TaxTMI 
TaxTMI 
2025 (11) TMI 1262
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....Taxation officer dated 13.02.2000. The allegations contained in the above mentioned complaint were as under:- "their office has received a communication that huge outward supply has been made by 'M/s Bhagwati Traders', Khanpur turn, Gohana, Sonipat (06AILPV7596K12Z4) to Mandi Govindgarh. Punjab. That preliminary inquiry was conducted by the said office and it was observed that this firm is non-existent and non-functional and for name sake only a sign board has been installed in front of premises located at Khanpur turn, Gohana, Sonipat. That from the volume of transactions made by the tax payer, it seems that only paper transaction has been made and this tax payer has made the following purchases from the State/UT of Haryana, Punjab, Chandigarh, Uttrakhand, Delhi, and made subsequent sale of Rs. 14,85,07,183/-to the State of Punjab as mentioned in the letter received from Punjab Authorities. The details of the transaction were given in the complaint itself, which were as under:- Firm name M/s GSTN Place State Taxable amount IGST CGST SGST GKM Enterprises 04BLHPA2654R1ZX UT Chandigarh Chandigarh 229229144 41261246 0 0 ....
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.... Since the petitioner has been arrayed as an accused in the above mentioned FIR he filed the present petition alleging:- a) that the petitioner is registered under the Haryana Goods and Services Tax Act, 2017/ Central GST Act, since 23.02.2018, vide GSTIN 06AILPV7598K1Z4 to carry the business of trading in Iron Scrap (waste pieces or disused articles of wrought iron suitable for reworking). b) that in normal course of its business, the Petitioner purchases Iron Scrap from various states including Delhi, Haryana, Dehradun and sells the same to the traders at Mandi Gobindgarh, Punjab. The goods are transported through trucks. The Petitioner is in possession of all the requisite documents in respect of purchases as prescribed under the Act. c) that the purchases made by the Petitioner are reflected in Form of GSTR-2A which is available on the GST portal. In respect of sales made by the Petitioner, the Petitioner is in possession of proper invoices and E-way bills. That the details of Sales made are uploaded on the GST website in form of monthly returns filed in GSTR-3B. As per petitioner, he was actively conducting its business in the relevant Financial Year....
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....st the Petitioner alleging that the Petitioner is non-existent, non functional and has merely Installed a board in front of the premises and is not carrying out any business from its registered premises. That as per the FIR, the memo to register FIR is dated 13.02.2019. Thus, there is an unexplained delay of over 1 year and 8 months in registering the FIR. j) that in the FIR, it has been alleged that the Petitioner is a nonexistent, non-functional entity and for name sake only a sign board has been installed in front of the premises of the petitioner located at Khanpur Mode, Gohana, Sonipat. It is alleged that the petitioner seems to be making only paper transactions. k) that the petitioner was first time apprised of the abovementioned FIR No. 0475 of 2020 when police officials visited the residential premises, i.e. H. No.19, Bhatia Colony, Near Ganesh Mandir, Panipat-132103 (Haryana) of the petitioner and made enquiries about the said FIR. l) that the petitioner received summons under Section 41-A of the Criminal Procedure Code to appear before Assistant Sub-Inspector on 05.09.2022 in regard to the present FIR. m) that the Central Board of Indir....
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....n question has been lodged with mala fide intentions just for harass the petitioner, and that instead of taking action as per provisions of GST Act, which a complete Code in itself, the FIR under Sections 420, 467m 468 and 471 of IPC has been lodged. While referring to the principles of law laid down by the Hon'ble Supreme Court of India in the case of State of Haryana Vs. Bhajan Lal, 1992 SCC (Cri) 426, the learned counsel for the petitioner has sought for quashing of present FIR. 9. In addition to above, the learned counsel for the petitioner has also argued that the term "Complete Code" has been discussed by the Hon'ble Supreme Court in the case of Girnar Traders (3) Vs. State of Maharashtra (2011), 3 SCC 1 wherein it has been observed that "Complete" further adds a degree of certainty to the code. It has to be a compilation of provisions which would comprehensively deal with various aspects of the purpose sought legislations is either absent or at best is minimal. The provisions of the enactment in question should provide for a complete machinery to deal with various problems that may arise during its execution. Sufficient powers should be vested in the authority/forum creat....
