2021 (9) TMI 552

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....ed by the Additional Director General, Meerut Zonal Unit, Meerut, on the ground that said sanction order has not been issued by a competent authority. 4. Applicant/accused is the Managing Director of M/s Maiden Forgings Private Limited. He is a permanent resident of Ghaziabad and his Unit is operational since 2005 involved in manufacturing of Steel, Bright, Bars and Wires. It is submitted that company purchases raw materials from its suppliers/vendors and perform manufacturing operations thereon and remove the finished goods. There are about 140 persons involved directly and indirectly in the company and it has been making payment of GST over a turnover of approximately Rs. 200 crores since 2018 and income tax around Rs. 43.77 lakhs. It is submitted that allegations on the present applicant is that according to the revenue, applicant has illegally claimed and taken benefit of input tax credit. 5. It is submitted that input tax is defined in Section 2(62) and input tax credit in Section 2(63) of the Goods and Services Act. Allegation is that applicant has availed input tax credit on the basis of fictitious invoices, generated for the said purpose. In the aforesaid backdrop, it is ....

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....be prosecuted, inasmuch as, determination of the quantum of tax, avoided is sine qua non for inflicting punishment under Section 132(1)(l)(i) to (iv). It is submitted that since there is no determination of the evasion of tax and further Section 138 provides for compounding of offences, therefore, no sanction order could have been passed by the authority, who is not competent and further without determining the quantum of tax, benefit availed in violation of the provisions of the statute, no sanction can be granted. 10. Reliance is placed on the judgment of Madras High Court in Jayachandran Alloys (P.) Ltd. vs. Superintendent of GST & C. Ex., Salem, [(2019) 76 GST 329 (MAD)], where in, it is held that power to punish set out in Section 132 of the Act would stand triggered only once it is established that an assessee has committed an offence that has to necessarily be post determination of the demand due from an assessee, that itself has to necessarily follow the process of an assessment. Reliance is also placed on the judgment of Supreme Court in case of Radheshyam Kejriwal vs. State of West Bengal and Another; (2011) 3 SCC 581, where in, aspect of principles of double jeopardy, a....

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...., where in, it is held that special provision shall prevail over the provisions of Code of Criminal Procedure. The Scheme of the GST Act shows that separate chapters are given in the Act for determination of tax not paid or erroneously reduced or input tax credit wrongly availed and for offences and penalties. In view of the Scheme of the Act, Bombay High Court held that in the cases of present nature, both adjudication and prosecution, can be started simultaneously. 15. It is pointed out that the Supreme Court in case of Central Bureau of Investigation vs. Maninder Singh decided on 28.08.2015 in Criminal Appeal No. 1496 of 2009, it is held as under:- ".................10. The allegation against the respondent is 'forgery' for the purpose of cheating and use of forged documents as genuine in order to embezzle the public money. After facing such serious charges of forgery, the respondent wants the proceedings to be quashed on account of settlement with the bank. The development in means of communication, science & technology etc. have led to an enormous increase in economic crimes viz. phishing, ATM frauds etc. which are being committed by intelligent but devious individu....

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....se decisions can broadly be stated as follows :- (i) Adjudication proceeding and criminal prosecution can be launched simultaneously; (ii)Decision in adjudication proceeding is not necessary before initiating criminal prosecution; (iii)Adjudication proceeding and criminal proceeding are independent in nature to each other; (iv)The finding against the person facing prosecution in the adjudication proceeding is not binding on the proceeding for criminal prosecution; (v) Adjudication proceeding by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20(2) of the Constitution or Section 300 of the Code of Criminal Procedure; (vi)The finding in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceeding is on technical ground and not on merit, prosecution may continue; and (vii) In case of exoneration, however, on merits where allegation is found to be not sustainable at all and person held innocent, criminal prosecution on the same set of facts and circumstances can not be allowed to continue underlyi....