Tejas Pravin Dugad vs Union Of India, Through The ...
2021 Latest Caselaw 967 Bom

                                     1                     Cri.W.P.1715.20 and others.odt


          IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                     BENCH AT AURANGABAD.

              CRIMINAL WRIT PETITION NO.1715 OF 2020



Mr. Tejas Pravin Dugad,
Aged: 29 years, Occupation: Business,
Indian Inhabitant,
Resident at: 27, Vasant Baug Society,
Bibwewadi, Pune 411037.                            ... PETITIONER


       VERSUS


1.     Union of India, through the Ministry of
       Finance, Department of Revenue, Room
       No. 46, North Block, New Delhi - 110 001.

2.     Directorate General of GST Intelligence
       (DGGI)
       1st & 2nd Floor, Wing Number 06,
       West Block, 08 RK Puram,
       New Delhi 110066.

3.     Chief Commissioner of CGST, Nagpur
       Nashik Commissionerate,
       Ahmednagar Division,
       Post Box No.81, GST Bhavan,
       Civil Lines, Telengkhedi Road,
       Nagpur 440001.

4.     State of Maharashtra, through the
       Director General of Police,
       Chhatrapati Shivaji Maharaj
       Marg, Colaba, Mumbai 400001.                ... RESPONDENTS


                                  ...
Mr. Makrand D. Adkar, Senior Counsel, with Mr. P. B. Shirsath, with
Mr. Aashit A. Kankariya, with Mr. Shantanu M. Adkar, with Mr. Harsh
Agrawal, with Mr. Sanket S. Bora, Advocate for Petitioner.




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Mr. A. G. Talhar, Advocate for Respondent Nos.1 to 3.
Mr. A. V. Deshmukh, APP for Respondent No.4.
                                ...

                                 AND
              CRIMINAL WRIT PETITION NO.1716 OF 2020



Mr. Gaurav Pramod Dugad,
Aged: 31 years, Occupation: Business,
Indian Inhabitant,
Resident at: 28, Vasant Baug Society,
Bibwewadi, Pune 411037.                            ... PETITIONER


       VERSUS


1.     Union of India, through the Ministry of
       Finance, Department of Revenue, Room
       No. 46, North Block, New Delhi - 110 001.

2.     Directorate General of GST Intelligence
       (DGGI)
       1st & 2nd Floor, Wing Number 06,
       West Block, 08 RK Puram,
       New Delhi 110066.

3.     Chief Commissioner of CGST, Nagpur
       Nashik Commissionerate,
       Ahmednagar Division,
       Post Box No.81, GST Bhavan,
       Civil Lines, Telengkhedi Road,
       Nagpur 440001.

4.     State of Maharashtra, through the
       Director General of Police,
       Chhatrapati Shivaji Maharaj
       Marg, Colaba, Mumbai 400001.                ... RESPONDENTS




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                             ...
Mr. Makrand D. Adkar, Senior Counsel, with          Mr. P. B. Shirsath,
Advocate for Petitioner.

Mr. A. G. Talhar, Advocate for Respondent Nos.1 to 3.
Mr. M. M. Nerlikar, APP for Respondent No.4.
                                 ...

                                 AND
              CRIMINAL WRIT PETITION NO.1717 OF 2020


Miss Sonal Paras Chordiya,
Aged: 31 years, Occupation: Business,
Indian Inhabitant,
Resident at: 186, Akshada Garden,
Poona-Ahmednagar Highway,
Ahmednagar - 414001.                               ... PETITIONER

       VERSUS

1.     Union of India, through the Ministry of
       Finance, Department of Revenue, Room
       No. 46, North Block, New Delhi - 110 001.

2.     Directorate General of GST Intelligence
       (DGGI)
       1st & 2nd Floor, Wing Number 06,
       West Block, 08 RK Puram,
       New Delhi 110066.

3.     Chief Commissioner of CGST, Nagpur
       Nashik Commissionerate,
       Ahmednagar Division,
       Post Box No.81, GST Bhavan,
       Civil Lines, Telengkhedi Road,
       Nagpur 440001.

4.     State of Maharashtra, through the
       Director General of Police,
       Chhatrapati Shivaji Maharaj
       Marg, Colaba, Mumbai 400001.                ... RESPONDENTS




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                             ...
Mr. Makrand D. Adkar, Senior Counsel, with          Mr. P. B. Shirsath,
Advocate for Petitioner.

