GST Officer can only make a complaint u/s 190(1) of the Cr.P.C. not submit final report u/s 173 CrPC as he is not a police officer: HC

Chhattisgarh HC: An officer of the Central Tax authorized under Section 69(1) of the GST Act can only make a complaint under Section 190(1) of the Cr.P.C. not submit final report u/s 173 CrPC as he is not a police officer

Devyani | Nov 9, 2021 |

GST Officer can only make a complaint u/s 190(1) of the Cr.P.C. not submit final report u/s 173 CrPC as he is not a police officer: HC

GST Officer can only make a complaint u/s 190(1) of the Cr.P.C. not submit final report u/s 173 CrPC as he is not a police officer: HC

Chhattisgarh HC: An officer of the Central Tax authorized under Section 69(1) of the GST Act can only make a complaint under Section 190(1) of the Cr.P.C. not submit final report u/s 173 CrPC as he is not a police officer

Paritosh Kumar Singh & Ors. Vs. State of Chhattisgarh & Anr. (Chhattisgarh High Court); WPCR No. 469/2021; 01.10.2021

Petitioners have filed this petition challenging the legality and propriety of the order rejecting the application filed by the petitioner under Section 167 Cr.P.C. for grant of default bail.

Facts:

  • The issue required to be inquired is availment and transmission of Input Tax Credit (ITC) on the basis of mere paper transactions / fictitious supply transactions involving GST to the tune of Rs. 258 Crores indicating total fictitious business in terms of taxable value to the tune of Rs. 1400 Crores.
  • The petitioners, by way of, creation of several fictitious and physically nonexistent trading company firms in Chhattisgarh, Jharkhand, Madhya Pradesh, West Bengal, Maharashtra and registered them in GSTN portal online, using identity credential of several persons using forged PAN and had issued fake bills to transmit fake ITC to several other traders.
  • The petitioners, for the purpose of such fictitious trading had fraudulently shown in their GST returns to have procured several kinds of goods from within and across the State.
  • The Directorate General of Goods and Service Tax Intelligence, Raipur Zonal Unit, Raipur had cracked this racket on the basis of intelligence against a taxpayer named M/s Manoj Enterprises who during the month of July-2020 and August-2020 claimed Rs. 44.72 crores from ITC by way of trading activities even when their statutory returns did not indicate the purchase of any such goods for trade.
  • On the basis of the information gathered, petitioners No. 1 and 2 were arrested on 25.01.2021 from Raipur and produced before the learned Chief Judicial Magistrate, Raipur on the same day and petitioners No. 3 and 4 were also arrested on 25.01.2021 from Siwan, Bihar and produced before the Chief Judicial Magistrate, Siwan.
  • Learned Chief Judicial Magistrate, Siwan granted transit remand upto Raipur and accordingly produced before the learned Chief Judicial Magistrate, Raipur on 28.01.2021.
  • The petitioners have been arrested for alleged violation of Central Goods and Service Tax Act, 2017 (for short ‘the Act of 2017’) for offence committed under Sections 132(1)(b) and (c) of the Act of 2017 and produced before the Judicial Magistrate, from where they were sent to judicial custody.
  • The petitioners have been arrested and produced before the Magistrate concerned on 25.01.2021 from where they have been remanded in judicial custody and as per Section 132 (1)(b) and (c) of the Act of 2017 maximum punishment is 5 years with fine.
  • As per Section 167(2) Cr.P.C. respondent authorities are bound to file charge-sheet within 60 days and in this case charge-sheet has not been filed but a complaint has been filed on 25.03.2021. Complaint has been filed by the Senior Intelligence Officer without there being any name of natural person, therefore, the complaint is not maintainable.

Petitioners’ Contention:

  • Respondents have collected remand order sheets which show that investigation has not been completed, therefore, they seek further time to file charge-sheet, therefore, the petitioners have been taken into judicial custody.
  • Thereafter, one Bharat Bhushan Sahu who claims himself to be Senior Intelligence Officer in the Office of GST, Raipur filed application on 25.01.2021 and sought judicial custody for 14 days which was accepted and extended by the Court.
  • As per the provisions of Cr.P.C. it is responsibility of the respondent authority to submit charge sheet within 60 days, however, in the present case, no charge-sheet has been filed, therefore, the petitioners are entitled to be released on bail but the same has been denied by the Chief Judicial Magistrate, Raipur vide order dated 12.05.2021 against which revision was preferred which was also dismissed vide impugned order dated 26.06.2021.
  • Thereafter, the present writ petition (criminal) has been filed.
  • Respondent authorities cannot discharge their responsibility by filing complaint in place of charge-sheet, therefore, the procedure followed by the respondent authority, void ab initio, deserves to be quashed and deserves to be interfered by this Court.

