Can police lodge FIR in tax evasion case questions Guj HC

The Gujarat High Court has posed a critical question to the state government regarding the filing of police complaints in cases of income tax evasion.

“Can the police register a First Information Report (FIR) for tax evasion, or is the Income Tax (IT Department) the appropriate authority for necessary proceedings?” inquired the court.

Justice Nirzar Desai’s probing question left the government in a plight, as it struggled to provide a satisfactory explanation. In light of the lack of clarity from the government, Justice Desai issued a notice to both the state government and the CID Crime in Gandhinagar, prohibiting any action by the authorities. However, the High Court has allowed the investigation to continue.

The state government and CID Crime have been notified, and a stay has been placed on any punitive action while the investigation is ongoing.

In a petition seeking to quash the police complaint regarding tax evasion, the legal issue presented was that the police should not be allowed to register complaints in such cases, as the authority lies solely with the IT Department.

The petitioners argued that proceedings against them were already initiated by the IT Department, so it was inappropriate for the police to file a complaint on the same matter.

The petitioners drew the court’s attention to the fact that the police had filed a complaint against them under various sections of the IPC, including 420, 409, 465, 467, 471, and 120(B), as well as under various provisions of the Income Tax Act. They contended that the police had wrongly registered the complaint, asserting that only the IT Department is authorized to take action in cases of tax evasion. They highlighted that no complaint had been lodged by the IT Department itself, raising the question of how the police could proceed in such a manner.

During the hearing, Justice Desai reprimanded the government, questioning, “If the police will file complaints for tax evasion, what is the purpose of the IT Department?” He further asked, “If you are doing the IT Department’s job, what will they do?” The court pointed out that the FIR in question was based on a report from the IT Department.

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