Satya Prakash Singh Alias S P Singh vs. The State Of Jharkhand Through Sri Saday Kumar

Held

The Court quashed the entire criminal proceedings in connection with Bokaro Steel City P.S. Case No. 121 of 2018 (G.R. No. 663 of 2018). The Court found that the basis for filing the FIR had already been quashed by a Division Bench of the High Court in a batch of writ petitions (W.P.(T) No. 91 of 2021, W.P.(T) No. 94 of 2021, and W.P.(T) No. 163 of 2021). In those writ petitions, the demand and assessment orders were quashed, and the matters were remitted back for fresh consideration after fulfilling the modalities. The Court reasoned that allowing the criminal proceedings to continue, when the very foundation (the demand and assessment orders) had been quashed, would amount to an abuse of the process of law. The Court explicitly stated that if, after the fresh assessment, the State finds a new cause of action, it may proceed in accordance with law. The issue regarding the validity of the sanction by the Additional Commissioner and the maintainability of an FIR versus a complaint was not directly addressed as the proceedings were quashed on the ground of the prior Division Bench judgment.

Facts

The petitioners, Directors of M/s Shri Ram Allows and Ingot Pvt. Ltd., are challenging criminal proceedings initiated against them. The FIR, registered under Sections 409, 420, and 120-B of the Indian Penal Code, read with specific sections of the Goods and Services Tax Act, 2017, alleges their abetment in the mis-utilization of Input Tax Credit (ITC) by two other dealers, M/s Sidhi Vinayak Metal and Salt Company Pvt. Ltd. and M/s Renu Raj Enterprises, during the period of July 1, 2017, to March 31, 2018. The petitioners argue that the prosecution was sanctioned by the Additional Commissioner, not the Commissioner as required by Section 134 of the Jharkhand GST Act, and that the company, not individuals, should have been accused under Section 137. They also point out that GST offenses are compoundable under Section 138 and that a complaint, not an FIR, should have been filed. Crucially, they refer to a prior Division Bench judgment that quashed demand and assessment orders related to their cases and remitted them for fresh consideration.

Key Issues

1. Whether the entire criminal proceedings, initiated under Sections 409, 420, and 120-B of the Indian Penal Code read with Sections 73, 74, 132(1)(e), 132(1)(f), 132(1)(i), and 132(1)(iv) of the Goods and Services Tax Act, 2017, are liable to be quashed, considering the petitioners' contention that no such offenses are made out. 2. Whether the prosecution sanction granted by the Additional Commissioner, instead of the Commissioner, renders the proceedings invalid, as argued by the petitioners citing Section 134 of the Jharkhand Goods and Services Tax Act. 3. Whether the registration of an FIR is appropriate for GST-related offenses, given the petitioners' argument that only a complaint is maintainable under the Act. 4. Whether the prior quashing of demand and assessment orders by a Division Bench of this Court, and the subsequent remittance of those matters for fresh consideration, forms a valid basis for quashing the present criminal proceedings. Petitioner's arguments: No offenses under IPC or GST Act are made out. Sanction for prosecution was improperly granted by the Additional Commissioner, not the Commissioner as required by Section 134. Section 137 mandates that companies, not individuals, should be accused. GST offenses are compoundable under Section 138. An FIR is not maintainable; only a complaint is permissible. A Division Bench judgment has already quashed the demand and assessment orders, forming the basis of the FIR, and remitted the matter for fresh consideration. Revenue's arguments: Not recorded in the judgment.