TaxTMI 
TaxTMI 
2026 (8) TMI 1492
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...., certain allegations were levelled regarding 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 applicants 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 applicants 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 applicants 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 deducti....
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....d 22.5.2026 passed by this Court, entire proceedings have already been quashed with liberty to the authorities to proceed in pursuance to UPGST Act, 2017, hence applicants also seeks parity with the said order. 7. Per contra, learned A.G.A. submits that the impugned charge sheet has been submitted after due investigation and sufficient material has been collected during investigation to proceed against the applicants. It is contended that the applicants admittedly failed to deposit the deducted 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 applicants 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 ....
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.... Government on the recommendations of the Council: ....... Section 51- Tax deduction at source.- (1) Notwithstanding anything to the contrary contained in this Act, the Government may mandate,- (a) a department or establishment of the Central Government or State Government; or (b) local authority; or (c) Governmental agencies; or (d) such persons or category of persons as may be notified by the Government on the recommendations of the 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 ....
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....lated to penalty - No officer under this Act shall impose any penalty for minor breaches of tax regulations or procedural requirements and in particular, any omission or mistake in documentation which is easily rectifiable and made without fraudulent intent or gross negligence. Explanation-For the purpose of this sub-section,- (a) a breach shall be considered a 'minor breach' if the amount of tax involved is less than five thousand rupees; (b) an omission 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....
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....ustified only where the allegations independently disclose essential ingredients of distinct criminal offences such as dishonest misappropriation, forgery, fabrication of records, cheating or wrongful gain. 15. Upon a careful perusal of the records, the FIR and the impugned charge sheet, this Court finds that even if the entire prosecution case is accepted in its entirety, the allegation against the applicants is confined only to delayed/non-deposit of GST/TDS amount deducted during execution 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 applicants. 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 applicants 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 un....