Narayan Kumar Khaitan vs. Union Of INDIA

Facts

The petitioner assailed an order dated 18.12.2018 passed by the learned S.D.J.M., Panposh, Rourkela, in 2(C)CC Case No. 170 of 2018. By this order, the court below took cognizance of offences under Section 132(1)(b) and 132(1)(l) of the Central Goods and Services Tax Act, 2017, read with Section 120-B of the Indian Penal Code. The court found sufficient grounds to proceed against the petitioner, who was named as an accused. The petitioner's revision application was filed before the High Court on 17.07.2019.

Held

The High Court held that the impugned order passed by the learned S.D.J.M. was vulnerable because it failed to address the crucial aspect of whether sanction was required for taking cognizance of the offences under the CGST Act. The court noted that this requirement of sanction was not touched upon by the court below in its order. Consequently, the High Court set aside the impugned order. The matter was remitted back to the court below with a direction to reconsider the question of taking cognizance of the offences under the CGST Act and to pass a fresh order in accordance with the law. The court did not decide on the merits of the allegations or the validity of the sanction itself, but rather on the procedural lapse in the initial cognizance order.

Key Issues

1. Whether the learned S.D.J.M. erred in law by taking cognizance of offences under Section 132(1)(b) and 132(1)(l) of the CGST Act, 2017, in the absence of the required sanction under Section 134 of the CGST Act, thereby rendering the impugned order vulnerable. Petitioner's Contention: The petitioner argued that the court below committed a legal error by taking cognizance of the offences without the mandatory sanction required under Section 134 of the CGST Act, making the impugned order legally unsustainable and liable for quashment. Revenue's Contention: The learned Additional Standing Counsel for GST Intelligence submitted that such a technical objection at this stage is not entertainable and that the petitioner is at liberty to raise this issue later, either during the consideration of charge framing or thereafter.