded to remand the matter
but with certain observations that if it be found that the product
of the assessee is used as poultry feed either independently or
by mixing in other poultry feed, then the assessee be given
benefit under the relevant notification. Aggrieved with such
observations, the department preferred appeal to the Tax
Board; and the Tax Board proceeded to allow the appeal with
the finding that the product in question was not a poultry feed.

In the revision petition as preferred by the assessee, this
Court did not approve of the decision of the Tax Board where,
even without setting aside the finding of the Dy. Commissioner
that the assessee was denied opportunity of hearing before
the Assessing Authority, the order of remand as made by the
Dy. Commissioner (Appeal) was interfered with and the Tax
Board decided the question itself that the product in question


11


was poultry feed or not. This court held that entire issue should
have been sent to the Assessing Authority for deciding after
opportunity of hearing to both the parties; and this Court
observed that opportunity of hearing having not been extended
to the assessee, there was no factual foundation with the
Assessing Authority and the department too had no
opportunity to meet with the grounds whereupon the assessee
claimed his product to be the poultry feed. This Court set aside
the order passed by the Tax Board; and directed that the
Assessing Authority shall decide the issue in accordance with
law after opportunity of hearing to both the parties and
uninfluenced by any of the observations made by the Dy.
Commissioner (Appeals) or by the Tax Board.

In the aforesaid order, this Court has never decided that
use of the product by the particular purchaser would be
decisive of its nature and classification; and it was left to be
determined by the Assessing Authority as to whether the
product was ‘poultry feed’ as claimed by the assessee without
being influenced by the observations made by the appellate
authorities including those of the Dy. Commissioner (Appeals).
It is noticeable that in the said case, the tenor of the
observations of the Dy. Commissioner (Appeals) had been as
if the end use of product by the particular purchaser would be
decisive of the nature of the product in question but those


12


observations were not approved as such by this Court; and
this Court only observed that in the given situation the Dy.
Commissioner (Appeals) ‘rightly held that the product of the
assessee, if is found as poultry feed, then the assessee is
entitled the benefit’. This Court has not said that the finding as
to whether it were a poultry feed would be reached with
reference to the end use of the product. The question of
classification of the product was left to be determined by the
Assessing Authority, and to be determined without being
influenced by what was said by the Dy. Commissioner
(Appeals). The said decision in M/s Maheshwari Minerals‘s
case has no bearing on the question at hands nor supports the
case of the present petitioner.

The arguments relating to the scope of proceedings
under Section 78(5), in the fact situation of the present case,
do not carry even a technical value what to say of substance.
Apart from other aspects that the goods in movement should
be supported by the requisite documents, and such
documents should be produced at the time of checking, the
requirement further remains that the concerned documents
should not be false; and for submission of false document or
declaration, one incurs the liability for penalty. The documents
produced in the present case declared a commodity liable to
taxation (Moong Dal) as something not liable to taxation


13


(Cattle Feed). The declaration and thereby the documents
were, therefore, false and the petitioner having knowingly and
deliberately drawn such documents cannot escape the liability
under Section 78 (5) of the Act of 1994. The submission that
such enquiry as to determine the question of taxability of
goods in question cannot be made in the proceedings under
Section 78 is not correct. Whether a declaration is correct or
not is definitely within the domain of the Authority concerned to
examine while proceeding under Section 78 of the Act of 1994.
A declaration stating a taxable commodity as non-taxable one
by giving a different name to the commodity is the mischief
very much within the ambit of Section 78 of the Act of 1994;
and enquiry into the correctness of the particulars of the goods
as stated in the documents and, as a necessary corollary, into
the aspect of taxability of such goods, is squarely within the
ambit and scope of the proceedings under Section 78 of the
Act of 1994.

It is noticed that the learned Dy. Commissioner
(Appeals) had gone even farther than the case of dealer and
termed the goods in question as ‘wastage of Moong Dal’
without appreciating that there is essential difference in the
two terms, ‘wastage’ and ‘damaged’. A damaged material
does not, by the damage itself, become wastage. The dealer
himself never claimed it to be the ‘wastage of Moong Dal’. The


14


learned Dy. Commissioner (Appeals) further proceeded on
unwarranted and baseless assumption that the goods in
question were not meant for human consumption and were
used as cattle feed. The Tax Board has not committed any
error in reversing the order passed by the Dy. Commissioner
(Appeals) that proceeded on fundamentally incorrect premise.

It may in the passing be observed that apart from the
facts as noticed by the Assessing Authority that in the two bills
dated 24.12.2002 and 28.01.2003 the petitioner purchased the
commodity in question as 'Moong Dal Damage' and the
expression ‘cattle feed’ got inserted only in the later bill dated
31.01.2003, noticeable further it is that the goods in question
were sold by the petitioner dealer only on 11.10.2003. It is
difficult to even co-relate the said purchase bills of the month
of December 2002 and January 2003 with the sale effected as
late as in the month of October 2003, of the goods said to be
‘damaged’ Moong Dal.

Viewed from any angle, there appears no reason to

consider any interference in this case.
The revision petition fails and is, therefore, dismissed.

No costs.

(DINESH MAHESHWARI), J.

MK

Whether alternative relief of revision bars the exercise of power under Section 482

1


1

ORDER

Sanjay Bhandari Vs. State of Rajasthan

(1) S.B.CRIMINAL MISC.PETITION NO.289/2006
P.I.Industries Ltd. Vs. State of Rajasthan
(2) S.B.CRIMINAL MISC.PETITION NO.41/2008
UNDER SECTION 482 OF
THE CRIMINAL PROCEDURE CODE, 1973.

Date of Order: Feb.05, 2009

PRESENT

HON'BLE MR.JUSTICE DEO NARAYAN THANVI

Mr.Sandeep Mehta )
Mr.Suresh Kumbhat) for petitioners.


Mr.V.R.Mehta, Public Prosecutor.


