Legal principle

Immunity under the Kar Vivad Samadhan Scheme, 1998 is confined to offences under the direct and indirect tax enactments defined in ss.87(h) and 87(j) — including the Customs Act, 1962 — and cannot be stretched to cover prosecutions under the Prevention of Corruption Act or the IPC, nor does liability to trial under s.132 of the Customs Act preclude a parallel trial for IPC offences on the same facts.

Court decision

Both criminal appeals were dismissed and the High Court's judgment was upheld: the KVSS, 1998 immunity does not cover offences under the Prevention of Corruption Act, 1988 or the Indian Penal Code, and the fact that the appellant could be tried under s.132 of the Customs Act did not mean he could not also be tried under the IPC.

Facts

The CBI alleged that a Toyota Lexus car shipped to Madras Port in 1994 was cleared under the Transfer of Residence scheme on a fabricated invoice (date altered from 13.7.1994 to 13.7.1993 to show a one-year-old car) and a false Foreign Inward Remittance Certificate dated 8.9.1994 issued by the Indian Bank, Abiramapuram Branch, although Current Account No.872 of Tamilarasi Publication had received no foreign remittance — a pre-condition for duty payment under the scheme. The appellant M. Natarajan, publisher of 'Tamilarasi', was charge-sheeted on 30.1.2004 with four others under s.120B read with ss.420/467/471 IPC and s.13(2) read with s.13(1)(d) of the Prevention of Corruption Act, 1988 for causing a loss of Rs.1,06,20,472 to the Customs Department. The customs officers named in the FIR (a retired Commissioner, a former Assistant Collector and a former Appraising Officer) were not sent for trial, departmental action was recommended, and Smt. Bhavani was granted a tender of pardon as approver. Trial commenced (22 witnesses, 82 documents) and the appellant filed a discharge application; his Criminal Revision Case No.538 of 2005 and Criminal O.P. No.21636 of 2005 were dismissed by a Single Judge of the Madras High Court, and those dismissals were challenged in these appeals.

Key provisions

• Section 132, Customs Act, 1962 —  False declaration, false documents,etc
• Section 127H, Customs Act, 1962 — Power of Settlement Commission to grant immunity from prosecution and penalty
• Section 13(2), The Prevention of Corruption Act, 1988 — Criminal misconduct by a public servant.
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 87(j), Customs Act, 1962 — Imported stores may be consumed on board a foreign-going vessel or aircraft
• Section 3, The Prevention of Corruption Act, 1988 — Power to appoint special Judges.
• Section 136, Customs Act, 1962 — Offences by officers of customs