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....e/bill without supply of goods, and therefore, instead of filing the FIR, the above mentioned procedure should have been followed by the Excise and Taxation Authority. In support of above mentioned arguments the learned counsel for the petitioner has referred to the principles of law laid down by the Hon'ble Supreme Court of India in the case of Jeewan Kumar Raut Vs. CBI, (2009), 7 SCC 526, wherein it has been held that 'where a statute empowers an authority to investigate a matter, cognizance of such offence must not be taken under the Criminal Procedure Code'. 13. The learned counsel for the petitioner has also referred to the principles of law laid down by this Court in the case of Ajay Kumar Sandhu Vs. State of Haryana, 2015 SCC Online P&H 16972, wherein it has been held that "the Finance Act 1994", being a Special and Complete Code prevails over general provisions of IPC, and accordingly, for alleged non-payment of service tax, department cannot file an FIR under the provisions of IPC. While referring to the principles of law laid down by the Hon'ble Supreme Court of India in the case of Union of India Vs. Ashok Kumar Sharma and other, 2020 SCC Online SC 683, the learned co....
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....titioner is nothing but an abuse of process of law, the above mentioned FIR should be quashed. 17. Per contra, it has been argued by learned State counsel that the present case is not a case wherein at its own level the FIR has been lodged by the police. According to learned State counsel, in fact, in the present case, it was the Tax Authority, i.e. the Excise and Taxation Officer, who approached the police and requested for filing of FIR in view of the fraudulent acts committed by the petitioner. While defending the action taken by the Police authority it has been argued by learned State counsel that once the complaint has been moved by tax authority, the filing of FIR for a cognizable offence by the police is in accordance with law, and there is no such bar that in such a case the FIR cannot be lodged. 18. The learned State counsel while referring to the contents of complaint has argued that it was reported by the tax authority that the petitioner was running a non-existent firm just for the purpose of creating document to avail the facility of 'Input Tax Credit', and that, in fact, no business was being run by the petitioner. According to learned State counsel for drawing ....
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....or service or both in violation of the provisions of this Act, or the rules made thereunder leading to wrongful availment or utilisation of 'Input Tax Credit' or refund of tax is an offence. Sections 132(1)(i) further provides that whosoever commits, or causes to commit and retain the benefit arising out of above mentioned offence shall be punished with imprisonment for a term which may extend to 5 years and with fine, if the tax evaded or the amount of 'Input Tax Credit' wrongly availed or utilized or the amount of refund wrongly taken, exceeds Rs.5,00,00,000/-. It is also relevant to mention here that Section 132(5) provides that the offence defined under Section 132(1)(b) and punishable under Sections 32(1)(i) shall be cognizable and non-bailable. 24. In the light to above mentioned special statute now it has to be determined as to whether in view of allegations levelled by the complainant against petitioner-accused, the offence under Section 132(1)(b) is made out against the petitioner or the offence under Section 420, 467, 468 and 471 IPC. 25. With regard to above, the thin line which can be a defining factor is the manner in which the GST number was obtained by th....
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....r, but also the charge has been framed against the petitioner. The case is now fixed for prosecution evidence before the learned trial Court. There is nothing on record to show that at the time of framing of charge the petitioner raised any objections commensurate to the grounds taken in the present petition, and thus, the order with regard to framing of charge, which has not been challenged, has become final. 29. As far as the quashing of FIR is concerned the scope for quashing of FIR is limited as in the quashing petition this court does not have the advantage of looking into the evidence collected by the Investigating Agency. 30. In this regard the Hon'ble Supreme Court of India in the case of Neeharika Infrastructure Pvt. Ltd. Vs. State of Maharashtra and others, rendered in Criminal Appeal No. 330 of 2021, has prescribed the guidelines wherein the FIR can be quashed. Those guidelines are as under: "i) Police has the statutory right and duty under the relevant provisions of the Code of Criminal Procedure contained in Chapter XIV of the Code to investigate into a cognizable offence; ii) Courts would not thwart any investigation into the cognizable offence....
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....to be more cautious. It casts an onerous and more diligent duty on the court; xiv) However, at the same time, the court, if it thinks fit, regard being had to the parameters of quashing and the self-restraint imposed by law, more particularly the parameters laid down by this Court in the cases of R.P. Kapur (supra) and Bhajan Lal (supra), has the jurisdiction to quash the FIR/complaint; xv) When a prayer for quashing the FIR is made by the alleged accused and the court when it exercises the power under Section 482 Cr.P.C., only has to consider whether the allegations in the FIR disclose commission of a cognizable offence or not. The court is not required to consider on merits whether or not the merits of the allegations make out a cognizable offence and the court has to permit the investigating agency/police to investigate the allegations in the FIR; xvi) The aforesaid parameters would be applicable and/or the aforesaid aspects are required to be considered by the High Court while passing an interim order in a quashing petition in exercise of powers under Section 482 Cr.P.C. and/or under Article 226 of the Constitution of India. However, an interim order ....