REPORTABLE BY THE COURT:

1. Before entering into the merits of both
these Misc. Petitions filed against the order of

2


2

2. Since both these Misc. Petitions filed under
Section 482 of the Code relates to challenge to
the order of taking cognizance and issuing
process, therefore, they are being disposed-of

3


3

3. In Criminal Misc. Petition No.289/2006 filed
by Sanjay Bhandari, learned Judicial Magistrate,
Bhinder, Udaipur, took cognizance against him
for the offences u/ss.420 read with 120B IPC on
9.1.2006 on the basis of chargesheet filed by
the SHO, P.S., Bhinder, Distt.Udaipur on the
ground that the accused petitioner Sanjay
Bhandari obtained a hotel Rajmahal at Bhinder
from the complainant side on 9.11.2000 by way
of an agreement for a period of five years on
rent. In the name of this hotel business, the
accused petitioner purchased number of valuable
cars from foreign Companies but never used
those cars for the hotel and sold the same to
other persons, thereby he obtained tax relief on
one hand in the name of tourism business,
without being performed and on the other hand,
committed theft of custom duty. The rent of the

4


4

4. In Criminal Misc. Petition No.41/2008, a
complaint under Section 29(1) of the
Insecticides Act, 1968 was filed by the Assistant
Director of Agriculture (Extension) & Insecticides
Inspector, Hanumangarh Junction, on 17.3.2006
alleging therein that the insecticide product
“Imidachloprid 17.8% SL Batch No.2003-J-01
was misbranded. The sample of the aforesaid
insecticide was drawn and sent to the
Laboratory, which was found to be misbranded.
The learned Judicial Magistrate, Pilibanga, Distt.
Hanumangarh took cognizance on the basis of
this complaint as averred in para `H' of the

5


5

5. Learned counsel appearing on behalf of the
petitioners, while citing various pronouncements
of the Hon'ble Supreme Court on the scope &
ambit of Section 482 and 397 of the Code,
argued that there is no bar in filing direct
petition under Section 482 of the Code before
this Court despite there being alternative
remedy of filing revision petition under Section
397 CrPC, as according to them, even on merits
if the allegations are looked into, no case is

6


6sections(
2) and (3) of Section 397 of the Code,
the revision petition is barred which is against
the interlocutory order or further application by
the same person respectively. In support of their
contention, they have relied upon various
pronouncements, which are hereinafter referred.


7


7Before dealing with the ambit of both the
Sections i.e. S.397 & S.482 of the Code, it would

be worthwhile to reproduce them for the purpose

of their applicability.

7. Section 397 of the Code reads as under:
“397. Calling for records to exercise
powers of revision.-(1) The High Court or
any Sessions Judge may call for and
examine the record of any proceeding
before any inferior Criminal Court situate
within its or his local jurisdiction for the
purpose of satisfying itself or himself as to
the correctness, legality or propriety of any
finding, sentence or order, recorded or
passed, and as to the regularity of any
proceedings of such inferior Court, and may,
when calling for such record, direct that the
execution of any sentence or order be
suspended, and if the accused is in
confinement, that he be released on bail or
on his own bond pending the examination of
the record.

(2) The powers of revision conferred by subsection
(1) shall not be exercised in relation
to any interlocutory order passed in any
appeal, inquiry, trial or other proceeding.
(3) If an application under this section has
been made by any person either to the High
Court or to the Sessions Judge, no further

8


8

8. Sections 482 & 483 of the Code reads thus:
“482. Saving of inherent power of High
Court.-Nothing in this Code shall be
deemed to limit or affect the inherent
powers of the High Court to make such
orders as may be necessary to give effect to
any order under this Code, or to prevent
abuse of the process of any Court or
otherwise to secure the ends of justice.”

483. Duty of High Court to exercise
continuous superintendence over Courts
of Judicial Magistrates.-Every High
Court shall so exercise its superintendence
over the Courts of Judicial Magistrates
subordinate to it as to ensure that there is
an expeditious and proper disposal of cases
by such Magistrates.”
9. A bare reading of Section 397(1) of the
Code speaks that record of any proceeding of

any inferior court can be examined by the High

Court or the Sessions Judge with regard to its

correctness, legality or propriety of any finding,


9


9o
its regularity. Under sub-section (2), a bar has
been imposed for exercise of such power in


relation to interlocutory order passed in any
appeal, inquiry, trial or other proceeding and
sub-section (3) bars further revision by the

same person. Thus, on a cumulative reading of
these three sub-sections, it is clear that except
in interlocutory orders or second revision by the
same person, the correctness, legality and
propriety of the impugned sentences or orders
may be examined either by the High Court or by
the Sessions Judge, whereas under Section 482
of the Code, while exercising inherent powers,
the High Court may make such orders, as may
be necessary to give effect to any order under
this Code or to prevent abuse of the process of
any court or otherwise to secure the ends of
justice. Though, on broad reading of both the
Sections, it can be said that exercise of powers


10


under Sec.397 and Section 482 of the Code are
by and large similar in granting relief to the
aggrieved party, except that of interlocutory
order and of second revision by the same party.
If the order is of such a nature as contemplated
under sub-sections (2) and (3) of Section 397 of
the Code, then the only remedy available to the
aggrieved party is by way of a petition under
Section 482 of the Code within its four corners.
But, if these two Sections are looked into in the
light of the words used, Section 397 is confined
to the extent of examining the correctness,
legality or propriety of the order, whereas
inherent powers can be exercised to give effect
to any order given under this Code or to prevent
abuse of the process of any Court or to secure
the ends of justice.

10. It is noticed rather shocking that in many of
the cases, aggrieved parties are trying to

11


approach the High Court in similarly situated
cases either under Section 397 or under Section
482 of the Code as advised or both the remedies
simultaneously through one or other party of the
same case. For instance, this Court came with a
situation when in a same case of framing
charges on 22.8.06 against three accused
u/ss.420, 467, 468 read with 120B IPC, one of
the accused Niranjan Kumar preferred a Misc.
Petition u/s.482 of the Code & another accused
Avadh Bihari filed revision being S.B.Cr.Revision
No.1025/07 under Section 397 of the Code in
this Court, which, on being noticed, have been
tagged together. Likewise, in Cr.Misc.Petition
No.736/99, accused, who was a Pradhan of
Panchayat Samiti, Dungla, on one hand,
challenged FIR for its quashing u/s.482 of the
Code, which was stayed by the High Court and
on the other hand, challenged the order of
Judicial Magistrate, who took cognizance u/s.509


12


IPC on the same facts in this Court u/s.397 of
the Code by way of filing Cr.Revision
No.742/1999, resulting in its dismissal in the
light of Natwarlal vs. State reported in 2008(1)
CrLR (Raj) 617. During pendency of this petition,
the accused was acquitted and the Misc. Petition
was dismissed as having become infructuous at
the request of learned counsel for the petitioner.
Certain more examples may be noticed of the
like nature in this Court and other High Courts
as well. Whether the High Court has some check
to control this dual process, which can be
termed as riding on two horses by the parties to
the litigation or abuse of the process by the
Courts itself? Answer to this lies by declaring a
definite law based on logical conclusion to give
proper effect to the provisions of this Code as
embodied u/ss.397 and 482 of the Code. Certain
judgments of the Hon'ble Apex Court are of wide
importance to determine the ratio in this regard,


13


which will be discussed hereinafter.

