Report No. 61

5.10. Adequacy of punishment-a Gujarat case.-

It is heartening to note that some High Courts are alive to the need for adequate punishment for offences relating to taxes. Thus, for example, in a recent Gujarat case,1 the High Court observed:

"One can understand an offence against the person of an individual committed on account of the emotions of an individual getting the better of his reason When, however, offences against public revenues are committed by businessmen with deliberation, no lenient view of the matter can be taken by the courts. Let it not be forgotten that the public revenues collected by way of taxes from the citizens are inter alia employed by the State for ensuring that the citizens are not deprived of their right to possess property. If offences against public revenue are committed by businessmen, it would amount to robbing the State which prevents them from being robbed by others.

Where a charge is that of filing false returns and of failing to account for sales running into as large a sum of Rs. 1,38,914.31, to impose a penalty of a fine of Rs. 10 (it is no overstatement to make) is to make mockery of the provisions contained in section 63 of the Act. To impose a fine of Rs. 10 can very well be equated with the issuance of a licence to defraud public revenues on payment of Rs. 10. A time has come when the courts cannot afford to take an unduly lenient view of contravention of the provisions enacted by the Legislature to prevent fraud against public revenues."

1. State of Gujarat v. Korimbhat, (1972) 29 STC 95 (97) (Guj) (M.P. Thakkar, J.).