Mr. A. G. Talhar, Advocate for Respondent Nos.1 to 3.
Mr. A. V. Deshmukh, APP for Respondent No.4.
                                ...

                                 AND
              CRIMINAL WRIT PETITION NO.1718 OF 2020


Mr. Kirtikumar Manikchand Dugad,
Aged: 50 years, Occupation: Business,
Indian Inhabitant,
Resident at: Plot No. 5, S. No. 686,
Natekar Society Bibwewadi,
Pune 411037.                                       ... PETITIONER

       VERSUS

1.     Union of India, through the Ministry of
       Finance, Department of Revenue, Room
       No. 46, North Block, New Delhi - 110 001.

2.     Directorate General of GST Intelligence
       (DGGI)
       1st & 2nd Floor, Wing Number 06,
       West Block, 08 RK Puram,
       New Delhi 110066.

3.     Chief Commissioner of CGST, Nagpur
       Nashik Commissionerate,
       Ahmednagar Division,
       Post Box No.81, GST Bhavan,
       Civil Lines, Telengkhedi Road,
       Nagpur 440001.

4.     State of Maharashtra, through the
       Director General of Police,
       Chhatrapati Shivaji Maharaj
       Marg, Colaba, Mumbai 400001.                ... RESPONDENTS




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                             ...
Mr. Makrand D. Adkar, Senior Counsel, with                     Mr. P. B. Shirsath,
Advocate for Petitioner.

Mr. A. G. Talhar, Advocate for Respondent Nos.1 to 3.
Mr. M. M. Nerlikar, APP for Respondent No.4.
                                  ...


                                        CORAM : T. V. NALAWADE &
                                                M. G. SEWLIKAR, JJ.

                                        DATE       :   15th January, 2021.


O R D E R: (Per T. V. Nalawade, J.)


.                  All the proceedings are filed for the following reliefs:


                      "a.      This Hon'ble Court be pleased to
                      exercise its power under Article 226 of the

Constitution 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

6 Cri.W.P.1715.20 and others.odt

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

contention of the Petitioners that as there was allegations of

commission of offence under Section 132 of the Act and it was

informed to them that there was GST liabilities of Rs.84,00,046/-

(Rupees Eighty-Four Lakh and Forty-Six Only), the Petitioner

deposited this amount with Respondent No.2, but under protest. It is

the contentions of the Petitioners that they want to contest the liability

levied against them.

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4                  In the petitions, it is mentioned that the Petitioners want to

challenge the prosecution as it is on wrong conceptions and as the

provisions of Sections 154, 157 and 172 of the Code of Criminal

Procedure are not followed by the Respondents. It is the contentions

of the Petitioners that all the provisions of the Code of Criminal

Procedure need to be applied for registration of crime, investigation

and for taking cognizance of the offence and as the procedure is not

followed, action taken against them is illegal.

5 As against the aforesaid contentions of the Petitioners, the

Respondent department has contended that no summons as such is

issued against the Petitioners and the petitions are based on

misconceptions. It is contended that the department is following the

procedure given under the Act and the officers are acting as per the

powers vested in them by the Act. It is the contentions of the

Respondent that the investigation into the business of M/s Rutu

Enterprises revealed that fake invoices without receipt or supply of

goods or services were prepared for availing input tax credit and that is

the fraud played by M/s. Rutu Enterprises. It is contended that many

invoices were issued to M/s. Ganraj Ispat Private Limited, company of

the Petitioners involving the amount of Rs.5,50,66,962/- for which GST

of Rs.84,00,046/- is recoverable. It is contended that after gathering

such information, search was taken of the premises of M/s. Ganraj

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Ispat Private Limited on 24th November, 2020 and the documents

collected revealed that there were such fake invoices issued by M/s.

Rutu Enterprises to M/s. Ganraj Ispat Private Limited. It is contended

that statement of Shri Tushar Munot was confronted to the Petitioners

and the statement of Gaurav Dugad, a director of M/s. Ganraj Ispat

Private Limited came to be recorded on 24th November, 2020 under

Section 70 of the Act (Petitioner of Criminal Writ Petition No.1716 of

2020). It is contended that this Petitioner agreed to reverse the

inadmissible ITC availed by them on the invoices issued by M/s. Rutu

Enterprises and then the amount of Rs.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





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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 on

many interim orders made by the High Courts and some orders made

by the Supreme Court. Copy of order made by the Honourable Apex

Court in Special Leave to Appeal (Criminal) Nos.4322-4324 of 2019

arising out of many matters including the matter of Union of India Vs.

