2023 (10) TMI 414 - HC - GST

Validity of criminal proceedings initiated - Non-payment of GST from January, 2018 to November, 2018 before initiation of the investigation - Deliberate ignoring the summons issued by the Central Goods and Service Tax Department u/s 70 of the Central Goods and Service Tax Act, 2017 - non-appearance at any date against four summons issued to the accused - violation of provisions of Section 70 of the CGST Act - HELD THAT - The Court has gone through the materials on the record including the summons, which have been issued to the company and the same are brought on record. The summon contained in Annexure-2, dated 27.12.2018 is addressed to M/s SSK Devcon Private Limited and pursuant to that, the company vide letter dated 29.12.2018 replied the said summon informing the authority concerned that sum of Rs.1,56,20,520/- was deposited on 05.12.2018 and 45 days' further time was requested for depositing further dues. Vide letter dated 14.01.2019 contained in Annexure-4, the authority allowed time and directed to make full payment of GST amount. It is crystal clear that so far as the amount of GST is concerned, that has already been deposited. However in the counter affidavit, it has been stated that sum of Rs.5,21,95,792/- has been received by the authority concerned subject to verification. However, non-filing of any case or initiation of proceeding for any recovery suggest that there is no due against the petitioners. The documents on record clearly suggest that summons have been replied, which was also entertained by the authority by way of granting time. Thus, it cannot be said that this is a case of non-compliance of summon issued by the authority concerned. 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 that 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. The entire criminal proceedings arising out of Complaint Case including the order taking cognizance dated 19.06.2019, pending in the Court of the learned Judicial Magistrate, 1st Class, Ranchi are quashed - Petition allowed.

Summary

Issues Involved:
The judgment involves the issues of quashing criminal proceedings arising from Complaint Case No.1880 of 2019, including the order taking cognizance under Section 174 of the Indian Penal Code.

Details of the Judgment:
The petitions sought to quash criminal proceedings related to non-payment of GST and non-compliance with summonses issued by the Central Goods and Service Tax Department. The petitioners argued that the GST amount had been paid in installments and that the provisions of the CGST Act, 2017 should apply instead of Section 174 of the Indian Penal Code. They contended that the summons had been replied to and that the director of the company should not be held vicariously liable. The opposite party argued that non-appearance without lawful excuse justified the criminal proceedings under Section 174 of the IPC.

The Court examined the materials on record, including the summonses and payment details. It noted that the GST amount had been deposited, and there was no pending recovery against the petitioners. The Court highlighted that Sections 125 and 132 of the CGST Act, 2017 were not invoked against the petitioners. It emphasized that the summonses were replied to and entertained by the authority, indicating compliance. The Court referenced the procedure under the CGST Act for penalties and summoning individuals. It concluded that continuing the proceedings under Section 174 of the IPC would amount to an abuse of process of law.

Therefore, the Court quashed the entire criminal proceedings, including the order taking cognizance, in Complaint Case No.1880 of 2019, dated 15.04.2019, pending in the Court of the learned Judicial Magistrate, 1st Class, Ranchi. The petitions were allowed and disposed of, with any pending Interlocutory Applications also disposed of, and any interim orders granted were vacated.