Criminal case under s.174 IPC dropped for GST summons compliance; s.70, s.125 CGST Act correctly applied

HC quashed the criminal proceedings under s.174 IPC against the accused company and its officers for alleged non-payment of GST and non-compliance with summons under s.70 CGST Act. The record showed that GST dues had been substantially deposited prior to and during the inquiry, and no recovery proceedings were pending, indicating no outstanding liability. Summons issued to the company were duly replied to, and the authority granted extensions, evidencing compliance rather than wilful disobedience. HC held that s.70 prescribes a procedural mechanism, with penalty governed by s.125 CGST Act, and that invoking s.174 IPC in these circumstances would constitute an abuse of process. Petition allowed.

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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.

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