Court denies petition to quash FIR under Section 482 Cr.P.C. Investigation ongoing, jurisdiction upheld, sanction at prosecution stage.

The Court dismissed the petition seeking to quash the FIR under Section 482 Cr.P.C. The Court held that the inherent powers under Section 482 Cr.P.C. were not justified for quashing the FIR at that stage as the investigation was ongoing, and the allegations would be examined during the trial. The Court also found that the actions of the Excise Taxation Officer were within jurisdiction, and the requirement for the Commissioner's sanction would arise at the prosecution stage, not at the FIR lodging stage.

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Issues Involved:
1. Quashing of FIR under Section 482 Cr.P.C.
2. Allegations of wrong ITC claims under CGST Act, 2017.
3. Jurisdiction and authority of the Excise Taxation Officer.
4. Validity of actions taken without prior sanction of the Commissioner under Section 132(6) of the CGST Act.

Issue-wise Detailed Analysis:

1. Quashing of FIR under Section 482 Cr.P.C.:
The petitioner sought to quash FIR No.321 dated 19.07.2019, registered under Section 132 of the CGST Act, 2017, and Sections 420, 467, 468 & 471 IPC. The petitioner contended that he had resigned from the company on 05.01.2018, which was communicated to the Ministry of Corporate Affairs on 13.01.2018. Post-resignation, he had no role in the company’s affairs. The Court noted that the inherent powers under Section 482 Cr.P.C. are wide and undefined, requiring circumspection. Since the investigation was ongoing and the final report under Section 173 Cr.P.C. had not been presented, the Court refrained from assessing the truthfulness of the allegations. The FIR disclosed prima facie commission of offences, and the correctness of allegations would be examined during the trial.

2. Allegations of wrong ITC claims under CGST Act, 2017:
The petitioner argued that the company claimed 'NIL' transactions for the financial year 2017-18, contradicting the FIR's allegations of Rs. 5,49,68,735/- ITC claims. The State countered that the company, registered by the petitioner, was found to be fake and non-existent, procuring bogus invoices from other firms. The company did not affect any purchase or sale in 2017-18, but for 2018-19, it showed purchases, sales, and huge ITC claims. The petitioner's name remained on the GST portal, and no application for amending the registration certificate was made, indicating his resignation claim was an eye wash.

3. Jurisdiction and authority of the Excise Taxation Officer:
The petitioner contended that the Excise Taxation Officer (ETO) exceeded his jurisdiction by filing the complaint without prior permission from the Commissioner of Central Government as required under Section 132(6) of the CGST Act. The State argued that officers of both Central and State Tax are authorized to initiate enforcement actions irrespective of administrative assignments. The business premises inspection revealed the firm was non-existent, and the petitioner claimed ITC worth Rs. 5,49,68,735/- without physical movement of goods, causing a significant loss to the State exchequer. The ETO's actions were within jurisdiction as the firm was non-existent, and the petitioner's name was still on the GST portal.

4. Validity of actions taken without prior sanction of the Commissioner under Section 132(6) of the CGST Act:
The petitioner argued that the ETO could not set criminal law in motion without the Commissioner’s prior sanction. The Court clarified that Section 132(6) of the CGST Act requires the Commissioner’s sanction for prosecution, which commences when a Magistrate or Court takes cognizance of the offence. Since the investigation was ongoing and no charge-sheet/final report under Section 173 Cr.P.C. had been presented, the complaint by respondent No.2 was not beyond jurisdiction. The requirement for the Commissioner’s sanction would arise only after the investigation and at the stage of presenting the charge-sheet.

Conclusion:
The Court dismissed the petition, stating that the inherent power under Section 482 Cr.P.C. was not justified for quashing the FIR at this stage. The investigation was ongoing, and the allegations would be examined during the trial. The actions of the ETO were within jurisdiction, and the requirement for the Commissioner’s sanction would arise at the prosecution stage, not at the FIR lodging stage.

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