Sapna Jain and others, is produced. The order dated 29th May, 2019

is as under:

"Delay condoned.

Issue notice returnable in four weeks.

As different High Courts of the country have taken divergent views in the matter, we are of the view that the position in law should be clarified by this Court. Hence, the notice.

As the accused-respondents have been granted the privilege of pre-arrest bail by the High Court by the impugned orders, at this stage, we are not inclined to interfere with the same. However, we make it clear that the High Courts while entertaining such request in future, will keep in mind that this Court by order dated 27.5.2019 passed in SLP(Crl.) No. 4430/2019 had

10 Cri.W.P.1715.20 and others.odt

dismissed the special leave petition filed against the judgment and order of the Telangana High Court in a similar matter, wherein the High Court of Telangana had taken a view contrary to what has been held by the High Court in the present case.

Beyond the above, we do not consider it necessary to observe anything further.

The present matters alongwith other connected matters (SLP (Crl.) No. 244/2019, W.P. (Crl.) No. 118/2019, T.C. (Crl.) No. 3/2018, T.C. (Crl.) No. 4/2018, SLP (Crl.) No. 4634/2014, SLP (Crl.) No. 993/2016, W.P. (Crl.) No. 309/2018, W.P. (Crl.) No. 333/2018 and W.P. (Crl.) No. 34/2019) be listed before a Bench of three Judges.

SLP(Crl.) No. 4571/2019

Having heard learned Counsel for the petitioner and upon perusing the relevant material, we are not inclined to interfere. The special leave petition is accordingly dismissed.

Pending interlocutory applications, if any, shall stand disposed of."

8 The learned counsel for Petitioners made specific

submissions in respect of Writ Petition (CRL.) No. 118 of 2019 filed in

Supreme Court and copy of the petition is produced. He submitted

that in the proceeding like Writ Petition (CRL.) No. 118 of 2019 filed by

Mukesh Kothari, it is the contentions of Kothari that the procedure

11 Cri.W.P.1715.20 and others.odt

given under Chapter XII of the Code of the Code of Criminal Procedure

is mandatory in such cases and if that procedure is not followed, the

investigation will be 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 by Madras High Court

12 Cri.W.P.1715.20 and others.odt

in the case reported as 2019 SCC OnLine Mad 31224, (Jayachandran

Alloys (P) Ltd., Rep. By its Managing Director Vs. Superintendent of

GST and Central Excise and others) and submitted that in that case

there are observations, which support the contentions made by the

present Petitioners. He submitted that the Madras High Court referred

some observations made by the Apex Court in C.A. No.8081/2018 in

order dated 23.01.2019 and the observations are as under:

"37. The aforesaid decision was carried in Appeal before the Supreme Court and the following order passed in C.A.No.8081/2018 & C.A.No.8082/2018, dated 23.01.2019:-

'Heard learned counsel for the parties at length.

The issue is as to whether the power of arrest under Section 91 of the Finance Act, 1994 ('the said Act') can be exercised without following the procedure as set out in Section 73(3) and (4) of the said Act. The High Court has decided, after detailed discussion, that it is mandatory to follow the procedure contained in Section 73(3) and (4) of the said Act before going ahead with the arrest of a person under Sections 90 and 91. We are in agreement with the aforesaid conclusion and see no reason to deviate from it.

Accordingly, these appeals are dismissed.'"

These observations are in support of proposition that provisions of

13 Cri.W.P.1715.20 and others.odt

special law will prevail over provisions of the Code of Criminal

Procedure.

11 He then placed reliance on observations made by the

Bombay High Court in the case reported as 2019 SCC OnLine Bom

9840, (Champsi M. Shah and Others Vs. Union of India and Others )

and he submitted that protection was given in similar case by this

Court at Principal Seat. Then he placed reliance on the observations

made by the Apex Court in landmark case reported as 1984 AIR 718,

(A. R. Antulay Vs. Ramdas Sriniwas Nayak and another) and

submitted that the entire procedure given in the Code of Criminal

Procedure needs to be followed even in the matters involving GST. He

has produced some other interim orders made by the Apex Court, but

the petitions showing the contentions of those persons are not

produced. He submitted that the matters, which were taken to the

Supreme Court against the orders made by this Court at Principal Seat

are still pending at Principal Seat and the aforesaid points will be

considered by the Supreme Court. Again it is reiterated 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

14 Cri.W.P.1715.20 and others.odt

and he placed reliance on some observations made by the Telangana

High Court in Writ Petition No.4764 of 2019, (P.V. Ramana Reddy Vs.

