COGNIZANCE OF OFFENCES

[Dr. Sanjiv Agarwal]

The provisions relating the prosecution for offences are already covered under section 89 of the Finance Act, 1994. Finance Act, 2013 has prescribed the revised punishments for offences in section 89.

Finance Act, 2013 has also inserted new provisions to make certain offences cognizable and certain others as non-cognizable and bailable. Accordingly, following new provisions have been inserted w.e.f. 10.05.2013 –

Section 90                 Cognizance of offences

Section 91                 Power to arrest

Cognizance of offences (Section 90)

Section 90 w.e.f. 10.05.2013 reads as under –

"90(1) An offence under clause (ii) of sub-section (1) of section 89 shall be cognizable.

(2) Notwithstanding anything contained in the code of Criminal Procedure, 1973, all offences, except the offences specified in sub-section (1), shall be non-cognizable and bailable."

Section 90 seeks to provide that an offence under section 89(1)(ii) shall be cognizable and all other offences shall be non-cognizable and bailable. Thus, section 90 specifies and differentiates cognizable offences from non- cognizable and bailable offence. The provisions contained in this section shall prevail over the provisions of the Code of Criminal Procedure, 1973.

In summary, following are cognizable and non-cognizable offences - 

Offences under section – 89

a)    Knowingly evades payment of Service Tax

b)    Wrongly avails / utilizes credit of taxes

c)    Maintains false books of accounts/ supplies false information

d)    Collects tax but fails to pay within 6 months of due date -

Punishments under section – 89

—  For (a), (b) &(c) and  amount > Rs. 50 lakhs –  imprisonment from 6 months to 3 years

—  For (d), if amount > Rs. 50 lakh - imprisonment from 6 months to 7 years

—  For any other offence– imprisonment upto 1 year

—  For second or subsequent conviction

• For (a), (b), (c), other offences – imprisonment upto 3 years
• For (d) – imprisonment upto 7 years

Cognizance of Offences (Section 90)

—  Cognizable offence

Failure to deposit to the credit of Central Government service tax collected where amount exceeds Rs. 50 lakhs

—  Non-cognizable and bailable offences

            All offences except cognizable offence as above

—  Detailed instructions to be issued

The offences from 'bail' point of view can be categorized into two types – bailable and non-bailable. While in a bailable offence, granting of bail is done in normal course whereas in case of non-bailable offence, an arrest can be effected, even for the purpose of investigation implying that offenders detention is discretionary. Bail is basically a concept used to ensure offender's appearance to answer the charges made. The criminal offences where detention of the accused is deemed necessary to ensure his or her appearance for investigation and trial are termed as 'non bailable'. The offences where detention may not be warranted are bailable offences.