11. Broadly speaking, Section 397 of the Code
operates when the order is final because there is
a bar in filing revision under Section 397(2) with
regard to interlocutory order or u/s.397(3) in
second revision. Against such interlocutory
orders or second revisions, if they cover under
any of the three contingencies, provided-for
under Section 482 of the Code and as referred-
to above, the aggrieved party can approach the
High Court under Section 482 of the Code. The
order is said to be final under this Code, when
either the criminal proceedings are terminated
or they are commenced. Chapter XVI of the Code
deals with the commencement of proceedings
and Chapter XVII onwards of the Code deals
with the charge. Proceedings are said to have
commenced when a complaint is not dismissed
under Section 203 of the Code and the process

14


is issued against the accused under Section 204
of the Code and the trial is commenced when the
charge is framed under Chapter XVII of the
Code. Section 203 of the Code is limited to the
extent that if there are no sufficient grounds for
proceeding, the magistrate shall dismiss the
complaint and after issue of the process or when
the accused is brought before the court through
police investigation, he is discharged, when the
charge is groundless either under Section 239 of
the Code or under Section 245 of the Code, from
evidence, no case is made out, if unrebutted,
would warrant his conviction or no sufficient
grounds are made out under Section 227 of the
Code. This commencement of proceeding or
putting a person to face trial and discharge of
the accused i.e. termination of proceedings of
trial is termed as final order. Rest are said to be
interlocutory orders. This view has been
reiterated by the Hon'ble Supreme Court in


15


Amarnath vs. State of Haryana reported in AIR

1977 SC 2185 in the following terms:

“...It is difficult to hold that the impugned
order summoning the appellants
straightaway was merely an interlocutory
order which could not be revised by the High
Court under sub-sections (1) and (2) of
Section 397 of the 1973 Code. The order of
the Judicial Magistrate summoning the
appellants in the circumstances of the
present case, particularly having regard to
what had preceded, was undoubtedly a
matter of moment, and a valuable right of
the appellants had been taken away by the
Magistrate in passing an order prima facie in
sheer mechanical fashion without applying
his mind. We are, therefore, satisfied that
the order impugned was one which was a
matter of moment and which did involve a
decision regarding the rights of the
appellants. If the appellants were not
summoned, then they could not have faced
the trial at all, but by compelling the
appellants to face a trial without proper
application of mind cannot be held to be an
interlocutory matter but one which decided
a serious question as to the rights of the
appellants to be put on trial.”

12. In the present petitions, both the
petitioners have challenged the order of taking

cognizance i.e. initiation of proceedings being a


16


matter of moment for putting them on trial,
which is not an interlocutory order but a final
order, by way of these petitions filed u/s.482
CrPC. In this regard, if the law is looked into,
the leading case on this subject is of the larger
Bench of the Hon'ble Supreme Court in Madhu
Limaye vs. State of Maharashtra reported in AIR
1978 SC 47. While discussing the scope of
Section 482 and 397(2) of the Code, the Hon'ble
Supreme Court laid down the following principles
with regard to exercise of inherent powers by
the High Court:

“8. xxx At the outset the following principles
may be noticed in relation to the exercise of
the inherent power of the High Court which
have been followed ordinarily and generally,
almost invariably, barring a few exceptions:

(1) That the power is not to be resorted to if
there is a specific provision in the Code for
the redress of the grievance of the
aggrieved party;
(2) That it should be exercised very

sparingly to prevent abuse of process of any
Court or otherwise to secure the ends of



17


justice;

(3) That it should not be exercised as
against the express bar of law engrafted in
any other provision of the Code.
13. In the said decision, the Hon'ble Supreme
Court has also gone into the scope of
interlocutory order and has held that the order
under challenge was not an interlocutory one so
as to attract the bar of sub-section(2) of Section
397 of the Code. In this case, appellant Shri
Madhu Limaye was put to trial for the offence
u/s.500 IPC before the Court of Sessions Judge,
Greater Bombay, in pursuance to the sanction
issued by the State Govt. under Sec.199 of the
Code for making defamatory press note against
the then Law Minister of Maharashtra Shri
A.R.Antulay. Learned Sessions Judge took
cognizance and process was issued upon the
said complaint. The Chief Secretary to the Govt.
of Maharashtra was to be examined as a witness

18


to prove the sanction but the appellant Shri
Madhu Limaye filed an application before the
learned Sessions Judge to challenge the legality
of the trial. The learned Sessions Judge rejected
the application and framed charge u/s.500 IPC.
The appellant thereafter challenged the order by
way of revision in the High Court u/s.397 of the
Code. The High Court dismissed the revision
without entering into the merits of the case by
holding that the order being interlocutory in
nature, it was not maintainable in view of the
provisions contained in sub-sec.(2) of Section
397 of the Code. Against this, the appeal was
preferred. While discussing the scope of
interlocutory order, the Hon'ble Supreme Court
observed in para 13 as under:

“...On the one hand, the legislature kept
intact the revisional power of the High Court
and, on the other, it put a bar on the
exercise of that power in relation to any
interlocutory order. In such a situation, it
appears to us that the real intention of the


19


legislature was not to equate the expressing
“interlocutory order” as invariably being
converse of the words “final order”. There
may be an order passed during the course of
a proceeding which may not be final in the
sense noticed in Kuppuswami's case (AIR
1949 FC 1) (supra), but, yet it may not be
an interlocutory order – pure or simple.
Some kinds of order may fall in between the
two. By a rule of harmonious construction,
we think that the bar in sub-s.(2) fo S.397
is not meant to be attracted to such kinds of
intermediate orders. They may not be final
orders for the purposes of Art.134 of the
Constitution, yet it would not be correct to
characterise them as merely interlocutory
orders within the meaning of S.397(2). It is
neither advisable, nor possible to make a
catalogue of orders to demonstrate which
kinds of orders would be merely, purely or
simply interlocutory and which kinds of
orders would be final, and then to prepare
an exhaustive list of those types of orders
which will fall in between the two. The first
two kinds are well known and can be culled
out from many decided cases. We may,
however, indicate that the type of order
with which we are concerned in this case,
even though it may not be final in one
sense, is surely not interlocutory so as to
attract the bar of sub-sec.(2) of S.397. In
our opinion, it must be taken to be an order
of the type falling in the middle course.”

