OFFENCES AND PROSECUTION IN GST LAW

[Dr. Sanjiv Agarwal]

Meaning of Prosecution

The term ‘prosecution’ has not been defined in GST law. As per Aiyar’s Advanced Law Lexicon, prosecution is the institution or commencement of a criminal proceeding, the process of exhibiting formal charges against an offender before a legal tribunal, and pursuing them to final judgment on behalf of the state or government or by indictment or information. A prosecution exists until terminated in the final judgment of the court, to wit, the sentence, discharge or acquittal.
Prosecution is the institution or commencement of legal proceeding; the process of exhibiting formal charges against the offender. Section 198 of the Criminal Procedure Code defines “prosecution” as the institution and carrying on of the legal proceedings against a person.

In its wider sense, prosecution means a proceeding by way of indictment or information, and is not necessarily confined to prosecution for an offence. [49 CLJ 502:1929 C. 283].

The term ‘prosecution’ implies every prosecution for an offence, whether it is initiated on a private complaint or a police report [ATMARAM AND ORS. VERSUS STATE OF MAHARASHTRA - 1964 (7) TMI 60 - BOMBAY HIGH COURT [Bombay Police Act (22 of 1951), S. 161 (1)]

The word ‘prosecution’ in Article 20(2) of Constitution of India means judicial proceedings before a court or a legal tribunal. It cannot have reference to departmental or disciplinary proceedings taken for inflicting departmental penalty or punishment on an officer belonging to the department for any misconduct. [SURESH CHANDRA VERSUS HIMANGSHU KUMAR ROY AND ORS. - 1951 (5) TMI 23 - CALCUTTA HIGH COURT].

Under section 132 of the CGST Act, 2017, whoever commits any specified offence as per sub-section (1) shall be punishable. ‘Whoever’ would include a taxable person as well as any other person.

Meaning of Offence

The term ‘offence’ has not been defined in GST law. However, following meanings are relevant:

The word, ‘offence’ denotes a thing made punishable by the Code [IPC (45 of 1860), S. 40]. “Offence” shall mean any act or omission made punishable by any law for the time being in force. [General Clauses Act (10 of 1897), Section 3(38)]

A crime; an act or omission punishable by law.[S. 40, I.P.C. (45 of 1860), S. 3(38), General Clauses Act (10 of 1897) and Art. 20, Const.]

Offence is an act committed against law, or omitted where the law requires it, and punishable by it (Tomlin). ‘Offence’ is generally equivalent to a ‘crime’ [per COLLINS, J., Derbyshire Co., vDerby, 65 LJQB 488]. In its legal signification an offence is the transgression of a law; a breach of the laws established for the protection of the public as distinguished from an infringement of mere private rights; a punishable violation of law, a crime, the doing which a penal law forbids to be done or omitting to do what it commands. [See SC 143, Oudh LBR (1893-1900) 315:26 M. 697, I Weir 13, 52 MLJ 251:10 AI 171 (177):10 Cal 109].

The word ‘offence’ in Article 20(1) of the Constitution of India is meant to be something which is a violation of a law in force and for the violation of which the law prescribes a penalty. [Raj Narain Singh v AtmaramGovind, AIR 1954 All 319, 339].

Types of offences

Offences are divided into two categories, viz:

•    Cognizable offences, i.e, where the person can be arrested without ‘warrant’ and
•    Non-cognizable offences, i.e, offences other than above

Cognizable offence

Generally, cognizable offence means serious category of offences in respect of which a police officer has the authority to make an arrest without a warrant and to start an investigation with or without the permission of a court. In terms of sub-section (5) read with sub-section (4) of section 132, the offences specified in section 132(1)(a, b, c, d) and punishable under clause (i) of sub-section (1) shall be cognizable and non- bailable.

To be a cognizable offence, the amount of tax evaded shall exceed INR 5 crores

Non-cognizable offence

Non-cognizable offence means relatively less serious offences in respect of which a police officer does not have the authority to make an arrest without a warrant and an investigation cannot be initiated without a court order. All offences under GST law except offences under section 132(4) shall be non-cognizable and bailable i.e. offences involving tax upto INR 5 crore. In other words, offences which are cognizable are non-bailable and non-congnizable are bailable.

In GAURAV BUDHIA VERSUS UNION OF INDIA - 2009 (10) TMI 836 - JHARKHAND HIGH COURT, it was held that the prosecution is normally launched after adjudication process is completed. In the present case, no complaint was sustainable in terms of section 200 of Code of Criminal Procedure, 1973 as the investigation or enquiry on the allegation was still going on and the adjudication process yet to be completed. It was further held that legislature could not treat same offence as cognizable in one situation and non-cognizable in other situation. Also, whenever an accused is forwarded to police, he has to be either granted bail or presented to Magistrate.

In SANDEEP NAIR VERSUS UNION OF INDIA - 2014 (2) TMI 530 - CHHATTISGARH HIGH COURT, it was held that in case of an offence punishable under Service Tax law, only Criminal Courts are competent to try such offence and Public Prosecutor, Additional/ Assistant Public Prosecutors and Panel Lawyers cannot represent the accused.