Nishant Sahu vs. State Of Chhattisgarh

Held

The High Court held that the allegations in the FIR and the material collected during investigation disclose the commission of cognizable offences, warranting adjudication by the competent criminal court. The Court found that the prosecution case is not confined to mere non-payment or short payment of tax but involves allegations of bogus sales invoices and fictitious transactions leading to wrongful loss to the State revenue. The submissions regarding the exclusive applicability of the Chhattisgarh VAT Act, absence of reassessment proceedings, requirement of prior sanction, and the nature of alleged acts were considered matters involving disputed questions of fact and mixed questions of law and fact. The Court reasoned that such issues require a detailed examination of evidence, which is beyond the permissible scope of jurisdiction under Section 528 of the BNSS. The Court emphasized that it is not expected to weigh evidence or determine the likelihood of conviction at this stage. The allegations were not found to be absurd, inherently improbable, or patently frivolous. Therefore, the Court concluded that the case does not fall within the well-recognized categories for quashing criminal proceedings at the threshold. The petition was dismissed, with a clarification that the observations are confined to the petition and do not express an opinion on the merits of the case pending before the trial court.

Facts

The petitioner, Nishant Sahu, proprietor of M/s Sai Nath Enterprises, is challenging an FIR registered on June 27, 2014, under Sections 420 and 467 of the IPC, a chargesheet filed on July 16, 2025, and subsequent proceedings including cognizance taken on July 23, 2025, and charges framed on November 6, 2025. The prosecution alleges that the petitioner's firm, registered under the Chhattisgarh Value Added Tax Act, 2005, disclosed sales of approximately Rs. 47.37 lakh in VAT returns, while departmental records indicated transactions of Rs. 356.25 lakh. This discrepancy, attributed to bogus bills and tax evasion of Rs. 17.81 lakh, forms the basis of the criminal charges. The petitioner contends that the allegations pertain to violations under the VAT Act, which has a specific adjudication mechanism, and that the IPC offences are wrongly invoked.

Key Issues

1. Whether the criminal proceedings initiated under Sections 420 and 467 of the IPC are liable to be quashed as an abuse of process, given that the allegations primarily relate to tax evasion and discrepancies under the Chhattisgarh Value Added Tax Act, 2005, which provides a complete statutory mechanism for adjudication and penalty? (Question of law) 2. Whether the continuation of criminal proceedings is unsustainable due to the absence of reassessment proceedings under Section 22 of the VAT Act, lack of prior sanction for prosecution, and the alleged failure to establish the essential ingredients of cheating and forgery under the IPC? (Question of mixed law and fact) 3. Whether the inordinate and unexplained delay of approximately eleven years in completing the investigation, from the FIR in 2014 to the chargesheet in 2025, prejudices the petitioner's right to a fair and speedy trial under Article 21 of the Constitution? (Question of law) Petitioner's Arguments: The petitioner argued that the allegations are exclusively within the domain of the Chhattisgarh VAT Act, 2005, and invoking IPC sections is misconceived. They contended that no reassessment proceedings were undertaken, no prior sanction was obtained, and the essential ingredients for Sections 420 and 467 IPC are absent, as no forged documents were prepared or used. The petitioner also highlighted the eleven-year delay in investigation as a violation of Article 21. They relied on the principle that criminal proceedings should not be used for recovery of tax dues. Respondent's Arguments: The State/respondent argued that the allegations disclose the commission of cognizable offences, including cheating and forgery, and that the discrepancies arose from bogus sales invoices and fictitious transactions causing wrongful loss to the State revenue. They contended that the issues raised by the petitioner involve disputed questions of fact and mixed questions of law and fact, requiring detailed examination during trial, which is beyond the scope of a quashing petition.