Kishore Wadhwani vs. The State Of Madhya Pradesh

Held

The Court held that the constitutional validity of Section 132(6) of the CGST Act was not liable to be declared unconstitutional. The Court reasoned that this provision offers protection by requiring prior sanction from the Commissioner for prosecution, thus safeguarding individuals from false complaints. There was no evidence presented to suggest its misuse. Regarding the FIR, the Court found that the petitioner was not being prosecuted for an offence under the CGST Act in the present FIR. Instead, the FIR was registered under various sections of the IPC due to the petitioner fabricating numerous tax invoices to show inflated circulation for 'Dabang Duniya' newspaper, thereby attempting to legitimize unaccounted money and evade GST. The Court noted that the GST evasion was adjusted by showing artificial sales, and fake invoices were used to convert black money into white. Therefore, the case was triable under IPC sections (420, 467, 468, 471, 120-B) and not directly under the CGST Act. The only link was the attempt to whiten GST evasion proceeds through the newspaper business. The Court found no grounds to interfere with the ongoing investigation. The investigation was directed to be completed within two months. The petition was dismissed.

Facts

The petitioner, Kishore Wadhwani, proprietor of M/s Elora Tobacco Company Limited (ETCL), filed a writ petition challenging an FIR registered under Sections 420, 467, 468, 471 & 120-B of the IPC and the constitutional validity of Section 132(6) of the CGST Act. ETCL was investigated for alleged clandestine manufacturing and supply of cigarettes, evading duty/tax of approximately ₹2000 crores from July 2017 to June 2020. The petitioner was arrested in June 2020 under Section 69 of the CGST Act for an offence under Section 132(1)(a) and later granted bail. Subsequently, show-cause notices were issued for GST and central excise duty demands. The FIR in question, No.88/2021, was registered on 10.02.2021, alleging that the petitioner and his nephew generated fake and forged tax invoices for advertisements in 'Dabang Dunia' newspaper, inflating circulation figures to launder unaccounted money and evade GST. The GST authorities provided materials to the police, leading to the FIR.

Key Issues

1. Whether the registration of FIR No.88/2021 is impermissible as a second FIR for the same alleged offence, violating the principle laid down in T.T. Antony v/s The State of Kerala & Others, thereby constituting an abuse of process of law? 2. Whether Section 132(6) of the Central Goods & Services Tax Act, 2017, is unconstitutional? Petitioner's Arguments: - The petitioner argued that a second FIR for the same offence is impermissible, citing T.T. Antony v/s The State of Kerala & Others. He contended that since a prior FIR (Crime No.23/2020) was registered under Section 132(1)(a)(i) of the CGST Act and IPC sections, the current FIR for the same transaction is an abuse of process, supported by judgments in Deepak Singhal v/s Union of India & Others, Amitbhai Anilchandra Shaj v/s Central Bureau of Investigation & Another, Krishna Lal Chawla & Others v/s The State of Uttar Pradesh & Another, and Tarak Dash Mukharjee & Others v/s The State of Uttar Pradesh & Others. - The petitioner also argued that the power under Article 226 of the Constitution is akin to Section 482 of the Cr.P.C., making the writ petition maintainable for quashing an FIR. - The petitioner did not argue on the unconstitutionality of Section 132(6) of the CGST Act. Revenue/State's Arguments: - The State argued that the current FIR pertains to forgery and cheating concerning advertisements in 'Dabang Dunia Press' and is distinct from the GST evasion case. They highlighted that statements from individuals denied making payments for advertisements, and invoices were found to be fake. The investigation is ongoing, and the allegations are serious. - The GST Department contended that the FIR is unrelated to the CGST Act case, and the fake invoices were used to evade GST. They emphasized that the scope of both FIRs is different.