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 Vs. 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. The Gujarat high Court has

referred the Finance Act, 1994, which was considered by the Madras

High Court. Then the Gujarat High Court has referred the case

reported as (2011) 3 SCC 581, (Radheshyam Kejriwal Vs. State of

West Bengal and another), and the principles laid down by the

Supreme Court are quoted. They are at paragraph 66 and they are as

under:

"66. The Supreme Court in the case of Radheshyam Kejriwal v. State of West Bengal and another [(2011) 3 SCC 581] has culled out the various principles in the

15 Cri.W.P.1715.20 and others.odt

aforesaid context as under :

"38. The ratio which can be culled out from these decisions can broadly be stated as follows:

(i) Adjudication proceedings and criminal prosecution can be launched simultaneously;

(ii) Decision in adjudication proceedings is not necessary before initiating criminal prosecution;

(iii) Adjudication proceedings and criminal proceedings are independent in nature to each other;

(iv) The finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution;

(v) Adjudication proceedings by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20(2) of the Constitution or Section 300 of the Code of Criminal Procedure;

(vi) The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceedings is on technical ground and not on merit, prosecution may continue; and

(vii) In case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be

16 Cri.W.P.1715.20 and others.odt

allowed to continue, the underlying principle being the higher standard of proof in criminal cases."

13 The Gujarat High Court specifically framed some

questions like whether power of arrest given under Section 69 of the

Act can be invoked only upon completion of the adjudication process,

finalising the assessment and determination of liability and this point is

answered in negative. It is laid down by the Gujarat High Court that

the prosecution and adjudication proceedings can be started

simultaneously though there may be some exceptional circumstances

in which adjudication proceeding and its result 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 Rs.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

17 Cri.W.P.1715.20 and others.odt

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 provision shows that

even before registration of crime, such power can be exercised. It was

submitted that crime is registered under the Act with the officer,

authority created under the Act. The provision of Section 67(10) of the

Act runs as under:

"67. Power of inspection, search and seizure: -

(1) ....

(10) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure, shall, so far as may be, apply to search and seizure under this section subject to the modification that sub-section (5) of section 165 of the said Code shall have effect as if for the word "Magistrate", wherever it occurs, the word "Commissioner" were substituted."

16 The provision of Section 67(10) of the Act shows that the

provision of Section 165(5) of the Code of Criminal Procedure will not

18 Cri.W.P.1715.20 and others.odt

be applicable to such search and seizure and the report needs to be

given to the Commissioner instead of Magistrate. This provision

shows that this is special in nature and so this provision will have to be

followed.

17 Section 69 of the Act shows power of officers to effect

arrest. It runs as under:

"69. Power to arrest. - (1) Where the Commissioner has reasons to believe that a person has committed any offence specified in clause ( a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132 which is punishable under clause (i) or

(ii) of sub-section (1), or sub-section (2) of the said section, he may, by order, authorise any officer of central tax to arrest such person.

(2) Where a person is arrested under sub- section (1) for an offence specified under sub-section (5) of section 132, the officer authorised to arrest the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twenty-four hours.

(3) Subject to the provisions of the Code of Criminal Procedure, 1973 (2 of 1974),-

(a) where a person is arrested under sub-section (1) for any offence specified under sub- section (4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of the Magistrate;

19 Cri.W.P.1715.20 and others.odt

(b) in the case of a non-cognizable and bailable offence, the Deputy Commissioner or the Assistant Commissioner shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer-in-charge of a police station."

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

20 Cri.W.P.1715.20 and others.odt

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 this Act, or the rules made thereunder leading to wrongful availment or utilisation of input tax credit or refund of tax;

(c) avails input tax credit using such invoice or bill referred to in clause (b);"

Thus, the allegations against the Petitioners and the material quoted

above show that there is material for the offences punishable under

Sections 132 (1) (b) and (c) of the Act. The provisions of Section

132(4), 132(5) and 132(6) run as under:

"132. Punishment for certain offences. -

(1) ...

