TMI Blog2021 (1) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... s not deposited under protest. In Section 135 of the Act, it is provided that the presumption of culpable mental state is available against such persons. In Section 136 of the Act, it is made clear that the statement recorded under section 70 of the Act can be used in proceeding like prosecution as whey would be relevant. Thus, apparently, there is material to make out prima-facie case of fraud against the Petitioners. The provision of Section 138 of the Act shows that compounding of the offence is possible either before or after institution of prosecution. There are some provisos, which show that in some circumstances the compounding may not be possible. The proviso to Section 138(1) of the Act shows that such compounding shall not affect the proceeding, if any, instituted under any other law and the compounding can be done only after making payment of tax, interest and penalty involved in such offences - In view of the scheme of the Act, this Court has no hesitation to hold that in the cases of present nature, both adjudication and prosecution can be started simultaneously. Further, the aforesaid special provisions shall prevail over the provisions of the Code of Criminal Proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itution of India, for issuance of a Writ of Mandamus and/or Writ of Quo Warranto, thereby quashing the illegal proceedings against the Petitioner: AND/OR b. pending hearing and final disposal of the present Criminal Writ Petition, the alleged illegal proceedings which are initiated against the Petitioner by the Respondents may kindly be stayed; AND/OR c. Ad-Interim and Interim stay pending the final disposal of this Petition, the Respondents may be restrained from taking any coercive steps of interfering with the liberty of the Petitioner in any manner; AND/OR. 2. Heard both the sides. 3. The Petitioners are directors of M/s. Ganraj Ispat Private Limited company and the company is registered under the provisions of the Central Goods and Services Tax Act, 2017 (GST Laws) (hereinafter referred as the Act ). It has registered office at Supa, District Nagar, Maharashtra. One Tushar Munot, sole proprietor of M/s. Rutu Enterprises was arrested by the Respondents, officers of GST intelligence in the month of October 2020. In the month of November 2020, search of the premises of the company of Petitioners was conducted and some documents came to be seized. It is the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Petitioner agreed to reverse the inadmissible ITC availed by them on the invoices issued by M/s. Rutu Enterprises and then the amount of ₹ 84,00,046/- was deposited voluntarily by filling Form DRC-03 under the Act. It is contended that on 7th December, 2020, another director Kirtiraj Dugad of M/s. Ganraj Ispat Private Limited requested to keep investigation in abeyance by submitting that their consultant was tested Covid-19 positive. It is contended that all cooperation was given by the department to the Petitioners and when even summons was not issued, they rushed to the Court to prevent the officers from exercising their powers. Thus, it is the contentions of the department that there is admission on the part of the Petitioners that fake transactions were shown for aforesaid purpose and inadmissible ITC was availed in respect of fake transactions. 6. The Respondents have denied that all the provisions of the Code of Criminal Procedure like Sections 154, 157 and 173 need to be applied for investigation and taking cognizance of the offence and it is contended that such contentions are out of misconception of law. 7. The learned counsel for Petitioners placed reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vitiated. It is also contended by Kothari that such investigation will be against the provisions of Articles 14 and 21 of the Constitution of India and as there is nothing in the Act as provided in Section 4(2) of the Code of Criminal Procedure, the procedure given in Chapter XII of the Code of Criminal Procedure must be followed by the Respondents. He submitted that in view of such contentions and interim relief granted by the Apex Court to Mukesh Kothari in Writ Petition (CRL.) No. 118 of 2019 that no coercive steps shall be taken against the Petitioner, such interim relief needs to be granted to the present Petitioners also. 9. The aforesaid common order made by the Apex Court in Special Leave to Appeal (Criminal) Nos.4322-4324 of 2019 shows that the direction is given to place the matter before the Bench of Three Judges. But the fact remains that the Apex Court had refused to interfere in the order made by Telangana High Court in similar matter. 10. Some orders made by this Court at Principal Seat are also produced and some orders made by other High Courts are also produced by the learned counsel for Petitioners. He made some submissions on the basis of observations made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there was no interference in the order of Telangana High Court form Apex Court. 