The Tripura High Court while quashing the Order for Police Investigation after cognizance taken by Magistrate ruled that IPC provisions cannot be invoked in case of GST offences without application of Mind.
The petitioner, Sentu Dey is a sole proprietor of one M/S. Sentu Dey, which is registered under Tripura State Goods and Service Tax Act, 2017 and related statutes. On November 27, 2020, Superintendent of State Taxes, Bishalgarh, filed a complaint before the Sub-Divisional Magistrate, Bishalgarh under Section 190 read with Section 200 of Cr.P.C. In the said complaint, the complainant alleged that the petitioner has under-declared the outward taxable turnover and accordingly, paid less tax than he was liable to pay for the period starting from August, 2017 onwards. It is further stated that a sizable demand of Rs.19.74 Crores inclusive of tax, interest and penalty has been raised against the petitioner out of which only an amount of Rs.1.18 Crores could be recovered. Remaining amount of Rs.18.55 Crores (rounded off) still remains unpaid.
Notices were issued to the purchasing dealers of the petitioner, who conveyed to the department that they had already paid their taxes to the petitioner for the purchases made by them from the petitioner. The complainant therefore alleged that the petitioner though had collected the taxes from the purchasing dealers, had not deposited the same in the Government revenue. The petitioner had thus committed offences punishable under Sections 132 of the SGST Act and 406 and 409 of IPC. The request, therefore, was made to the Magistrate to take cognizance of the said offences.
The issue raised was whether the provisions of IPC can be invoked in relation to commission of offence under Section 132 of CGST Act – Dept. filed complaint before the Sub-Divisional Magistrate alleging that the petitioner has under-declared the taxable turnover and short paid the liable tax – cognizance of the offence by the Magistrate – HELD – Section 132 of CGST Act provides punishment for certain offences related to the Goods and Service Tax related acts and omissions. However, certain acts may fall within the said special penal statute and at the same time may also have an element of an offence under IPC – the offences punishable under Section 132 of CGST Act and those under Sections 406 and 409 of IPC operate in different fields.
The Single bench of Chief Justice Akil Kureshi held that a Magistrate cannot revert to calling for police investigation in a case where he has previously taken cognizance of the offences.
However, the court also held that this does not put an end to the complaint lodged before the concerned Magistrate, who shall proceed further in accordance with the law from the stage of taking cognizance of the offences disclosed. This is a case of alleged evasion of GST by the petitioner herein and the consequential complaint lodged by the state GST authorities.
The court said that Section 132 of CGST Act provides punishment for certain offences related to the Goods and Service Tax related acts and omissions. However, certain act may fall within the said special penal statute and at the same time may also have an element of an offence under IPC – the offences punishable under Section 132 of CGST Act and those under Sections 406 and 409 of IPC operate in different fields. In a given case an act or omission on part of the dealer may form offence only under Section 132 of CGST Act. But in a given case where the ingredients of Section 405 of IPC are satisfied, the action can as well amount to offences punishable under Sections 406 and 409 of IPC. However, the Department should not invoke IPC provisions without application of mind in every case.
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