2022 (5) TMI 1655 - HC - GST

Seeking quashing of FIR - petitioners submits that since it is a private dispute between the parties and they have effected a compromise no useful purpose would be served to continue the proceedings against the petitioners in furtherance of the registration of the FIR - HELD THAT - Admittedly the petitioners and the complainant have entered into a compromise. However a perusal of the FIR would reveal that a complaint has been submitted before the GST authorities against the petitioners. The police proceedings would also reveal that M/s Jain Trading Company-complainant had submitted a complaint against M/s Suraj Rubber Industries regarding questioned bills/cheques returned to the Commissioner Central GST Commissionerate Jalandhar on 07.06.2019. As per the police proceedings the status report of this complaint had been obtained by M/s Jain Trading Company from the GST Department which has stated that M/s Suraj Rubber Indus tries of which the petitioners are the partners have failed to appear before the GST Department despite repeated reminders. Certain other allegations have been levelled against the petitioners firm regarding GST violations. In the present case the offence pertains not only to inter se dispute between the parties but there is an element of possible evasion of GST. As per the judgments passed in the cases of State of Madhya Pradesh 2019 (3) TMI 1935 - SUPREME COURT and Parbatbhai Aahir @ Parbatbhai Bhimsinhbhai Karmur and Ors. 2017 (10) TMI 1194 - SUPREME COURT the power to quash the FIR on the basis of compromise is not to be exercised for offences under the Special Statutes like the Prevention of Corruption Act etc. In the present case the investigation might reveal the commission of an offence under the GST Act. The present petition is dismissed.

Summary

Issues:
Petition for quashing FIR based on compromise involving Sections 406, 465, 467, 468, 471, and 120-B IPC; Whether FIR can be quashed due to compromise in a private dispute; Relevance of serious offences and special statutes in quashing FIR based on compromise; Impact of possible GST evasion on quashing FIR based on compromise.

Analysis:
The judgment involves a petition under Section 482 Cr.P.C for quashing an FIR registered against the petitioners under various sections of the IPC based on a compromise between the parties. The petitioners argued that since it was a private dispute and a compromise had been reached, continuing the proceedings would serve no purpose. However, the State contended that serious offences had been committed, including cheating the complainant, and there were allegations of GST violations against the petitioners. The court noted that while a compromise had been reached, the FIR also involved complaints to the GST authorities about the petitioners' alleged violations.

The court referred to various judgments, including the Supreme Court's decisions in 'State of Madhya Pradesh vs. Laxmi Narayan' and 'Parbatbhai Aahir vs. State of Gujarat', which outlined principles for quashing criminal proceedings based on compromise. These judgments highlighted that offences under special statutes or those impacting society cannot be quashed solely on the basis of a compromise. The court emphasized that offences involving financial and economic well-being of the State fall under this category.

In this case, the court found that the FIR involved not only a private dispute but also potential GST evasion. Citing the principles from the mentioned judgments, the court concluded that the power to quash FIR based on compromise does not extend to offences under special statutes like the GST Act. The court highlighted that if the investigation reveals no offence under the GST Act, the petitioners could approach the court again for quashing the FIR based on compromise. Ultimately, the court dismissed the present petition but left the option open for future consideration based on the investigation's outcome.