Ms Alite Billet And Coil Corporation Through Its Proprietor Shri Raj Kumar Mishra vs. The State Of Jharkhand

Held

The Court held that the basis for filing the complaint cases, which were the assessment orders, had already been quashed by a Division Bench of the High Court. The Division Bench had also remanded the matters back to the concerned authorities for passing fresh orders in accordance with the law. The Court reasoned that allowing the criminal proceedings to continue when their very foundation has been quashed would amount to an abuse of the process of law. Therefore, the orders taking cognizance and the entire criminal proceedings in connection with the Economic Offences Cases were quashed. The Court also noted that if, after fresh assessment, the State finds a new cause of action, it may proceed in accordance with law. No specific issue was left undecided.

Facts

These writ petitions were filed by various proprietorships and private limited companies, along with their proprietors or directors, seeking to quash orders taking cognizance and the entire criminal proceedings initiated against them. The criminal cases were based on allegations that the Input Tax Credit (ITC) claimed for the year 2017-2018 was not in accordance with law, and that ITC was wrongly availed due to fraud or fake firms. The Assessing Authority had made these observations, and earlier DRC-01 and DRC-02 notices were issued, rejecting the petitioners' replies. The petitioners argued that the assessment orders, which formed the basis of the complaint cases, were themselves challenged and subsequently quashed by a Division Bench of the same High Court in earlier writ petitions. The Division Bench had remanded these matters back to the concerned authorities for fresh adjudication.

Key Issues

1. Whether the criminal proceedings initiated for alleged wrongful availment of Input Tax Credit are liable to be quashed when the underlying assessment orders forming the basis of these proceedings have already been quashed by a Division Bench of this Court? (Question of law) Petitioner's contention: The petitioners argued that the complaint cases were filed based on assessment orders that were subsequently challenged and quashed by this Court in earlier writ petitions (W.P.(T) No. 27/2021, etc.). The Division Bench had remanded the matters for fresh adjudication. Since the very foundation of the criminal proceedings has been nullified, allowing the criminal cases to continue would constitute an abuse of process. They relied on the Division Bench's order dated 14.09.2022 which quashed the summary show cause notices and remanded the matters. Respondent's contention: The learned counsel for the respondent-State fairly admitted the position regarding the quashing of the assessment orders that were the subject matter of the earlier writ petitions.