2024 (1) TMI 1206 - HC - GST

Challenging the FIR - Recovery of goods without payment of Goods and Services Tax - involvement of GST officials and other government officials who were running racket for GST - cheating - criminal conspiracy - HELD THAT - When the allegations prima facie disclose a cognizable offence, then the police is under a statutory obligation to investigate the same and concluding the investigation by either launching prosecution or by filing a closure report. In between the FIR can only be quashed if investigation is almost completed on all important aspects and remaining investigation will not unfold any significant fact or not likely to unearth any evidence which is likely to change the outcome of the FIR itself. Otherwise the FIR can be quashed and criminal proceedings can be disrupted under Section 482 CrPC only when the investigation is complete in all material particulars. In this case, it has been brought to the notice by the State that four diaries were recovered in which there was a mentioning of payment of bribe to the government officials, who in-turn would lead to petitioner s transporting the goods without payment of taxes. Thus, whether it is a case only of Section 122 of CGST Act 2017 or Section 420 120B IPC and/or under PC Act, it is the matter of investigation which is continuing. If this Court disrupts criminal proceedings at this stage, it would amount to interference in the powers of police to investigate and also it would be violative of statutory provisions of CrPC where police has been authorized to conduct investigation within the reasonable time till they come out with either closure report or a report under Section 173 CrPC. The present petition is premature and this Court cannot scuttle and disrupt the investigation by quashing the FIR for the reason of recovery of diaries pointing towards payment of bribe. Be that as it may, the petitioner shall be at liberty to file a fresh petition for quashing of FIR when he receives a report under Section 173 CrPC., provided the same is filed against the petitioner. Petition dismissed.

Summary

Issues involved:
The issues involved in the judgment are quashing of FIR related to GST evasion and criminal conspiracy involving government officials.

Details of the Judgment:

Issue 1: Quashing of FIR related to GST evasion
The petitioner, not the owner of the firm and vehicle involved in the recovery of goods without payment of GST, sought quashing of the FIR. The petitioner's counsel argued that since the allegations were only regarding tax evasion, the petitioner cannot be tried under the Indian Penal Code. The counsel highlighted that the Central Goods and Services Tax Act, 2017 provides specific provisions for punishing offenses related to obstruction to public servants under GST. The State contended that the case was not solely about GST evasion but also involved cheating and criminal conspiracy with government officials. The State emphasized the recovery of diaries indicating bribery to government officials, linking them to the petitioner's involvement in transporting goods without paying taxes.

Issue 2: Criminal conspiracy involving government officials
The State argued that the case was primarily about cheating and criminal conspiracy involving government officials, GST officials, and the petitioner and his father. The State mentioned the registration of a composite FIR for violations of the Prevention of Corruption Act and the Indian Penal Code. The recovery of diaries containing references to bribes to government officials was highlighted as evidence of the conspiracy. The Court noted that the investigation was ongoing and that disrupting the criminal proceedings at that stage would interfere with the police's statutory obligation to investigate and potentially violate the provisions of the Criminal Procedure Code. The Court dismissed the petition as premature, allowing the petitioner to file a fresh petition after receiving the investigation report under Section 173 of the CrPC.

In conclusion, the Court dismissed the petition seeking quashing of the FIR, stating that the investigation was ongoing, and disrupting the criminal proceedings at that stage would interfere with the police's statutory duty to investigate. The petitioner was granted the liberty to file a fresh petition after receiving the investigation report under Section 173 of the CrPC.