Cognizance under GST law requires a complaint and prior sanction; action taken without them was set aside.

Cognizance for offences under the Central Goods and Services Tax Act was found unsustainable where it was taken on an application under Section 167 CrPC without a prior complaint and before sanction had been granted. The record showed cognizance dated 24.07.2018, while sanction was stated to have been issued only on 26.09.2023; in the absence of the statutory complaint and sanction, the initiation of proceedings was contrary to the prescribed procedure. The cognizance order was set aside and the petition was allowed.

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Issues: Whether the order taking cognizance could be sustained when it was passed on an application under Section 167 of the Code of Criminal Procedure, 1973 without a complaint under the Central Goods and Services Tax Act, 2017 and before sanction had been granted.

Analysis: The challenge was to the cognizance order on the ground that prosecution under the tax statute required a complaint and sanction in accordance with the statutory procedure. The record showed that cognizance had been taken on 24.07.2018, whereas sanction was stated to have been granted only on 26.09.2023. In the absence of a complaint and prior sanction, the initiation of cognizance was held to be contrary to the procedure prescribed under the Central Goods and Services Tax Act, 2017.

Conclusion: The order taking cognizance was set aside and the petition was allowed.

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