JUDGMENT
K.C. Gupta, J.
1. This criminal revision petition has been directed by the Income-tax Officer, Survey Circle, Rohtak, against the order dated October 26, 1990, passed by the learned Sessions Judge, Rohtak, whereby the criminal revision filed against the order dated March 13, 1989, passed by the Judicial Magistrate First Class, Rohtak, vide which the respondents were summoned under Section 276C/277 of the Income-tax Act, 1961, read with Section 465/467/471 of the Indian Penal Code, was accepted and the impugned order was set aside and further the respondents were discharged.
2. Briefly stated, the facts are that on March 30, 1983, the Income-tax Officer, Rohtak, filed a complaint under Section 276C/277 of the Income-tax Act read with Section 465/467/471 of the Indian Penal Code, against Janta Trading Company and Vinod Kumar Jain and others on the allegations that Janta Trading Co., was a partnership firm while the other three accused, namely, Vinod Kumar Jain, Kala Wati Jain and Ravi Kanta Jain, were its partners and they were carrying on the business of sale and purchase of cement. It was further alleged that on December 14, 1982, a survey under Section 133A of the Income-tax Act was carried out at the business premises of the respondents. It was found that the respondents had maintained two godowns and had further maintained the stock register, cash book and ledger, etc. According to the stock register, the opening balance as on December 13, 1982, was shown to be 899 bags of cement but on physical verification, it was found short by 561 bags of cement which shows that those bags had been sold and had not been accounted for in the books of account and entries were not made with respect to the sale of 561 bags of cement in the cash book.
3. It was further alleged that Vinod Kumar Jain, the respondent, was asked to explain the shortage of 561 bags of cement and he made statement on December 14, 1982, that those bags were sold to one Lala Hukum Chand Jain, the trustee of Gaushala, G. T. Road, Panipat, but the cash memos had not been issued as the sale was made on credit. It was further alleged that when confronted with the position that cash book had been written only up to December 10, 1982, Vinod Kumar Jain, the respondent, stated that since there was no transaction, he had not made any entry. However, on enquiry made from Panipat, it was revealed that Lala Hukum Chand Jain had not purchased 561 bags of cement in his individual capacity or as a trustee of the aforesaid Gaushala.
4. It was next alleged that the statement of Rattan Kumar, accounts clerk of the Gaushala, was recorded wherein he has stated that the said Gaushala had purchased 200 bags of cement on December 4, 1982, from Janta Trading Co., Rohtak, while Rs. 10,000 were paid on December 10, 1982, and Rs. 3,596 were paid to Nem Chand of Panipat through whom cement was purchased and no cement was purchased from Janta Trading Co. or Joti Parshad on December 14, 1982. It was also alleged that after collecting the said information Vinod Kumar Jain was confronted with it and he stated that he had made the statement since his father had told him this on telephone and the telephone talk could not be completed as it had gone out of order and in fact 561 bags of cement were sold by his father to Lala Hukum Chand Jain, Gopi Ram and Ram Sarup and further that 281 bags of cement were sold to Ram Sarup, 140 bags to Lala Hukum Chand Jain and 140 bags to Gopi Ram vide bills Nos. 808, 809 and 811 and the said sales had taken place through Lala Hukum Chand Jain and the cement was despatched through three goods receipts bearing Nos. 260, 261 and 262 to the aforesaid persons through truck No. RSB 4480.
5. It was further revealed that the said truck did not pass through Gohana Octroi post. Again, the statement of Lala Hukum Chand Jain was recorded on February 9, 1983, wherein he stated that he had not purchased any cement from Joti Parshad or from Janta Trading Co. on December 14, 1982. It was also alleged that signatures of Lala Hukum Chand Jain on the statement, did not tally with the signatures made on the goods receipts and, as such, the said goods receipts were forged and fabricated.
6. With these allegations, it was alleged that the respondents have made false statement having reason to believe the said statement to be false and, as such, committed the offence punishable under Section 193/196 of the Indian Penal Code. Further they were under legal obligation to maintain the books correctly which they have not done and, as such, have committed the offence punishable under Section 276C of the Income-tax Act and also that the respondent had made false statement knowing it to be false and, as such, have committed the offence under Section 277 of the Income-tax Act.
7. It was next alleged that the respondents have forged the books of account, cash memos, etc., and fraudulently, dishonestly and have also used the same as true knowing or having reason to believe the same to be forged and, as such, committed an offence punishable under Section 465/467/471 of the Indian Penal Code.
