Satyendra Singh Kushwah vs The State Of Jharkhand
2023 Latest Caselaw 3722 Jhar

                                                    1                   Cr.M.P. No. 2454 of 2019
                                                                                  With
                                                                        Cr.M.P. No. 2449 of 2019



                   IN THE HIGH COURT OF JHARKHAND AT RANCHI
                             Cr.M.P. No. 2454 of 2019
                 Satyendra Singh Kushwah                         ... Petitioner
                                        -Versus-
            1.   The State of Jharkhand
            2.   Manish Vijay, Deputy Commissioner, Central Goods and Service Tax
                 and Central Excise, Central Revenue Building, Ranchi
                                                                 ... Opposite Parties
                                            With
                                Cr.M.P. No. 2449 of 2019
                 M/s. SSK Devcon Private Limited, Ranchi, through its authorizes
                 Secretary namely Ajit Singh                     ... Petitioner
                                        -Versus-
            1.   The State of Jharkhand
            2.   Manish Vijay, Deputy Commissioner, Central Goods and Service Tax
                 and Central Excise, Central Revenue Building, Ranchi
                                                                 ... Opposite Parties
                                           -----

            CORAM:         HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI
                                            -----
            For the Petitioners       : Mrs. Shilpi Sandil Gadodia, Advocate
            For the State             : None
            For O.P. No.2             : Mr. P.A.S. Pati, Advocate
                                            -----

11/05.10.2023     Both the petitions are identical and both are on the board today and

in view of that, both the petitions have been heard together with consent of

the parties.

2. Heard Mrs. Shilpi Sandil Gadodia, learned counsel for the petitioners

and Mr. P.A.S. Pati, learned counsel for opposite party no.2. Nobody appears

on behalf of the State.

3. In Cr.M.P. No.2454 of 2019, the Director of M/s. SSK Devcon Private

Limited, namely, Satyendra Singh Kushwah is the petitioner and in Cr.M.P.

No.2449 of 2019, the said company is the petitioner.

4. In both the petitions, the prayer is made for quashing the entire

criminal proceedings arising out of Complaint Case No.1880 of 2019, dated

15.04.2019 including the order taking cognizance dated 19.06.2019,

With Cr.M.P. No. 2449 of 2019

whereby, the learned Court has been pleased to take cognizance under

Section 174 of the Indian Penal Code, pending in the court of the learned

Judicial Magistrate, 1st Class, Ranchi.

5. The complaint case was filed alleging therein that the accused had

taken G.S.T. Registration on 14.12.2017 and has been providing various

Taxable Services to various Service recipients since December, 2017, but has

not made payment of GST from January, 2018 to November, 2018 before

initiation of the investigation. It was further alleged that the accused

deliberately ignored the summons issued by the Central Goods and Service

Tax Department under Section 70 of the Central Goods and Service Tax Act,

2017 (hereinafter to be referred to as 'the CGST Act, 2017') and did not

appear at any date against four summons issued to the accused. It was also

alleged that the accused has violated the provisions of Section 70 of the

CGST Act and since the accused did not appear against the summons,

proceeding under Section 174 of the Indian Penal Code is initiated against

the accused person.

6. Mrs. Shilpi Sandil Gadodia, learned counsel appearing for the

petitioners submits that pursuant to the complaint case, the learned court

has been pleased to take cognizance vide order dated 19.06.2019 under

Section 174 of the Indian Penal Code against the said company and its

Director. She further submits that although in the complaint, the allegations

are made that four summons have been issued against the petitioner-

company, but the details of the said summons have not been mentioned in

the complaint petition. She submits that the petitioner-company is engaged

in providing services for transportation of coal and with the advent of the

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GST regime, the petitioner obtained registration in respect of its business