14. In para 17 of the said judgment, the Hon'ble
Supreme Court lastly observed as under:


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“Before we conclude we may point out an
obvious, almost insurmountable, difficulty in
the way of applying literally the test laid
down in Kuppuswami Rao's case (AIR 1949
FC 1) and in holding that an order of the
kind under consideration being not a final
order must necessarily be an interlocutory
one. If a complaint is dismissed under S.203
or under S.204(4) or the Court holds the
proceeding to be void or discharges the
accused, a revision to the High Court at the
instance of the complainant or the
prosecutor would be competent, otherwise it
will make S.398 of the new Code otiose.
Does it stand to reason, then, that an
accused will have no remedy to move the
High Court in revision or invoke its inherent
power for the quashing of the criminal
proceeding initiated upon a complaint or
otherwise and which is fit to be quashed on
the face of it? The legislature left the power
to order further inquiry intact in S.398. Is it
not then in consonance with the sense of
justice to leave intact the remedy of the
accused to move the High Court for setting
aside the order adversely made against him
in similar circumstances and to quash the
proceeding? The answer must be given in
favour of the just and reasonable view
expressed by us above.”

Accordingly, the Hon'ble Supreme Court

allowed the appeal and remanded the case back

to the High Court for disposal on merits in the

light of the above judgment.


21


15. Apart from laying down the three principles
as referred-to above with regard to exercise of
inherent powers u/s.482 of the Code, the
Hon'ble Supreme Court also relied upon its
earlier judgment in R.P.Kapur v. The State of

Punjab reported in AIR 1960 SC 866, wherein
the Hon'ble Gajendragadkar J., as he then was,
laid down three categories of cases, wherein
inherent powers u/s.561A of the old Code
corresponding to Section 482 of the Code, can
be exercised. Firstly, where the institution or
commencement of the criminal proceeding is
against the legal bar; secondly from the bare
reading of the FIR or the complaint at the face
value, no offence is made out; and thirdly, there
is no legal evidence in support of the case but
while exercising the powers u/s.561A, the High
Court would not embark upon an enquiry as to
whether the evidence in question is reliable or
not. Even if the order is not final by way of


22


termination of proceedings and the continuance
of proceedings in a criminal court manifestly
shows that there is a legal bar against the
institution or continuance of the criminal
proceeding or the court exercised jurisdiction,
which was not vested in it, the High Court would
be justified in quashing the proceedings.

16. Thus, from the above judgment of Madhu
Limaye's case (supra), it can be gathered that
the order of taking cognizance and framing
charge cannot be termed as an interlocutory
order and the revision is maintainable against
this order and when there is a specific provision
for redress of the grievance of an aggrieved
party, the inherent powers u/s.482 CrPC cannot
be exercised.
17. In the other rulings of regular Benches cited
by learned counsel for the petitioner namely (1)

23


State of Haryana v. Bhajanlal reported in AIR
1992 SC 604; (2) M/s Pepsi Foods Ltd. v. Special
Judicial Magistrate reported in 1998 Cr.L.R.(SC)
18; (3) K. Ramakrishna Vs. State of Bihar,
reported in 2000 (4) Crimes 113 (SC), (4)
S.W.Palanitkar v. State of Bihar reported in
2001 Cr.L.R. (SC) 751; (5) N.K.Sharma v.
Abhimanyu reported in (2006) 2 SCC (Cri) 135;
and (6) Bholu Ram v. State of Punjab reported
in (2008) 3 SCC (Cri) 710, wherein the scope
and ambit of only Section 482 of the Code, has
been discussed as is provided for in the Section
itself, without there being any reference to
Section 397 of the Code as has been discussed
in the Larger Bench's decision of the Hon'ble
Supreme Court in Madhu Limaye's case (supra).

18. In Adalat Prasad Vs. Rooplal Jindal & Ors.,
reported in 2004 Cr.L.R. (SC) 800, the Larger
Bench of the Hon'ble Supreme Court while

24


confirming the order of the High Court held that
recalling summons issued by the Magistrate
under Section 204 of the Code will be a review
of its earlier order, which is not warranted under
the Code as the process is issued under Section
204 of the Code when complaint is not dismissed
under Section 203 of the Code. Opposite earlier
view taken by the three Judges Larger Bench in

K. K. Mathew Vs. State of Kerala & Anr.,
reported in (1992) 1 SCC 217 was held not to
be a correct law by holding that in the absence
of any review power or inherent power with the
subordinate courts, the remedies lie in invoking
Section 482 of the Code. Issue relating to scope
of Section 397 of the Code was also not involved
in this cited case as well.
19. On the applicability of Section 482 of the
Code despite there being alternative remedy
under Section 397 of the Code, leaned counsel

25


for the petitioner has cited the latest decision of
Dhariwal Tobaco Products Ltd. v. State of
Maharashtra decided by the Hon'ble Supreme
Court on 17.12.08 in Criminal Appeal No.2055 of
2007 (Arising out of SLP (Cri.) No.2272 of
2007). This was a case under the Prevention of
Food Adulteration Rules, 1955, wherein a
criminal complaint against a Company was filed,
which was dealing in the manufacturing of the
`Gutkha' having multiple Units. The learned
Magistrate took cognizance and issued summons
against which they filed a petition in the High
Court u/s.482 of the Code, which was dismissed
against which the appeal was filed in the Hon'ble
Supreme Court, wherein, at Para 10 it has been
held as under:

“10. Inherent power of the High Court is not
conferred by statute but has merely been
saved thereunder. It is, thus, difficult to
conceive that the jurisdiction of the High
Court would be held to be barred only
because the revisional jurisdiction could


26


also be availed of. (See Krishnan and Anr.

v. Krishnaveni and Anr. MANU/SC/0223/
1997). In fact in Adalat Prasad v. Rooplal
Jindal and Ors. MANU/SC/0688/2004 to
which reference has been made by the
learned Single Judge of the Bombay High
Court in V.K. Jain and Ors. (supra) this
Court has clearly opined that when a
process is issued, the provisions of Section
482 of the Code can be resorted to.”
20. In the said decision of Dhariwal's case
(supra), though the scope of Section 482 of the
Code has been discussed in the light of Art.227
of the Constitution but it has been observed
while relying upon the decision of the Hon'ble
Supreme Court in C.B.I. v. Ravi Shankar
Srivastava, MANU/SC/8405/2006 that inherent
powers under this Section, though wide, has to
be exercised sparingly, carefully and with
caution and it is to be exercised ex debito
justitiae to do real and substantial justice for
the administration of which alone the courts
exist. The ratio of the said case is that such
powers can be exercised, when there is an abuse

27


of the process of law of any court or to secure
the ends of justice. While allowing the appeal,
the case was remitted back to the High Court for
fresh decision on merits. In the said case also,
the earlier judgment of the larger Bench of the
Hon'ble Supreme Court in Madhu Limaye's case
(supra) has not been referred-to.

