Manoj Kumar Pareek vs. The State Of Jharkhand

Held

The Court held that the entire criminal proceedings, including the order taking cognizance, were liable to be quashed. The reasoning was based on the fact that the foundation of the FIR, which was the inspection and the subsequent show cause notice, had already been quashed by a Division Bench of the same High Court. The Division Bench had remanded the matter for a fresh decision. Therefore, allowing the criminal proceedings to continue would amount to an abuse of the process of law. The Court noted that the State could initiate fresh proceedings if a new cause of action arose after a fresh assessment, as per the Division Bench's order. The ratio decidendi is that criminal proceedings based on a foundation that has been judicially quashed and remanded for reconsideration by a higher bench are unsustainable and constitute an abuse of process.

Facts

The petitioner, Manoj Kumar Pareek, proprietor of M/s Sakambari Metalicks, filed a petition to quash criminal proceedings initiated against him. An FIR was registered on 08.06.2018 following an inspection on 24.05.2018, alleging that the business premises at Aditi-1A, Lokenath Complex, Station Road, Jugsalai, was not operational and lacked books of account. The allegations included the use of a forged rent agreement to obtain GST registration and fraudulent availment of Input Tax Credit (ITC) amounting to Rs. 5,73,42,065.90, and facilitating ITC for others totaling Rs. 5,83,55,218.69 between October 2017 and February 2018. The FIR was registered under Sections 464, 468, 470 of IPC and Sections 132(1)(c), 132(1)(e), and 132(1)(f) of the JGST Act. The petitioner contended that he had a genuine rent agreement and had closed his business on 21.03.2018, shifting to Jaipur, and had applied for registration cancellation. He also pointed to a previous Division Bench order quashing a show cause notice related to the inspection and remanding the matter for a fresh decision.

Key Issues

1. Whether the criminal proceedings initiated against the petitioner are liable to be quashed in light of the Division Bench's order dated 05.04.2023 in W.P.(T) No.1594 of 2019, which quashed the show cause notice and remanded the matter for a fresh decision. Petitioner's Arguments: The petitioner argued that the basis of the FIR, which stemmed from the inspection, had already been rendered invalid by the Division Bench's order. He asserted that the rent agreement was genuine and supported by rent receipts. He further submitted that the business had ceased operations and an application for registration cancellation was filed. He relied on the Division Bench's order quashing the show cause notice and the fact that similar criminal proceedings in other tagged matters were also quashed by this Court on 12.07.2023. Revenue's Arguments: The State counsel did not dispute the Division Bench's order but contended that criminality was made out, attracting IPC sections, and that a charge-sheet had been submitted.