carried out in the State of Jharkhand. She also submits that for the services

provided by the petitioner-company, it raised bills for payment to its clients

and the said clients being service recipients were delaying in releasing

payment to the petitioner-company. She submits that the GST amount to

the tune of Rs.5,60,52,391/- has been paid in three installments. She

submits that the GST is a complete Code in itself and there are provisions of

penalty and in view of that, Section 174 of the Indian Penal Code is not

attracted. She draws attention of the Court to Section 70 of the CGST Act,

2017 and submits that power to summon persons to give evidence and

produce documents is prescribed under Section 70 of the said Act. She

further draws attention of the Court to Section 125 of the CGST Act, 2017

and submits that general penalty is prescribed therein to the tune of

maximum Rs.25,000/- only. She further submits that Section 132 of the

CGST Act, 2017 is the provision meant for punishment for certain offences,

which are prescribed in the said Section. She also draws attention of the

Court to the summons, which are annexed in Cr.M.P. No.2449 of 2019

particularly at Annexure-3, which is dated 29.12.2018 issued by the

company through its Director and submits that a sum of Rs.1,56,50,520/-

was paid on 05.12.2018 and by the said letter, further 45 days' time was

requested for further depositing the GST amount. By way of referring

Annexure-4, she submits that the letter dated 14.01.2019 was issued by the

GST authority, whereby, direction was issued to make full payment of GST

amount. She further submits that thereafter total sum of Rs.1.5 Crore was

paid on 14.01.2019 and 16.01.2019 and finally total amount of

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Rs.5,60,52,391/- was paid on 08.02.2019. She submits that in view of that,

summon has already been replied and there was no occasion on the

authority concerned to file complaint case under Section 174 of the Indian

Penal Code. She also submits that even the Director, namely, Satyendra

Singh Kushwah of the said company has been made accused by way of

filing amendment petition before the learned court which was allowed and

there is no averment with regard to the involvement of Satyendra Singh

Kushwah, who happened to be the Director of the said company. She

further submits that the statute is not providing any vicarious liability that

cannot be imposed. She submits that the deposition of the GST amount is

accepted by the authority concerned. On these grounds, she submits that

the cognizance under Section 174 of the Indian Penal Code is bad in law.

7. On the other hand, Mr. P.A.S. Pati, learned counsel for opposite party

no.2 submits that the petitioner has failed to comply with summons without

lawful excuse and intentionally omit to give evidence or to make statement

and to produce the documents and the things mentioned in the schedule.

He further submits that the authorized representative of the company has

not appeared and that is why the complaint case was filed under Section

174 of the Indian Penal Code, which is meant for non-compliance of the

direction of the public authority and GST authority is the public authority in

view of Section 156 of the CGST Act, 2017. He also submits that the

petitioner-company is a private limited company and in view of that, Section

89 of the CGST Act is applicable and there is no requirement of giving such

statement and in view of that provision, every person who was looking day-

to-day affairs of the company is liable. He submits that the said ground was

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also taken in the amendment, which was allowed on 13.05.2019 and,

thereafter, cognizance was taken on 19.06.2019 and, therefore, the

amendment was at pre-cognizance stage and the same is permissible. He

relied upon paragraph 20 of the judgment passed by the Hon'ble Supreme

Court in the case of S.R. Sukumar v. S. Sunaad Raghuram , reported in

(2015) 9 SCC 609.

8. Paragraph 20 of the said judgment is quoted hereinbelow:

"20. In the instant case, the amendment application was filed on 24-5-2007 to carry out the amendment by adding Paras 11(a) and 11(b). Though, the proposed amendment was not a formal amendment, but a substantial one, the Magistrate allowed the amendment application mainly on the ground that no cognizance was taken of the complaint before the disposal of amendment application. Firstly, the Magistrate was yet to apply the judicial mind to the contents of the complaint and had not taken cognizance of the matter. Secondly, since summons was yet to be ordered to be issued to the accused, no prejudice would be caused to the accused. Thirdly, the amendment did not change the original nature of the complaint being one for defamation. Fourthly, the publication of poem Khalnayakaru being in the nature of subsequent event created a new cause of action in favour of the respondent which could have been prosecuted by the respondent by filing a separate complaint and therefore, to avoid multiplicity of proceedings, the trial court allowed the amendment application. Considering these factors which weighed in the mind of the courts below, in our view, the High Court rightly declined to interfere with the order passed by the Magistrate allowing the amendment application and the impugned order does not suffer from any serious infirmity warranting interference in exercise of jurisdiction under Article 136 of the Constitution."