8. After recording preliminary evidence, the learned magistrate summoned the respondents vide order dated March 30, 1983. In the presence of the respondents, pre-charge evidence was recorded which was closed on March 13, 1989.
9. After hearing learned counsel for the parties, the learned magistrate charged Janta Trading Co. and Vinod Kumar Jain under Sections 276C and 277 of the Income-tax Act and under Section 465/467/471 of the Indian Penal Code, vide order dated March 13, 1989, to which they pleaded not guilty and claimed trial. However, the remaining accused were discharged.
10. Aggrieved by the said order of framing charge, the accused, Janta Trading Co. and Vinod Kumar Jain, filed a revision petition which was accepted by the learned Sessions Judge, Rohtak, vide order dated October 26, 1990.
11. Aggrieved by the said order, the complainant has filed the present criminal revision petition under Section 482 of the Criminal Procedure Code.
12. I have heard Mr. R. P. Sawhney, senior advocate, with Mr. P. S. Dhaliwal, learned counsel for the petitioner, Mr. Harsh Kinra, learned counsel for the respondents, and carefully gone through the file.
13. It is an admitted fact that the Income-tax Department had made a survey under Section 133A of the Income-tax Act by carrying out a raid in the premises of the respondents on December 14, 1982. It is alleged that the respondents had kept two godowns and had maintained the stock register, cash book and ledger, etc. There is also no denying the fact that in the stock register, the opening balance as on December 13, 1982, was found to be 899 bags of cement. However, on physical verification, the bags of cement were found short by 561. Now the question to be seen is whether the respondents had wilfully concealed the sale of 561 bags of cement or it was just an omission and they had no time to make entries in the cash book and the ledger regarding the sale of 561 bags of cement. The very fact that the respondents had entered in the stock register 899 bags of cement shows that they had no wilful intention to conceal the sale of cement bags or to evade any tax. According to the respondents 561 bags of cement were sold and despatched to Panipat on December 14, 1982, itself through truck No. RSB 4480 and goods receipts are Nos. 260, 261 and 262. The said goods receipts show that 140 bags of cement were despatched to Lala Hukum Chand Jain, another 140 bags were despatched to Gopi Ram and 281 bags were despatched to Ram Sarup of Panipat through the said truck No. RSB 4480. Bills bearing Nos. 808, 809 and 811 were issued. The petitioner did not make any effort to make enquiries from the truck Union Rohtak to know whether the said goods receipts were genuine or forged. The very fact that they did not make any enquiry, shows that in fact these receipts were genuine. Since, 561 bags of cement were despatched on December 14, 1982, on which date the survey was conducted, so there could be a genuine omission to make entry in the cash book or the ledger book.
14. It is true that Vinod Kumar Jain had initially stated that 561 bags of cement had been sold to Lala Hukam Chand Jain of Panipat for Gaushala but when enquiries were made from him it was found that he had not purchased any cement and when Vinod Kumar Jain was confronted about his statement, he again stated that in fact 140 bags of cement were sold to Lala Hukam Chand Jain, 140 bags to Gopi Ram and the remaining 281 bags of cement had been sold to Ram Sarup. Again Lala Hukam Chand Jain was confronted but he stated that he or the Gaushala had not purchased any cement from Janta Trading Co. It was alleged that the signatures of Lala Hukam Chand Jain on the statement did not tally with his signatures appended on the goods receipt. This shows that officers of the Income-tax Department did not record the statement of Lala Hukam Chand Jain to whom cement bags were actually sold but they recorded the statement of some other Hukum Chand Jain. Lala Hukam Chand Jain and Vinod Kumar Jain, the respondent, were not confronted with each other. Unfortunately, the statement of Lala Hukum Chand Jain was not recorded either at the time of preliminary evidence or after the respondents appeared in court, i.e., in pre-charge evidence. Lala Hukam Chand Jain was not intentionally produced in court on a number of dates. The complaint was filed as far back as on March 30, 1983, and Vinod Kumar Jain, the respondent, appeared on February 5, 1987, and the remaining accused had put in appearance on March 5, 1987, and then the case was fixed for pre-charge evidence. The complainant concluded its evidence on March 13, 1989, but on the summoned date, i.e., October 15/17, 1988, it was reported that Lala Hukam Chand Jain had died. Lala Hukam Chand Jain was the star witness of the complainant. If the complainant had been somewhat vigilant then Lala Hukam Chand Jain could have been easily served and examined before his death. In the absence of his statement it cannot be said that he was the same person to whom Vinod Kumar, the respondent, had sold the cement. Therefore, it cannot be said that the statements exhibits PA and PB which were allegedly made by Lala Hukam Chand Jain are of that very Hukam Chand Jain to whom the respondents had sold the cement on December 14, 1982. PW1 R. C. Ahuja had admitted in his statement that Lala Hukam Chand Jain had made the statement exhibit PA which was recorded by him and he had further made the statement exhibit PB which was made by him in his own hand but the writing in red ink made on the statements exhibits PA and PB was neither in his hand, nor was it recorded in his presence. This shows that subsequently more addition was made to the alleged statement of Lala Hukam Chand Jain with red ink on February 9, 1983, on which also the signatures of Lala Hukam Chand Jain were obtained. Therefore, it is just possible that PW3 N. C. Sharma or PW1 R. C. Ahuja may have obtained the signatures of Lala Hukam Chand Jain on the statements exhibits PA and PB on February 9, 1983, i.e., subsequently while they recorded his statement of their own. Hence, it cannot be said that there is no evidence that 561 bags of cement were not sold to Lala Hukam Chand Jain of Panipat and his associates on December 14, 1982.
