GST summons compliance and paid dues barred criminal prosecution for alleged non-compliance, with proceedings quashed as abuse of process.

GST summons under Section 70 were replied to, time was sought and granted, and the tax dues had already been paid in instalments. On those facts, the High Court found no material for deliberate non-compliance and held that criminal prosecution under Section 174 IPC was unwarranted. It noted that the CGST Act provides its own framework for summons, penalty, and tax determination, including Sections 125, 132, and 73, and that no separate tax-determination or recovery proceeding was shown to be pending. The criminal proceedings, including the cognizance order, were therefore quashed as an abuse of process.

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Issues: Whether criminal proceedings under Section 174 of the Indian Penal Code for alleged non-compliance with GST summons were sustainable when the summons had been replied to, time had been sought and granted, and the GST dues stood paid.

Analysis: The summons issued under Section 70 of the Central Goods and Services Tax Act, 2017 were placed on record and the replies sent by the petitioner-company showed that payment had already been made in instalments and further time had been sought. The authority itself granted time and received the subsequent payments. In these circumstances, the material on record did not support a finding of deliberate non-compliance with summons. The Court also noted that the CGST Act provided its own framework for summoning and for penal consequences, including Section 125 and Section 132, and that Section 73 was the mechanism for determination of unpaid tax. Since the dues stood paid and no separate proceeding for tax determination or recovery was shown to be pending, continuation of prosecution under Section 174 of the Indian Penal Code was unwarranted.

Conclusion: The criminal proceedings were not sustainable and were liable to be quashed as an abuse of process of law.

Final Conclusion: The petitions succeeded and the entire criminal proceedings, including the cognizance order, were set aside.

Ratio Decidendi: Where GST summons have been replied to, the authority has entertained the replies and granted time, and the alleged liability has already been discharged, criminal prosecution for non-compliance with summons cannot be continued when the statute itself provides specific penal and recovery mechanisms.

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