9. By way of referring Section 135 of the CGST Act, Mr. P.A.S. Pati,

learned counsel for opposite party no.2 submits that presumption of

culpable mental state can be proved only in trial. He submits that once

summon is issued and the petitioner has not appeared, in view of that

Section 174 of the Indian Penal Code is well maintainable. On these

grounds, he submits that these petitions are fit to be dismissed.

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10. In view of the above facts and submissions of the learned counsel for

the parties, the Court has gone through the materials on the record

including the summons, which have been issued to the company and the

same are brought on record in Cr.M.P. No.2449 of 2019. The summon

contained in Annexure-2, dated 27.12.2018 is addressed to M/s SSK Devcon

Private Limited and pursuant to that, the company vide letter dated

29.12.2018 replied the said summon informing the authority concerned that

sum of Rs.1,56,20,520/- was deposited on 05.12.2018 and 45 days' further

time was requested for depositing further dues. Vide letter dated

14.01.2019 contained in Annexure-4, the authority allowed time and

directed to make full payment of GST amount. The sum of Rs.50 Lakhs and

Rs.1 Crore were deposited on 14.01.2019 and 16.01.2019 respectively,

which was informed to the authority concerned vide letter dated 17.01.2019

and further four weeks' time was requested to deposit further amount and

finally on 08.02.2019, total sum of Rs.5,60,52,391/- inclusive of the earlier

payments have been made to the authority concerned. Thus, it is crystal

clear that so far as the amount of GST is concerned, that has already been

deposited. However in the counter affidavit, it has been stated that sum of

Rs.5,21,95,792/- has been received by the authority concerned subject to

verification. However, non-filing of any case or initiation of proceeding for

any recovery suggest that there is no due against the petitioners.

11. It further appears that there is no further proceeding against the

petitioner for determination of any tax not paid and that provision is there in

Section 73 of the CGST Act, 2017. Thus, it is an admitted fact that the

amount in question has already been paid.

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12. Section 70 of the CGST Act, 2017 speaks of power to summon

persons to give evidence and produce documents and inquiry under the

same will proceed under the provision of the Civil Procedure Code and only

Sections 193 and 228 of the Indian Penal Code is applicable in view of Sub-

section (2) of Section 70 of the said Act.

13. Section 125 of the CGST Act, 2017 speaks of general penalty to the

tune of maximum Rs.25,000/- only and Section 132 of the said Act,

prescribes for punishment. It is an admitted case that no case under

Sections 125 and 132 of the said Act is initiated against the petitioners.

14. The documents on record clearly suggest that summons have been

replied, which was also entertained by the authority by way of granting

time. Thus, it cannot be said that this is a case of non-compliance of

summon issued by the authority concerned.

15. So far as the amendment in the complaint petition is concerned, the

Court is not required to answer the same in view of the judgment relied by

Mr. P.A.S. Pati in the case of S.R. Sukumar (supra).

16. In view of the above facts and considering that the summons were

replied, which were entertained by the authority concerned and it cannot be

said that the petitioners have not complied with the summons, issued by

the authority concerned and further there are procedure prescribed under

the CGST Act, 2017 for penalty under Section 125 which restricted to a fine

of Rs.25,000/- only and none of the failure prescribed in Section 132 of the

said Act is the subject matter of the present cases and further Section 70 of

the said Act speaks of procedure to be adopted for summoning, that will in

accordance with the Code of Civil Procedure and further considering that

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the reply to the summons were entertained by the authority concerned, to

allow to continue the proceeding under Section 174 of the Indian Penal

Code against the petitioners will amount to abuse of process of law.

17. In view of the aforesaid facts, reasons and analysis, the entire

criminal proceedings arising out of Complaint Case No.1880 of 2019,

dated 15.04.2019 including the order taking cognizance dated 19.06.2019,

pending in the Court of the learned Judicial Magistrate, 1 st Class, Ranchi

are quashed.

18. Accordingly, these petitions are allowed and disposed of.

19. Pending I.A., if any, is disposed of.

20 Interim order, if any granted by this Court, stands vacated.

(Sanjay Kumar Dwivedi, J.) Ajay/ A.F.R.