(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), all offences under this Act, except the offences referred to in sub-section (5) shall be non-cognizable and bailable. (5) The offences specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) and punishable under clause (i) of that sub-section shall be cognizable and non-bailable.

(6) A person shall not be prosecuted for any offence under this section except with the previous sanction of the Commissioner.

Explanation.-- For the purposes of this section, the term "tax" shall include the amount of tax evaded or the amount of input tax credit wrongly availed or utilised

21 Cri.W.P.1715.20 and others.odt

or refund wrongly taken under the provisions of this Act, the State Goods and Services Tax Act, the Integrated Goods and Services Tax Act or the Union Territory Goods and Services Tax Act and cess levied under the Goods and Services Tax (Compensation to States) Act."

19 The provision of Section 134 of the Act provides for taking

cognizance of the offences and it runs as under:

"134. Cognizance of offences. - No Court shall take cognizance of any offence punishable under this Act or the rules made thereunder except with the previous sanction of the Commissioner, and no Court inferior to that of a Magistrate of the First Class, shall try any such offence."

The criminal proceeding can be filed by the Respondent department

but such proceeding is not in existence at present. From that angle,

the petitions are premature.

20 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

22 Cri.W.P.1715.20 and others.odt

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 forgery.

22 The aforesaid circumstances and position of law are

sufficient for dismissal of all the proceedings. There are more

circumstances for making the order of dismissal. In the present matter,

23 Cri.W.P.1715.20 and others.odt

admittedly, no summons was issued against the Petitioners though one

director gave statement of the nature mentioned and the amount of

Rs.84,00,000/- came to be deposited by the company of the

Petitioners. When there are aforesaid circumstances, before the in-

charge Court some submissions were made for the Petitioners of the

nature mentioned in the order and the following interim order was

made in favour of the Petitioners.

"1. We have briefly heard the learned counsel

appearing on behalf of the petitioners, the learned ASGI on

behalf of respondent No.1 and the learned APP on behalf

of respondent No.4. The learned ASGI sought a pass over

for a few minutes.

2. This matter was then called out at the end of the

board and the learned ASGI submits that he causes an

appearance on behalf of respondent Nos.1, 2 and 3.

3. We have gone through the order dated 11.04.2019

passed by the learned Division Bench of this Court at the

Principal Seat in Criminal Writ Petition No.1996/2019 filed

by Sapna Jain with Criminal Writ Petition No.1997/2019

filed by Pinkesh Jain with Criminal Writ Petition

No.1998/2019 filed by Alpa Jain. This Court has granted

ad-interim protection to the petitioners by observing that

the petitioners would cooperate with the investigation and

24 Cri.W.P.1715.20 and others.odt

no coercive action shall be taken against the petitioners till

the next date.

4. The learned senior advocate for the petitioners

before us, makes a solemn statement, on instructions and

based on his personal knowledge, that the petitions

referred to above before the Principal Seat deal with the

same/ identical issue involved in all these petitions.

5. The learned ASGI is unable to state as to whether,

his clients would place the petitioners under arrest the

moment they appear before the authorities for

interrogation based on oral summons.

6. The learned senior advocate for the petitioners

makes a statement that no hearing is scheduled in

between 31.12.2020 and 11.01.2021 as they have still not

received any written summons from respondent No.2.

7. As such, stand over to 11.01.2021 in the urgent

admissions category.

8. The petitioners shall not be coerced to appear

before respondent No.2 until 11.01.2021."

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

25 Cri.W.P.1715.20 and others.odt

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

January, 2021 also, initially an attempt was made by the counsel, who

argued the matter that only the Petitioner from Criminal Writ Petition

No.1716 of 2020 had instructed him to argue the matter. When the

Court expressed that the Court will dispose of all the matters on merits

if the Court finds that admission is not possible, then only argument

was advanced in all the matters. Due to all these circumstances, this

Court holds that some costs needs to be imposed on the Petitioners.

In the result, the following order is passed:

                                                    26                       Cri.W.P.1715.20 and others.odt




                                            ORDER

               I.     All the petitions stand dismissed.


               II.    In    each      petition,   the   Petitioner     to    deposit

Rs.25,000/- (Rupees Twenty Five Thousand only)

as costs of the petition.

III. The amount is to be deposited in this Court within

four weeks from today and the amount is to be

given to the Respondents as the Respondents

must have spent amount for defending the present

matters.

      [ M. G. SEWLIKAR, J. ]                               [ T. V. NALAWADE, J. ]
ndm