21. Thus, taking guidelines on the law laid down
by the larger Bench in Madhu Limaye's case
(supra) on the basis of the doctrine of star
decisis, which is a strong rule of precedent, I am
fortified with the view that when the petitioners,
who are aggrieved by the order of taking
cognizance, have a specific provision under the
Code for redressal of their grievances by way of
filing revision under Section 397 of the Code,
they cannot invoke the inherent powers of this
Court under Section 482 CrPC because the order
of taking cognizance is final one, not being an

28


interlocutory order. The revision can very well
be maintained before the learned Sessions Judge
as held by this Court in Natwarlal vs. State
reported in 2008(1) CrLR (Raj) 617.

22. This Court could have exercised the power
under Section 482 of the Code, had there been a
case from the perusal of the complaint that the
action of taking cognizance is without
jurisdiction or barred by law, which has resulted
in abuse of the process of law or is necessary to
secure the ends of justice, specially when
affected party for one or the other reason could
not resort to the remedy available u/s.397 of the
Code. The legality or correctness of the order in
appreciating evidence for the purpose of taking
cognizance and charge is purely a subject matter
of examination under Section 397 of the Code.
23. Likewise, the duty of superintendence under

29


Section 483 of the Code is confined only to the
extent of expeditious and proper disposal of
cases. Duty cast upon the High Court under this
Section is alike of an administrative nature,
which can be read with the inherent powers
under Section 482 of the Code, being a saving
provision where there is no other power to
interfere.

24. From the facts as stated above and the
statements recorded by the police during
investigation in Sanjay Bhandari's petition,
petitioner took the hotel by way of agreement on
rental basis but he had neither run the hotel nor
licence fee was deposited and on the contrary,
he purchased valuable cars from the foreign
Company in the name of tourism and thereby
alleged to have committed an act of cheating.
These allegations cannot be termed as purely of
civil nature, but is an offence u/s.420 IPC.

30


25. In Misc. Petition filed by P.I.Industries Ltd.,
petitioner was charged for having misbranded
the insecticide product. Objections with regard
to not sending of second sample or consent etc.
could have been raised even during the course
of trial or by way of filing revision before the
learned Sessions Judge.
26. From the face value of both the complaints,
neither the magistrate while taking cognizance,
has abused the process of law nor the cases are
of such nature, which bars his jurisdiction or
which comes under the category of civil nature
so as to attract the provisions of Section 482
CrPC. The appropriate remedy available to the
petitioners is to approach the revisional court
under Section 397 of the Code, if they so desire
and in that event, the period consumed in the
petition shall not come in the way for the
purpose of limitation.

31


27. Consequently, both these Misc. Petitions are
dismissed with the above observations.
(DEO NARAYAN THANVI), J.

RANKAWAT JK, PS

Whether alternative relief of revision bars the exercise of power under Section 482

1


1

ORDER

Sanjay Bhandari Vs. State of Rajasthan

(1) S.B.CRIMINAL MISC.PETITION NO.289/2006
P.I.Industries Ltd. Vs. State of Rajasthan
(2) S.B.CRIMINAL MISC.PETITION NO.41/2008
UNDER SECTION 482 OF
THE CRIMINAL PROCEDURE CODE, 1973.

Date of Order: Feb.05, 2009

PRESENT

HON'BLE MR.JUSTICE DEO NARAYAN THANVI

Mr.Sandeep Mehta )
Mr.Suresh Kumbhat) for petitioners.


Mr.V.R.Mehta, Public Prosecutor.


REPORTABLE BY THE COURT:

1. Before entering into the merits of both
these Misc. Petitions filed against the order of

2


2

2. Since both these Misc. Petitions filed under
Section 482 of the Code relates to challenge to
the order of taking cognizance and issuing
process, therefore, they are being disposed-of

3


3

3. In Criminal Misc. Petition No.289/2006 filed
by Sanjay Bhandari, learned Judicial Magistrate,
Bhinder, Udaipur, took cognizance against him
for the offences u/ss.420 read with 120B IPC on
9.1.2006 on the basis of chargesheet filed by
the SHO, P.S., Bhinder, Distt.Udaipur on the
ground that the accused petitioner Sanjay
Bhandari obtained a hotel Rajmahal at Bhinder
from the complainant side on 9.11.2000 by way
of an agreement for a period of five years on
rent. In the name of this hotel business, the
accused petitioner purchased number of valuable
cars from foreign Companies but never used
those cars for the hotel and sold the same to
other persons, thereby he obtained tax relief on
one hand in the name of tourism business,
without being performed and on the other hand,
committed theft of custom duty. The rent of the

4


4

4. In Criminal Misc. Petition No.41/2008, a
complaint under Section 29(1) of the
Insecticides Act, 1968 was filed by the Assistant
Director of Agriculture (Extension) & Insecticides
Inspector, Hanumangarh Junction, on 17.3.2006
alleging therein that the insecticide product
“Imidachloprid 17.8% SL Batch No.2003-J-01
was misbranded. The sample of the aforesaid
insecticide was drawn and sent to the
Laboratory, which was found to be misbranded.
The learned Judicial Magistrate, Pilibanga, Distt.
Hanumangarh took cognizance on the basis of
this complaint as averred in para `H' of the

5


5

5. Learned counsel appearing on behalf of the
petitioners, while citing various pronouncements
of the Hon'ble Supreme Court on the scope &
ambit of Section 482 and 397 of the Code,
argued that there is no bar in filing direct
petition under Section 482 of the Code before
this Court despite there being alternative
remedy of filing revision petition under Section
397 CrPC, as according to them, even on merits
if the allegations are looked into, no case is

6


6sections(
2) and (3) of Section 397 of the Code,
the revision petition is barred which is against
the interlocutory order or further application by
the same person respectively. In support of their
contention, they have relied upon various
pronouncements, which are hereinafter referred.


7


7Before dealing with the ambit of both the
Sections i.e. S.397 & S.482 of the Code, it would

be worthwhile to reproduce them for the purpose

of their applicability.

7. Section 397 of the Code reads as under:
“397. Calling for records to exercise
powers of revision.-(1) The High Court or
any Sessions Judge may call for and
examine the record of any proceeding
before any inferior Criminal Court situate
within its or his local jurisdiction for the
purpose of satisfying itself or himself as to
the correctness, legality or propriety of any
finding, sentence or order, recorded or
passed, and as to the regularity of any
proceedings of such inferior Court, and may,
when calling for such record, direct that the
execution of any sentence or order be
suspended, and if the accused is in
confinement, that he be released on bail or
on his own bond pending the examination of
the record.

