TaxTMI 
TaxTMI 
2026 (6) TMI 995
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....arding delayed/non-deposit of GST/TDS amount deducted from payments made in relation to execution of Gram Sabha development works. Pursuant to a complaint made before the Lokayukta, an enquiry was conducted and an enquiry report came to be submitted, on the basis whereof directions were issued by the district authorities for lodging of FIR against the applicant along with other co-accused persons. Consequently, FIR dated 19.10.2024 came to be registered as Case Crime No.215 of 2024 under Section 316(5) of the Bharatiya Nyaya Sanhita, Police Station Nagar, District Basti. Thereafter, upon completion of investigation, the Investigating Officer submitted charge sheet dated 01.09.2025 against the applicant and co-accused persons under Section 316(5) B.N.S., pursuant whereof the learned Chief Judicial Magistrate, Basti took cognizance and passed impugned summoning order dated 02.04.2026 in Case No.1325 of 2026 (State vs. Nisar Ahmad & others). 4. Learned counsel for the applicant further submits that the allegation emerging from the enquiry report and FIR is confined only to the extent that an amount of Rs. 8,629/- relating to GST/TDS deduction on material purchased for certain Gram ....
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....ed GST/TDS amount within the prescribed time and therefore criminal liability cannot be ruled out at this stage. However, the detailed submissions advanced on behalf of the applicant that the allegations in the present case are wholly governed by the provisions of the U.P.Goods and Services Tax Act, 2017, which is a Special Statute providing a complete mechanism for adjudication, penalty and prosecution, and that invocation of general penal provisions under Section 316(5) B.N.S. without resorting to the statutory procedure prescribed under the GST Act could not be disputed by the learned A.G.A. during the course of arguments. 8. Since legal issue has been raised for challenging veracity of the implication of the applicant into unwarranted criminal litigation and as such process for inviting counter and rejoinder affidavit is hereby dispensed with. 9. After hearing the rival submissions advanced by learned counsel for the parties and upon perusal of the material brought on record, the following issues arise for consideration before this Court:- Whether the State Authorities can legally initiate criminal prosecution by invoking the penal provisions of IPC/B.N.S. withou....
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....Council, (hereafter in this section referred to as "the deductor"), to deduct tax at the rate of one per cent. from the payment made or credited to the supplier (hereafter in this section referred to as "the deductee") of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees: Provided that no deduction shall be made if the location of the supplier and the place of supply is in a State or Union territory which is different from the State or as the case may be, Union territory of registration of the recipient. Explanation.- For the purpose of deduction of tax specified above, the value of supply shall be taken as the amount excluding the central tax, State tax, Union territory tax, integrated tax and cess indicated in the invoice. (2) The amount deducted as tax under this section shall be paid to the Government by the deductor within ten days after the end of the month in which such deduction is made, in such manner as may be prescribed. (3) A certificate of tax deduction at source shall be issued in such form and in such manner as may be prescribed.]. (4) 2[**....
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....on or mistake in documentation shall be considered to be easily rectifiable if the same is an error apparent on the face of record. Section 138. Compounding of offences.- (1) Any offence under this Act may, either before or after the institution of prosecution, be compounded by the Commissioner on payment, by the person accused of the offence, to the Central Government or the State Government, as the case be, of such compounding amount in such (2) The amount for compounding of offences under this section shall be such as may be prescribed, subject to the minimum amount not being less than ^5[twenty-five per cent. of the tax involved and the maximum amount not being more than one hundred per cent. of the tax involved]. (3) On payment of such compounding amount as may be determined by the Commissioner, no further proceedings shall be initiated under this Act against the accused person in respect of the same offence and any criminal proceedings, if already initiated in respect of the said offence, shall stand abated." 13. A careful and conjoint reading of Sections 50, 51, 122, 125, 126 and 138 of the U.P.Goods and Services Tax Act, 2017 clearly r....
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....of Gram Sabha works. Significantly, neither the FIR nor the charge sheet contains any allegation with regard to embezzlement of Government funds, dishonest misappropriation, siphoning of money for personal use, fabrication or manipulation of records, fake transactions, forged documents, dishonest withdrawal or wrongful gain attributable to the applicant. Rather, the material brought on record indicates that the amount allegedly not deposited was subsequently deposited in the Government account. Thus, the allegations levelled against the applicant squarely fall within the statutory framework of the U.P.Goods and Services Tax Act, 2017 and not within the ambit of general penal provisions under Section 316(5) B.N.S. Consequently, initiation of criminal prosecution under the general penal law, without resorting to the statutory mechanism prescribed under the GST Act, appears legally unsustainable. 16. The Hon'ble Supreme Court in Sharat Babu Digumarti (supra), has recognized the settled principle that where a Special Statute creates a complete mechanism dealing with offences, penalties and prosecution, resort to the general penal law is not permissible in absence of independent ....