2023 (8) TMI 45 - HC - GST

Validity of bailable and non-bailable warrants issued - GST evasion - Allegation of cretionof fake entities - avoiding the summoning orders - HELD THAT - There is no quarrel with the legal position that in a warrant triable case, after cognizance, the Court has power to issue warrant of arrest under Section 204 of the Cr.P.C. The Court has power to issue summon even in a warrant case, but there is no mandate of law that in all circumstance, even in warrant cases, the Court is bound to issue summons. What has been stated in the case of Santender Kumar Antil 2022 (8) TMI 152 - SUPREME COURT by Hon ble Supreme Court that the Court need to record special reason while issuing warrant in such cases. In the present case, processes have been issued post-cognizance and it has been rightly contended on behalf of petitioners that once the summons had been issued, the Court could issue warrant only after receipt of the service report. Had such a warrant been issued in the pre-cognizance stage during the investigation things would have been different, as the petitioners had been served summons several times, but they deliberately avoided appearance before the investigating agency, despite the direction of this Court to appear before the said agency. The impugned order of issuing the warrant of arrest is set aside - Petition allowed.

Summary

Issues involved:
The judgment involves a challenge to the order dated 07.05.2022 and 17.08.2022 related to Complaint C/1 Case No.1853 of 2019 passed by the Special Judge, Economic Offences, Jamshedpur. The main contention is the issuance of bailable and non-bailable warrants against the petitioners without the receipt of the service report of the summons earlier issued.

Details of the Judgment:

Prosecution Case:
The petitioners, including directors of various companies engaged in trading iron and steel products, are accused of creating fake entities to defraud the government exchequer by availing fake Input Tax Credit (ITC) amounting to over Rs. 100 crores. They were alleged to be avoiding summoning orders and process against them despite being aware of the case.

Argument on Behalf of Petitioner:
The petitioners argued that they had been compliant with tax laws in Chhattisgarh and had responded to summons issued during a search and seizure operation. They challenged the jurisdiction of the authorities and had previously moved the Court regarding summoning orders. Despite the continuous summoning and replies, the petitioners did not appear in compliance with the orders.

Court's Decision:
The Court noted that warrants of arrest cannot be issued without the receipt of the service report of earlier summons. It was emphasized that the petitioners had been avoiding the due process of law, leading to delays in the investigation. While acknowledging the power of the Court to issue warrants in warrant triable cases post-cognizance, the Court set aside the impugned order of issuing the warrant of arrest. The petitioners were directed to appear before the lower Court within two weeks, failing which coercive measures could be taken to ensure their appearance.

Conclusion:
The Criminal miscellaneous petition challenging the warrants of arrest was allowed, setting aside the impugned order. The petitioners were given a two-week deadline to appear before the Court, failing which coercive measures could be taken for their appearance.