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State of Punjab and Anr. vs. M/S. Shikha Trading Co.

Not available · 2023 INSC 773Decided 25 Aug 2023
Not available
Abhay S. Oka · Sanjay Karol

Background

A trading company's shop was sealed by Punjab's Excise and Taxation Department for alleged tax evasion, and it filed a writ petition after the shop was later de-sealed. The Punjab and Haryana High Court, while disposing of the petition as infructuous, went further and directed police to register a criminal case against the Assistant Excise and Taxation Commissioner (AETC), finding he had allegedly filed a false affidavit and backdated an official record. The State of Punjab appealed only against this second part of the order, seeking to protect the officer.

Decision Breakdown

The Supreme Court examined the actual despatch register the High Court had relied on and found no genuine irregularity: variations in ink, handwriting, and language across entries were normal given multiple clerks maintained the register over time, and the entry in question fit sequentially with no signs of tampering. The Court held the High Court's conclusions were based on mere surmise without solid evidentiary basis, and that the officer had never been made a party to the case nor given any opportunity to explain himself before adverse remarks and a criminal investigation were ordered against him, violating well-settled principles on when courts may pass such remarks. It accordingly expunged the adverse observations and closed the FIR/criminal proceedings against the officer, while leaving untouched any question of the company's own alleged tax evasion.

Lesson Learnt

Courts must exercise great caution before directing criminal proceedings or making adverse remarks against a public official, and must not do so without giving that person a chance to be heard: unsupported "surmises" about tampered records are not a lawful basis for branding an officer's conduct criminal.

Official source (sci.gov.in)View Judgment (PDF)

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