15. Counsel for the complainant contended that for framing a charge, prima facie case is to be seen. For this contention, he placed reliance upon an authority of this court in ITO v. Emerson Paul Plastic Co. [1991] 191 ITR 560 in which it was observed that at the stage at which the Magistrate is required to consider the question of framing of charge under Section 245(1) of the Criminal Procedure Code, is a preliminary one and the test of “prima facie” case has to be applied. A prima facie case is not made out where the evidence is totally unworthy of credit or the same is patently absurd or inherently improbable. He has also placed reliance on an authority of the apex court in R, S, Nayak v. A. R. Antulay, AIR 1986 SC 2045, in which regarding the meaning of “prima facie” case is was observed as under (page 564) :
“In R. S. Nayak’s case, AIR 1986 SC 2045, the Supreme Court gave an illustration to bring out the meaning’of the expression ‘prima facie case’. It was stated that if the scales of a pan as to the guilt or innocence of the accused are something like even, at the conclusion of the trial, then, on the theory of benefit of doubt, the case is to end in his acquittal. But, if, on the other hand, it is so at the initial stage of making an order under Section 227 or Section 228, then, in such a situation, ordinarily and generally, the order which will have to be made will be one under Section 228 (charge to be framed) and not under Section 227 (of discharge). Making a reference to Superintendent and Remembrancer of Legal Affairs v. Anil Kumar, AIR 1980 SC 52, in which State of Bihar v. Ramesh Singh, AIR 1977 SC 2018 was quoted, it was observed that the truth, veracity and the effect of the evidence which the prosecution proposes to adduce are not to be meticulously judged. The standard of test, proof and judgment which is to be applied finally before finding the accused guilty or otherwise is not exactly to be applied. At this stage, even a very strong suspicion founded upon materials before the Magistrate which leads him to form a presumptive opinion as to the existence of the factual ingredients constituting the offence alleged may justify the framing of the charge. In determining whether a prima facie case had been made out, the evidence of the witnesses is entitled to a reasonable degree of credit. Where much can be said on both sides, it would be for the trial court to decide whether to accept the evidence or not. For purposes of prima facie case, the same would have been made out. A prima facie case is not made out where the evidence is totally unworthy of credit or the same is patently absurd or inherently improbable. It is obviously not possible to define the expression ‘prima facie case’ because it will vary from case to case.”
16. However, in the present case, the evidence produced by the complainant is totally unworthy of credit or the same is patently absurd or inherently improbable. Thus, no prima facie case is made out. It cannot be said in any manner that the respondents had intentionally or wilfully evaded to make entries in the cash book or ledger book regarding the sale of 561 bags of cement. It is also not proved on record that they had wilfully made any wrong statement. No case is made out under Section 465/467/471 of the Indian Penal Code, as they had not forged any document or any cash or ledger book. It hardly matters that bills bearing Nos. 808, 809 and 811 had been issued from a different bill book, A businessman normally keeps 2/3 bill books at a time. I concur with the reasoning given in the impugned order dated October 26, 1990, passed by the learned Sessions Judge, Rohtak. There is no illegality or infirmity in the same. Hence, the criminal revision petition is dismissed.