A Single Bench of the Jharkhand High Court quashed the criminal proceedings for non-compliance with gst summons under Section 70 of the Central Goods and Service Tax Act, 2017 (CGST Act).
The complaint case was filed alleging therein that the accused had taken G.S.T. Registration on 14.12.2017 and has been providing various Taxable Services to various Service recipients since December, 2017, but has not made payment of GST from January, 2018 to November, 2018 before initiation of the investigation.
It was further alleged that the accused deliberately ignored the summons issued by the Central Goods and Service Tax Department under Section 70 of the Central Goods and Service Tax Act, 2017 and did not appear at any date against four summons issued to the accused. It was also alleged that the accused has violated the provisions of Section 70 of the CGST Act and since the accused did not appear against the summons, proceeding under Section 174 of the Indian Penal Code is initiated against the accused person.
The counsel for the petitioners submitted that in view of that, summon has already been replied and there was no occasion on the authority concerned to file complaint case under Section 174 of the Indian Penal Code and that even the Director, namely, Satyendra Singh Kushwah of the said company has been made accused by way of filing amendment petition before the Court which was allowed and there is no averment with regard to the involvement of Satyendra Singh Kushwah, who happened to be the Director of the said company. The counsel further submitted that the statute is not providing any vicarious liability that cannot be imposed.
The counsel for the opposite party no.2 submitted that the petitioner has failed to comply with summons without lawful excuse and intentionally omit to give evidence or to make statement and to produce the documents and the things mentioned in the schedule.
It was further submitted that the authorized representative of the company has not appeared and that is why the complaint case was filed under Section 174 of the Indian Penal Code, which is meant for non-compliance of the direction of the public authority and GST authority is the public authority in view of Section 156 of the CGST Act, 2017.
The Court of Justice Sanjay Kumar Dwivedi observed that “In view of the above facts and considering that the summons were replied, which were entertained by the authority concerned and it cannot be said that the petitioners have not complied with the summons, issued by the authority concerned and further there are procedure prescribed under the CGST Act, 2017 for penalty under Section 125 which restricted to a fine of Rs.25,000/- only and none of the failure prescribed in Section 132 of the said Act is the subject matter of the present cases and further Section 70 of the said Act speaks of procedure to be adopted for summoning, that will in accordance with the Code of Civil Procedure and further considering tha the reply to the summons were entertained by the authority concerned, to allow to continue the proceeding under Section 174 of the Indian Penal Code against the petitioners will amount to abuse of process of law.”
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