The Madras High Court on Tuesday refused to quash criminal prosecution launched by the Income Tax Department against Sivaganga Member of Parliament Karti P. Chidambaram and his wife Srinidhi Karti Chidambaram in 2018 for alleged tax evasion in 2014-15 and 2015-16.
Justice M. Sundar held that the contentions raised by the litigants before the High Court were clearly issues to be canvassed during the course of trial before a Special Court for cases against legislators and not grounds for quashing the entire prosecution before trial.
The allegation against the couple was that they had accepted part payment in cash for selling one of their properties at Muttukadu near Chennai to Agni Estates and Foundations Private Limited but did not disclose the cash receipts in their income tax returns.
Rejecting their preliminary argument that the launch of prosecution was barred by limitation, the judge said, the argument would pale into insignificance in view of applicability of provisions of the Economic Offences (Inapplicability of Limitation) Act of 1974.
The judge also agreed with Special Public Prosecutors N. Baskaran and M. Sheela for I-T department that the prosecution had been launched solely on the basis of searches and seizures and therefore the contention related to absence of any assessment order need not be countenanced.
The SPPs informed the court that the Directorate of Enforcement (ED) had conducted searches in the offices of a private firm named Advantage Strategic Consulting, in which Mr. Chidambaram was one of the former directors, and seized soft copies of certain documents.
Those documents were shared with the I-T sleuths who, in turn, conducted searches in the offices of Agni Estates and Foundations and seized 163 notebooks, the contents of which reportedly corroborated with the soft copies shared by the ED with the I-T Department.
“The third point (regarding the prosecution having been launched solely on the basis of statement made by the land purchaser, a third party) raised by the petitioners gets neutralised by the stated position of the prosecution that there is corroboration,” Justice Sundar said.
Case transfer
Passing a common judgment, he also dismissed two other petitions filed by the couple challenging the recent transfer of the case from the Economic Offences Court presided over by a Metropolitan Magistrate to the Special Court led by a Sessions Judge.
The judge held that the High Court Registry ought not to have transferred the case, triable by a Magistrate, to a Sessions Judge. He, however, concurred with B. Vijay, counsel for the Registry, that the couple had failed to prove any prejudice caused to them due to such transfer.
If the case had been tried by a Magistrate, the petitioners would have got a chance to appeal before a Sessions Court and then file a revision before the High Court.
But now that the case was being tried directly by a Sessions Judge, they could only come on appeal to the High Court.
‘Discretionary relief’
“The argument of petitioners that one tier, namely, the revision under Section 397 of Code of Criminal Procedure is taken away does not hold water as the courts have repeatedly held that the revision under Section 397 is not a legal right and that it is only a discretionary relief,” the judge said.
In the same breath, he expressed displeasure over the High Court Registry having removed a Metropolitan Magistrate’s court in Chennai from the list of special courts designated for trying cases in which Members of Parliament and the Legislative Assembly were involved.
He pointed out that offences which attract up to seven years of imprisonment should be tried by Magistrates and those that attract higher punishment should be tried by Sessions Courts.
Recalling that the Supreme Court had ordered for designation of sufficient number of magisterial as well as sessions courts as special courts to try cases booked against legislators, the judge impressed upon the need to designate one or more Magistrate courts in Chennai as special courts.