Respondents’ Contention:

  • From the facts mentioned, it is crystal clear that petitioners have committed offence under Section 132(1)(b) and 132(1)(c) of the Act of 2017 and liable to be punished under Section 132(1)(i) read with Sub-section (5) of Section 132 of the Act of 2017.
  • Section 173 of the Cr.P.C. specifically provided in respect of report of police officer on completion of investigation. Since, complainant is not a police officer, therefore, a complaint has been filed on 25.03.2021 within 60 days of the arrest of the petitioners under Section 200 of the Cr.P.C. as Section 173 of Cr.P.C. is not applicable in the instant case. The learned Magistrate is due empowered to take cognizance under 7 Clause (a) of Section 190 of Cr.P.C.

Observations and findings:

  • As per the provisions of Section 167(2) of Cr.P.C., default bail is right of an accused. The object of the provisions of Section 167(2) of Cr.P.C. is that State authority should not take any malafide belated action against accused persons.
  • Right of the accused is an integral part of personal liberty, as per the provisions and is an indefeasible link to safeguard under Article 21 of the Constitution of India.
  • The Hon’ble Bench relied on the recent judgment of the Hon’ble Apex Court in M. Ravindran vs Intelligence Officer, Directorate of Revenue Intelligence; (2021) 2 SCC 485, held that it is abundantly clear that default bail is indefensible right of the petitioner. The same cannot be violated by prosecution.
  • On above legal provisions of law and facts projected by the petitioners, the bench opined that the case has to be examined by this Court whether the petitioners are entitled to get default bail as provided in Section 167(2) of the Cr.P.C. on count of non filing of final report within 60 days or not.
  • For examining this aspect of the matter the relevant provisions the Act of 2017 have to be seen. Section 69 of the Act deals with the power of authority to arrest a person if he is involved in the violation of GST Act and Section 132 of the Act deals with conditions on which a person can be arrested for violation of the Act. Section 70 of the Act of 2017 deals with the power to summon persons to give evidence and produce documents.
  • From bare perusal of the provisions of Sections 69 and 70 of the Act, it is crystal clear that prosecution can be launched by way of private complaint with the previous sanction of Commissioner, no criminal proceeding can be taken to commence, the persons who are summoned under Section 70(1) and persons whose arrest is authorized under Section 69(1) of the Act are not be treated as persons accused of any offence until a prosecution is launched and that an officer of the Central Tax authorized under Section 69(1) of the Act to arrest a person is not a police officer.
  • The officers under the GST Act are not a police officer, as such, he cannot and he does not seek custody of the arrested persons for completing the investigation / inquiry. Section 69(2) oblige the officer authorized to arrest the person to produce before a Magistrate within 24 hours.
  • Immediately upon production the Magistrate may remand him to judicial custody or admit the arrested person to bail in accordance with procedure prescribed under Cr.P.C. Thus, from above discussion, it is quite clear that the GST officers are not the police officers, therefore, they are not required to submit final report as envisaged in Section 173 of Cr.P.C.
  • The Court considered the law laid down by the Hon’ble Supreme Court in the cases of Directorate of Enforcement vs Deepak Mahajan & Anr; AIR 1994 SC 1775, Badaku Joti Savant vs State of Mysore; AIR 1966 SC 1746 , P.V. Ramana Reddy vs Union of India and Others in Special Leave to Appeal (Cr.) 4430/2019 ,and held that it is quite clear that the authorized officer can only make complaint under Section 190(1) of the Cr.P.C. not submit final report as he is not a police officer.

Held:

In view of the aforesaid legal position, contention of the petitioner for grant of default bail under Section 167(2) for non-furnishing of final report is rejected. Further, it is quite clear that complaint has been filed within 60 days of their arrest which is within the time prescribed for filing of complaint to entitle or disentitle the accused persons for default bail. As the complaint has been filed within 60 days, therefore, the writ petition (criminal) is liable to be dismissed.

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