(2) The powers of revision conferred by subsection
(1) shall not be exercised in relation
to any interlocutory order passed in any
appeal, inquiry, trial or other proceeding.
(3) If an application under this section has
been made by any person either to the High
Court or to the Sessions Judge, no further

8


8

8. Sections 482 & 483 of the Code reads thus:
“482. Saving of inherent power of High
Court.-Nothing in this Code shall be
deemed to limit or affect the inherent
powers of the High Court to make such
orders as may be necessary to give effect to
any order under this Code, or to prevent
abuse of the process of any Court or
otherwise to secure the ends of justice.”

483. Duty of High Court to exercise
continuous superintendence over Courts
of Judicial Magistrates.-Every High
Court shall so exercise its superintendence
over the Courts of Judicial Magistrates
subordinate to it as to ensure that there is
an expeditious and proper disposal of cases
by such Magistrates.”
9. A bare reading of Section 397(1) of the
Code speaks that record of any proceeding of

any inferior court can be examined by the High

Court or the Sessions Judge with regard to its

correctness, legality or propriety of any finding,


9


9o
its regularity. Under sub-section (2), a bar has
been imposed for exercise of such power in


relation to interlocutory order passed in any
appeal, inquiry, trial or other proceeding and
sub-section (3) bars further revision by the

same person. Thus, on a cumulative reading of
these three sub-sections, it is clear that except
in interlocutory orders or second revision by the
same person, the correctness, legality and
propriety of the impugned sentences or orders
may be examined either by the High Court or by
the Sessions Judge, whereas under Section 482
of the Code, while exercising inherent powers,
the High Court may make such orders, as may
be necessary to give effect to any order under
this Code or to prevent abuse of the process of
any court or otherwise to secure the ends of
justice. Though, on broad reading of both the
Sections, it can be said that exercise of powers


10


under Sec.397 and Section 482 of the Code are
by and large similar in granting relief to the
aggrieved party, except that of interlocutory
order and of second revision by the same party.
If the order is of such a nature as contemplated
under sub-sections (2) and (3) of Section 397 of
the Code, then the only remedy available to the
aggrieved party is by way of a petition under
Section 482 of the Code within its four corners.
But, if these two Sections are looked into in the
light of the words used, Section 397 is confined
to the extent of examining the correctness,
legality or propriety of the order, whereas
inherent powers can be exercised to give effect
to any order given under this Code or to prevent
abuse of the process of any Court or to secure
the ends of justice.

10. It is noticed rather shocking that in many of
the cases, aggrieved parties are trying to

11


approach the High Court in similarly situated
cases either under Section 397 or under Section
482 of the Code as advised or both the remedies
simultaneously through one or other party of the
same case. For instance, this Court came with a
situation when in a same case of framing
charges on 22.8.06 against three accused
u/ss.420, 467, 468 read with 120B IPC, one of
the accused Niranjan Kumar preferred a Misc.
Petition u/s.482 of the Code & another accused
Avadh Bihari filed revision being S.B.Cr.Revision
No.1025/07 under Section 397 of the Code in
this Court, which, on being noticed, have been
tagged together. Likewise, in Cr.Misc.Petition
No.736/99, accused, who was a Pradhan of
Panchayat Samiti, Dungla, on one hand,
challenged FIR for its quashing u/s.482 of the
Code, which was stayed by the High Court and
on the other hand, challenged the order of
Judicial Magistrate, who took cognizance u/s.509


12


IPC on the same facts in this Court u/s.397 of
the Code by way of filing Cr.Revision
No.742/1999, resulting in its dismissal in the
light of Natwarlal vs. State reported in 2008(1)
CrLR (Raj) 617. During pendency of this petition,
the accused was acquitted and the Misc. Petition
was dismissed as having become infructuous at
the request of learned counsel for the petitioner.
Certain more examples may be noticed of the
like nature in this Court and other High Courts
as well. Whether the High Court has some check
to control this dual process, which can be
termed as riding on two horses by the parties to
the litigation or abuse of the process by the
Courts itself? Answer to this lies by declaring a
definite law based on logical conclusion to give
proper effect to the provisions of this Code as
embodied u/ss.397 and 482 of the Code. Certain
judgments of the Hon'ble Apex Court are of wide
importance to determine the ratio in this regard,


13


which will be discussed hereinafter.

11. Broadly speaking, Section 397 of the Code
operates when the order is final because there is
a bar in filing revision under Section 397(2) with
regard to interlocutory order or u/s.397(3) in
second revision. Against such interlocutory
orders or second revisions, if they cover under
any of the three contingencies, provided-for
under Section 482 of the Code and as referred-
to above, the aggrieved party can approach the
High Court under Section 482 of the Code. The
order is said to be final under this Code, when
either the criminal proceedings are terminated
or they are commenced. Chapter XVI of the Code
deals with the commencement of proceedings
and Chapter XVII onwards of the Code deals
with the charge. Proceedings are said to have
commenced when a complaint is not dismissed
under Section 203 of the Code and the process

14


is issued against the accused under Section 204
of the Code and the trial is commenced when the
charge is framed under Chapter XVII of the
Code. Section 203 of the Code is limited to the
extent that if there are no sufficient grounds for
proceeding, the magistrate shall dismiss the
complaint and after issue of the process or when
the accused is brought before the court through
police investigation, he is discharged, when the
charge is groundless either under Section 239 of
the Code or under Section 245 of the Code, from
evidence, no case is made out, if unrebutted,
would warrant his conviction or no sufficient
grounds are made out under Section 227 of the
Code. This commencement of proceeding or
putting a person to face trial and discharge of
the accused i.e. termination of proceedings of
trial is termed as final order. Rest are said to be
interlocutory orders. This view has been
reiterated by the Hon'ble Supreme Court in


15


Amarnath vs. State of Haryana reported in AIR

1977 SC 2185 in the following terms:

“...It is difficult to hold that the impugned
order summoning the appellants
straightaway was merely an interlocutory
order which could not be revised by the High
Court under sub-sections (1) and (2) of
Section 397 of the 1973 Code. The order of
the Judicial Magistrate summoning the
appellants in the circumstances of the
present case, particularly having regard to
what had preceded, was undoubtedly a
matter of moment, and a valuable right of
the appellants had been taken away by the
Magistrate in passing an order prima facie in
sheer mechanical fashion without applying
his mind. We are, therefore, satisfied that
the order impugned was one which was a
matter of moment and which did involve a
decision regarding the rights of the
appellants. If the appellants were not
summoned, then they could not have faced
the trial at all, but by compelling the
appellants to face a trial without proper
application of mind cannot be held to be an
interlocutory matter but one which decided
a serious question as to the rights of the
appellants to be put on trial.”

