2025 (3) TMI 822 - HC - GST

FIR quashment petition dismissed in Rs.500 crore GST evasion case involving fabricated invoices under IPC Sections 420, 467, 468, 471, 120-B

KISHORE WADHWANI Versus THE STATE OF MADHYA PRADESH AND OTHERS

MP HC dismissed petition seeking quashment of FIR under IPC Sections 420, 467, 468, 471, 120-B involving fabricated tax invoices and GST evasion of Rs.500 ... Seeking quashment of FIR for the commission of offences punishable under Sections 420, 467, 468, 471 & 120-B of the Indian Penal Code - constitutional validity of Section 132(6) of the Central Goods & Services Tax Act, 2017 - HELD THAT:- In the present case, the petitioner is not being prosecuted for any offence under the CGST Act for which the Enforcement Case Information Report (ECIR) was registered, and the investigation is ongoing on. The present FIR is registered under various sections of I.P.C. as the present petitioner has fabricated a large number of tax invoices to show on record vide circulation of Dabang Duniya. The GST evasion of Rs.500 crore is said to have been adjusted in the sale of Daband Duniya by showing the artificial sale of one lakh copies per day, whereas the actual sale was five to eight thousand. The GST Authorities also found various fake invoices to transform black money into white, therefore, this case is triable under Sections 420, 467, 468, 471 & 120-B of the IPC and not under the provisions of the CGST Act. The only link is that the GST amount which the petitioner did not pay to the Government was tried to make white by his sister concern Daband Dunia Publication Private Limited owned by the present petitioner. There are no ground to interfere with the investigation which is going on against the present petitioner. Conclusion - i) The petition seeking quashment of the second FIR is dismissed, as the FIR addressed separate criminal conduct under the IPC. ii) The challenge to the constitutional validity of Section 132(6) of the CGST Act is rejected, affirming its protective purpose. Petition dismissed. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment include: Whether the registration of the second FIR against the petitioner is permissible under the law, given the existence of a prior FIR for similar allegations. The constitutional validity of Section 132(6) of the Central Goods & Services Tax Act, 2017.ISSUE-WISE DETAILED ANALYSISIssue 1: Registration of Second FIRRelevant Legal Framework and Precedents:The petitioner challenged the registration of the second FIR on the grounds that it constitutes a misuse of the legal process, citing precedents such as T.T. Antony v/s The State of Kerala and Amitbhai Anilchandra Shaj v/s Central Bureau of Investigation, which establish that a second FIR is not permissible for the same cognizable offence.Court's Interpretation and Reasoning:The Court noted that the second FIR pertains to allegations of forgery and cheating related to the publication of fraudulent advertisements in the Dabang Dunia Newspaper, which is distinct from the GST-related offences in the first FIR. The Court emphasized that the scope of the two FIRs is different, with the second FIR focusing on IPC offences rather than CGST Act violations.Key Evidence and Findings:The investigation revealed the use of fake invoices and inflated newspaper circulation figures to launder money, which were unrelated to the GST evasion charges in the first FIR. The police collected 904 tax invoices, and statements from individuals denying their signatures on receipts further substantiated the allegations of forgery.Application of Law to Facts:The Court applied the principles from the cited precedents to determine that the second FIR was legitimate, as it addressed distinct criminal acts involving forgery and cheating, separate from the GST-related offences.Treatment of Competing Arguments:The Court dismissed the petitioner's argument that the second FIR constituted double jeopardy, as the allegations and legal provisions involved were distinct from those in the first FIR.Conclusions:The Court concluded that the second FIR was valid and did not constitute an abuse of the legal process, as it addressed separate criminal conduct.Issue 2: Constitutional Validity of Section 132(6) of the CGST ActRelevant Legal Framework and Precedents:Section 132(6) of the CGST Act places an embargo on the registration of complaints without the Commissioner's permission, intending to protect individuals from false complaints.Court's Interpretation and Reasoning:The Court found no merit in the challenge to the constitutional validity of Section 132(6), as the provision serves as a safeguard against unwarranted prosecutions and does not infringe upon constitutional rights.Key Evidence and Findings:The petitioner did not present any substantive arguments or evidence to demonstrate misuse or unconstitutionality of Section 132(6).Application of Law to Facts:The Court determined that Section 132(6) was not relevant to the present FIR, which involved IPC offences rather than CGST Act violations.Treatment of Competing Arguments:The lack of argumentation from the petitioner regarding Section 132(6) led the Court to dismiss the challenge to its validity.Conclusions:The Court upheld the constitutionality of Section 132(6), finding it to be a protective measure rather than an unconstitutional provision.SIGNIFICANT HOLDINGSCore Principles Established: The Court reaffirmed that a second FIR is permissible when it pertains to distinct offences arising from separate transactions, even if related to the same parties. Section 132(6) of the CGST Act is constitutional and serves as a safeguard against frivolous complaints.Final Determinations on Each Issue: The petition seeking quashment of the second FIR was dismissed, as the FIR addressed separate criminal conduct under the IPC. The challenge to the constitutional validity of Section 132(6) of the CGST Act was rejected, affirming its protective purpose.The Court concluded by directing the completion of the ongoing investigation within two months and dismissed the writ petition without costs.