12. As against the aforesaid submissions made by the learned counsel for Petitioners, the learned counsel for Respondent department made submissions of the nature mentioned in the reply and he placed reliance on some observations made by the Telangana High Court in Writ Petition No. 4764 of 2019, (P.V Ramana Reddy v. Union of India ors.) decided with other proceedings. He submitted that the Telangana High Court has held that the special provisions given in the special Act need to be followed as it is special legislation and it is protected by Section 4(2) of the Code of Criminal Procedure. He placed reliance on observations made by the Gujarat High Court in R/Special Civil Application No. 13679 of 2019, (Vimal Yashwantgiri Goswami v. State of Gujarat) decided with other matters, to support his contentions. In these matters, the relevant provisions of the Code of Criminal Procedure are discussed by the High Courts and the provisions of the Act are considered as special enactment. The Gujarat High Court has referred the provisions of Sections 69, 132, 135, 61, 66, 73 and 74 also of the Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be considered in prosecution. 14. The facts and circumstances of each an every case are always different. In the present matters, there are allegations against the Petitioners and Munot that they created record of false invoices for input tax credit and by deceiving the authority they have committed the fraud of amount of more than ₹ 84,00,000/-. There are statements given under section 70 of the Act showing admissions given by concerned like one director of Petitioner's company and one Munot. It is the case of the department that after seizure of record, the company of he Petitioners voluntarily deposited the aforesaid amount and it was not deposited under protest. In Section 135 of the Act, it is provided that the presumption of culpable mental state is available against such persons. In Section 136 of the Act, it is made clear that the statement recorded under section 70 of the Act can be used in proceeding like prosecution as whey would be relevant. Thus, apparently, there is material to make out prima-facie case of fraud against the Petitioners. 15. In Section 67 of the Act, power of proper officer of making inspection of search and seizure is given. This p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 69 of the Act we need to consider as it gives procedure which needs to be followed when arrested accused is not released on bail by officer mentioned in this section. Thus, the Magistrate comes into picture after production of accused before him and then the Magistrate will have to follow procedure given for remand purpose in the Code of Criminal Procedure. 18. The provision of Section 69 (3)(b) of the Act shows that when bailable offence is committed, the Deputy Commissioner or the Assistant Commissioner needs to exercise the power, which is given to the officer in-charge of the police station in the Code of Criminal Procedure (underline added). The provision of Section 69 of the Act shows that subjective satisfaction of Commissioner is sufficient for effecting arrest of a person, who has committed the offence under section 132 of the Act. In Section 132 of the Act, different kinds of offences are mentioned. Section 132 (1) (b) and (c) is as under: 132. Punishment for certain offences.-(1) Whoever commits any of the following offences, namely:- (a)... (b) issues any invoice or bill without supply of goods or services or both in violation of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any, instituted under any other law and the compounding can be done only after making payment of tax, interest and penalty involved in such offences. 21. The aforesaid specific provisions and scheme of the Act show that separate Chapters are given in the Act for determination of tax not paid or erroneously refunded or input tax credit wrongly availed and for offences and penalties. In view of the scheme of the Act, this Court has no hesitation to hold that in the cases of present nature, both adjudication and prosecution can be started simultaneously. Further, the aforesaid special provisions shall prevail over the provisions of the Code of Criminal Procedure and it cannot be said that all the provisions of the Code of Criminal Procedure like Sections 154 and 173 of he Code of Criminal Procedure need to be followed for prosecution under the Act. This Court is limiting the scope of discussion only to the extent of the offences committed under the Act and the observations are made only from that angle. If offences under the Indian Penal Code also are committed then different and more serious view can be taken. It needs to be kept in mind that the allegations make out the case of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2 until 11-1-2021. Thus, the Respondent department was virtually prevented from exercising its powers even like issuing summons. By such order, the Petitioners indirectly got relief of anticipatory bail, which is also not ordinarily permissible in proceeding of present nature. White collar offences are more serious than offences like murder, dacoity etc. Such offences are committed after hatching conspiracy. This circumstance needs to be kept in mind by Court as the granting of relief of anticipatory bail hampers investigation and such approach causes damage to the image of judiciary. 23. The circumstances shows that even when the matter could have been filed before the regular Court as search and seizure took place in November 2020, the matter came to be filed before the Vacation Court. This circumstance also cannot be ignored. Attempt is made to give explanation that the consultant of the company was infected due to Covid-19 virus. Such submission ordinarily cannot be accepted by the Court. On 11th January, 2021, there was insistence to grant interim relief and adjournment was sought. The interim relief was vacated by this Court by order dated 11th January, 2021. On 14th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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