12. In the present petitions, both the
petitioners have challenged the order of taking

cognizance i.e. initiation of proceedings being a


16


matter of moment for putting them on trial,
which is not an interlocutory order but a final
order, by way of these petitions filed u/s.482
CrPC. In this regard, if the law is looked into,
the leading case on this subject is of the larger
Bench of the Hon'ble Supreme Court in Madhu
Limaye vs. State of Maharashtra reported in AIR
1978 SC 47. While discussing the scope of
Section 482 and 397(2) of the Code, the Hon'ble
Supreme Court laid down the following principles
with regard to exercise of inherent powers by
the High Court:

“8. xxx At the outset the following principles
may be noticed in relation to the exercise of
the inherent power of the High Court which
have been followed ordinarily and generally,
almost invariably, barring a few exceptions:

(1) That the power is not to be resorted to if
there is a specific provision in the Code for
the redress of the grievance of the
aggrieved party;
(2) That it should be exercised very

sparingly to prevent abuse of process of any
Court or otherwise to secure the ends of



17


justice;

(3) That it should not be exercised as
against the express bar of law engrafted in
any other provision of the Code.
13. In the said decision, the Hon'ble Supreme
Court has also gone into the scope of
interlocutory order and has held that the order
under challenge was not an interlocutory one so
as to attract the bar of sub-section(2) of Section
397 of the Code. In this case, appellant Shri
Madhu Limaye was put to trial for the offence
u/s.500 IPC before the Court of Sessions Judge,
Greater Bombay, in pursuance to the sanction
issued by the State Govt. under Sec.199 of the
Code for making defamatory press note against
the then Law Minister of Maharashtra Shri
A.R.Antulay. Learned Sessions Judge took
cognizance and process was issued upon the
said complaint. The Chief Secretary to the Govt.
of Maharashtra was to be examined as a witness

18


to prove the sanction but the appellant Shri
Madhu Limaye filed an application before the
learned Sessions Judge to challenge the legality
of the trial. The learned Sessions Judge rejected
the application and framed charge u/s.500 IPC.
The appellant thereafter challenged the order by
way of revision in the High Court u/s.397 of the
Code. The High Court dismissed the revision
without entering into the merits of the case by
holding that the order being interlocutory in
nature, it was not maintainable in view of the
provisions contained in sub-sec.(2) of Section
397 of the Code. Against this, the appeal was
preferred. While discussing the scope of
interlocutory order, the Hon'ble Supreme Court
observed in para 13 as under:

“...On the one hand, the legislature kept
intact the revisional power of the High Court
and, on the other, it put a bar on the
exercise of that power in relation to any
interlocutory order. In such a situation, it
appears to us that the real intention of the


19


legislature was not to equate the expressing
“interlocutory order” as invariably being
converse of the words “final order”. There
may be an order passed during the course of
a proceeding which may not be final in the
sense noticed in Kuppuswami's case (AIR
1949 FC 1) (supra), but, yet it may not be
an interlocutory order – pure or simple.
Some kinds of order may fall in between the
two. By a rule of harmonious construction,
we think that the bar in sub-s.(2) fo S.397
is not meant to be attracted to such kinds of
intermediate orders. They may not be final
orders for the purposes of Art.134 of the
Constitution, yet it would not be correct to
characterise them as merely interlocutory
orders within the meaning of S.397(2). It is
neither advisable, nor possible to make a
catalogue of orders to demonstrate which
kinds of orders would be merely, purely or
simply interlocutory and which kinds of
orders would be final, and then to prepare
an exhaustive list of those types of orders
which will fall in between the two. The first
two kinds are well known and can be culled
out from many decided cases. We may,
however, indicate that the type of order
with which we are concerned in this case,
even though it may not be final in one
sense, is surely not interlocutory so as to
attract the bar of sub-sec.(2) of S.397. In
our opinion, it must be taken to be an order
of the type falling in the middle course.”

14. In para 17 of the said judgment, the Hon'ble
Supreme Court lastly observed as under:


20


“Before we conclude we may point out an
obvious, almost insurmountable, difficulty in
the way of applying literally the test laid
down in Kuppuswami Rao's case (AIR 1949
FC 1) and in holding that an order of the
kind under consideration being not a final
order must necessarily be an interlocutory
one. If a complaint is dismissed under S.203
or under S.204(4) or the Court holds the
proceeding to be void or discharges the
accused, a revision to the High Court at the
instance of the complainant or the
prosecutor would be competent, otherwise it
will make S.398 of the new Code otiose.
Does it stand to reason, then, that an
accused will have no remedy to move the
High Court in revision or invoke its inherent
power for the quashing of the criminal
proceeding initiated upon a complaint or
otherwise and which is fit to be quashed on
the face of it? The legislature left the power
to order further inquiry intact in S.398. Is it
not then in consonance with the sense of
justice to leave intact the remedy of the
accused to move the High Court for setting
aside the order adversely made against him
in similar circumstances and to quash the
proceeding? The answer must be given in
favour of the just and reasonable view
expressed by us above.”

Accordingly, the Hon'ble Supreme Court

allowed the appeal and remanded the case back

to the High Court for disposal on merits in the

light of the above judgment.


21


15. Apart from laying down the three principles
as referred-to above with regard to exercise of
inherent powers u/s.482 of the Code, the
Hon'ble Supreme Court also relied upon its
earlier judgment in R.P.Kapur v. The State of

Punjab reported in AIR 1960 SC 866, wherein
the Hon'ble Gajendragadkar J., as he then was,
laid down three categories of cases, wherein
inherent powers u/s.561A of the old Code
corresponding to Section 482 of the Code, can
be exercised. Firstly, where the institution or
commencement of the criminal proceeding is
against the legal bar; secondly from the bare
reading of the FIR or the complaint at the face
value, no offence is made out; and thirdly, there
is no legal evidence in support of the case but
while exercising the powers u/s.561A, the High
Court would not embark upon an enquiry as to
whether the evidence in question is reliable or
not. Even if the order is not final by way of


22


termination of proceedings and the continuance
of proceedings in a criminal court manifestly
shows that there is a legal bar against the
institution or continuance of the criminal
proceeding or the court exercised jurisdiction,
which was not vested in it, the High Court would
be justified in quashing the proceedings.

