| Case ID |
01a5b659-1c3e-4697-b887-50d54a3977e1 |
| Body |
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| Case Number |
D-2741 of 2016 |
| Decision Date |
Apr 12, 1993 |
| Hearing Date |
|
| Decision |
The Supreme Court ruled that the Commissioner of Income-tax is not required to afford an opportunity of hearing to the accused before granting sanction for prosecution under section 279 of the Income-tax Act, 1961. The court clarified that a company, being a juristic person, cannot be punished with imprisonment under sections 276C and 277, which mandates imprisonment; therefore, the prosecution of the company is valid but any punishment imposed will be limited to fines. Additionally, the court emphasized that the principles of natural justice do not apply at the sanctioning stage, as the sanction is an administrative act. The decision highlighted the need for legislative amendments to address the complexities surrounding corporate criminal liability, particularly in cases where mandatory imprisonment is prescribed. |
| Summary |
The case involves Velliappa Textiles Ltd. and the legal implications of prosecuting a company under the Income-tax Act, 1961. The Supreme Court of India addressed whether a company could be sanctioned without an opportunity for a hearing and clarified that while a company cannot face imprisonment, it can be fined. The court stressed the importance of adhering to legislative mandates and the role of the legislature in addressing gaps in corporate criminal liability. The ruling underscores the judicial approach to corporate accountability while navigating the complexities of statutory requirements. This case serves as a crucial reference for understanding corporate legal responsibilities, the interpretation of penal statutes, and the procedural requirements in tax-related prosecutions. |
| Court |
Supreme Court of India
|
| Entities Involved |
Velliappa Textiles Ltd.
|
| Judges |
S. Rajendra Babu,
B.N. Srikrishna,
G.P. Mathur
|
| Lawyers |
T.L.V. Iyer,
S.C. Birla
|
| Petitioners |
|
| Respondents |
Velliappa Textiles Ltd.
|
| Citations |
2003 SLD 3842 = (2003) 263 ITR 550
|
| Other Citations |
P.V. Pai v. R.L. Rinawma ILR 1993 Kar. 709,
Superintendent of Police (CBI) v. Deepak Chowdhary [1995] 6 SCC 225,
S.M. Badsha v. ITO [1987] 168 ITR 332,
Shree Singhvi Bros. v. Union of India [1991] 187 ITR 219,
Kusum Products Ltd. v. S.K. Sinha, ITO [1980] 126 ITR 804,
New York Central & Hudson River Railroad Co. v. United States 53 Lawyers Ed. 613,
Director of Public Prosecutions v. Kent & Sussex Contractors Ltd. [1944] 1 All. ER 119
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
279,
276C,
277,
278
|