16. Thus, from the above judgment of Madhu
Limaye's case (supra), it can be gathered that
the order of taking cognizance and framing
charge cannot be termed as an interlocutory
order and the revision is maintainable against
this order and when there is a specific provision
for redress of the grievance of an aggrieved
party, the inherent powers u/s.482 CrPC cannot
be exercised.
17. In the other rulings of regular Benches cited
by learned counsel for the petitioner namely (1)

23


State of Haryana v. Bhajanlal reported in AIR
1992 SC 604; (2) M/s Pepsi Foods Ltd. v. Special
Judicial Magistrate reported in 1998 Cr.L.R.(SC)
18; (3) K. Ramakrishna Vs. State of Bihar,
reported in 2000 (4) Crimes 113 (SC), (4)
S.W.Palanitkar v. State of Bihar reported in
2001 Cr.L.R. (SC) 751; (5) N.K.Sharma v.
Abhimanyu reported in (2006) 2 SCC (Cri) 135;
and (6) Bholu Ram v. State of Punjab reported
in (2008) 3 SCC (Cri) 710, wherein the scope
and ambit of only Section 482 of the Code, has
been discussed as is provided for in the Section
itself, without there being any reference to
Section 397 of the Code as has been discussed
in the Larger Bench's decision of the Hon'ble
Supreme Court in Madhu Limaye's case (supra).

18. In Adalat Prasad Vs. Rooplal Jindal & Ors.,
reported in 2004 Cr.L.R. (SC) 800, the Larger
Bench of the Hon'ble Supreme Court while

24


confirming the order of the High Court held that
recalling summons issued by the Magistrate
under Section 204 of the Code will be a review
of its earlier order, which is not warranted under
the Code as the process is issued under Section
204 of the Code when complaint is not dismissed
under Section 203 of the Code. Opposite earlier
view taken by the three Judges Larger Bench in

K. K. Mathew Vs. State of Kerala & Anr.,
reported in (1992) 1 SCC 217 was held not to
be a correct law by holding that in the absence
of any review power or inherent power with the
subordinate courts, the remedies lie in invoking
Section 482 of the Code. Issue relating to scope
of Section 397 of the Code was also not involved
in this cited case as well.
19. On the applicability of Section 482 of the
Code despite there being alternative remedy
under Section 397 of the Code, leaned counsel

25


for the petitioner has cited the latest decision of
Dhariwal Tobaco Products Ltd. v. State of
Maharashtra decided by the Hon'ble Supreme
Court on 17.12.08 in Criminal Appeal No.2055 of
2007 (Arising out of SLP (Cri.) No.2272 of
2007). This was a case under the Prevention of
Food Adulteration Rules, 1955, wherein a
criminal complaint against a Company was filed,
which was dealing in the manufacturing of the
`Gutkha' having multiple Units. The learned
Magistrate took cognizance and issued summons
against which they filed a petition in the High
Court u/s.482 of the Code, which was dismissed
against which the appeal was filed in the Hon'ble
Supreme Court, wherein, at Para 10 it has been
held as under:

“10. Inherent power of the High Court is not
conferred by statute but has merely been
saved thereunder. It is, thus, difficult to
conceive that the jurisdiction of the High
Court would be held to be barred only
because the revisional jurisdiction could


26


also be availed of. (See Krishnan and Anr.

v. Krishnaveni and Anr. MANU/SC/0223/
1997). In fact in Adalat Prasad v. Rooplal
Jindal and Ors. MANU/SC/0688/2004 to
which reference has been made by the
learned Single Judge of the Bombay High
Court in V.K. Jain and Ors. (supra) this
Court has clearly opined that when a
process is issued, the provisions of Section
482 of the Code can be resorted to.”
20. In the said decision of Dhariwal's case
(supra), though the scope of Section 482 of the
Code has been discussed in the light of Art.227
of the Constitution but it has been observed
while relying upon the decision of the Hon'ble
Supreme Court in C.B.I. v. Ravi Shankar
Srivastava, MANU/SC/8405/2006 that inherent
powers under this Section, though wide, has to
be exercised sparingly, carefully and with
caution and it is to be exercised ex debito
justitiae to do real and substantial justice for
the administration of which alone the courts
exist. The ratio of the said case is that such
powers can be exercised, when there is an abuse

27


of the process of law of any court or to secure
the ends of justice. While allowing the appeal,
the case was remitted back to the High Court for
fresh decision on merits. In the said case also,
the earlier judgment of the larger Bench of the
Hon'ble Supreme Court in Madhu Limaye's case
(supra) has not been referred-to.

21. Thus, taking guidelines on the law laid down
by the larger Bench in Madhu Limaye's case
(supra) on the basis of the doctrine of star
decisis, which is a strong rule of precedent, I am
fortified with the view that when the petitioners,
who are aggrieved by the order of taking
cognizance, have a specific provision under the
Code for redressal of their grievances by way of
filing revision under Section 397 of the Code,
they cannot invoke the inherent powers of this
Court under Section 482 CrPC because the order
of taking cognizance is final one, not being an

28


interlocutory order. The revision can very well
be maintained before the learned Sessions Judge
as held by this Court in Natwarlal vs. State
reported in 2008(1) CrLR (Raj) 617.

22. This Court could have exercised the power
under Section 482 of the Code, had there been a
case from the perusal of the complaint that the
action of taking cognizance is without
jurisdiction or barred by law, which has resulted
in abuse of the process of law or is necessary to
secure the ends of justice, specially when
affected party for one or the other reason could
not resort to the remedy available u/s.397 of the
Code. The legality or correctness of the order in
appreciating evidence for the purpose of taking
cognizance and charge is purely a subject matter
of examination under Section 397 of the Code.
23. Likewise, the duty of superintendence under

29


Section 483 of the Code is confined only to the
extent of expeditious and proper disposal of
cases. Duty cast upon the High Court under this
Section is alike of an administrative nature,
which can be read with the inherent powers
under Section 482 of the Code, being a saving
provision where there is no other power to
interfere.

24. From the facts as stated above and the
statements recorded by the police during
investigation in Sanjay Bhandari's petition,
petitioner took the hotel by way of agreement on
rental basis but he had neither run the hotel nor
licence fee was deposited and on the contrary,
he purchased valuable cars from the foreign
Company in the name of tourism and thereby
alleged to have committed an act of cheating.
These allegations cannot be termed as purely of
civil nature, but is an offence u/s.420 IPC.

30


25. In Misc. Petition filed by P.I.Industries Ltd.,
petitioner was charged for having misbranded
the insecticide product. Objections with regard
to not sending of second sample or consent etc.
could have been raised even during the course
of trial or by way of filing revision before the
learned Sessions Judge.
26. From the face value of both the complaints,
neither the magistrate while taking cognizance,
has abused the process of law nor the cases are
of such nature, which bars his jurisdiction or
which comes under the category of civil nature
so as to attract the provisions of Section 482
CrPC. The appropriate remedy available to the
petitioners is to approach the revisional court
under Section 397 of the Code, if they so desire
and in that event, the period consumed in the
petition shall not come in the way for the
purpose of limitation.

31


27. Consequently, both these Misc. Petitions are
dismissed with the above observations.
(DEO NARAYAN THANVI), J.

RANKAWAT JK, PS