Offence falls under Special Statute (GST) and IPC at the same time, whether the accused is answerable only for the Special Statue Offence?

[Ref: Shri Sentu Dey v. State of Tripura (Criminal Petition No. 14/2021 dated May 28, 2021)]

Section 132 of Central Goods and Service Tax Act, 2017 (‘CGST Act’) is a penal provision providing punishment for certain offences. Sub-Section (1) of Section 132 prescribes several acts and omissions which are made punishable with different sentences depending on the nature of the offence. Sub-Section (4) of Section 132 provides that notwithstanding anything contained in the Code of Criminal Procedure, all offences under the said Act, except those referred to in sub-Section (5) shall be non-cognizable and bailable. However, sub-Section (5) of Section 132 makes certain offences cognizable and non-bailable. Sub-Section (6) of Section 132 provides that a person shall not be prosecuted for any offence under the said Section except with the previous sanction of the Commissioner.

In the matter of Shri Sentu Dey v. State of Tripura [Criminal Petition No. 14/2021 dated May 28, 2021] it was noted that Section 132 of CGST Act provides punishment for certain offences related to the Goods and Service Tax related acts and omissions. However, it is not unknown that a certain act may fall within the said special penal statute at the same time may also have an element of an offence under IPC.

It is submitted that a complaint was filed by Superintendent of State Taxes, Bishalgarh Tripura to the Sub-Divisional Magistrate, Bishalgarh, u/s 132(1) of the Tripura State Goods and Service Tax 2017 read with Sections 406/409 of IPC against the accused person namely M/S Sentu Dey having GST-16AJITD6343A2ZT of Bairagi Bazar, Jumedpa, Sephaijala, Tripura alleging that Shri Sentu Dey a sole proprietor of M/S. Sentu Dey had under declared the outward taxable turnover and accordingly, against the demand of Rs 19.74 crores (approx.) raised for the period starting from August, 2017 onwards, paid only Rs. 1.18 crores (approx.) and when notices were issued to purchasing dealers, it was informed that the taxes had been already paid to the Petitioner. Further, it was alleged that the Petitioner though had collected the taxes from the purchasing dealers, had not deposited the same in the Government revenue, thus punishable under Section 132 of the CGST Act.

The question whether the accused in such a situation can be made answerable only for the special statue offence or general offence also, has been examined by the Supreme Court earlier. In case of Jayant and others vs. State of Madhya Pradesh, reported in (2021) 2 SCC 670, facts were that on a surprise inspection, the Mining Inspector found that the accused was indulging in illegal mining and transportation of minor minerals. He made a report suggesting that the offences can be compounded. This was accepted by the authorities and the accused also. Subsequently, it was reported that there was large scale illegal excavation and transportation of minerals without payment of royalty. The Magistrate passed and order taking note of such information. He was of the view that offences under the IPC were distinct from those punishable under Mines and Minerals (Development and Regulation) Act. He, therefore, directed registration of a criminal case against the accused and for investigation under Section 156(3) of Cr.P.C. The accused challenged the FIR under Section 482 of Cr.P.C. contending that in view of the bar under Section 22 of MMRD Act, the order passed by the Magistrate was unsustainable. The issue ultimately reached the Supreme Court. One of the questions considered by the Supreme Court was whether in case of illegal mining and transportation of minor minerals action by police for offence of theft under Section 378 of IPC was permissible in view of the provisions contained in MMRD Act. In this respect, it was held that –

17.3. Therefore, as in the present case, the Mining Inspectors prepared the cases under Rule 53 of the 1996 Rules and submitted them before the Mining Officers with the proposals of compounding the same for the amount calculated according to the Rules concerned and the Collector approved the said proposal and thereafter the private appellant violators accepted the decision and deposited the amount of penalty determined by the Collector for compounding the cases in view of sub-section (2) of Section 23-A of the MMDR Act and the 1996 Rules and even the 2006 Rules are framed in exercise of the powers under Section 15 of the MMDR Act, criminal complaints/proceedings for the offences under Sections 4/21 of the MMDR Act are not permissible and are not required to be proceeded further in view of the bar contained in sub-section (2) of Section 23-A of the MMDR Act. At the same time, as observed hereinabove, the criminal complaints/proceedings for the offences under IPC — Sections 379/414 IPC which are held to be distinct and different can be proceeded further, subject to the observations made hereinabove.”

In case of State (NCT of Delhi) vs. Sanjay, reported in (2014) 9 SCC 772, also similar question came up for consideration. It was held:

“72. From a close reading of the provisions of the MMDR Act and the offence defined under Section 378 IPC, it is manifest that the ingredients constituting the offence are different. The contravention of terms and conditions of mining lease or doing mining activity in violation of Section 4 of the Act is an offence punishable under Section 21 of the MMDR Act, whereas dishonestly removing sand, gravel and other minerals from the river, which is the property of the State, out of the State’s possession without the consent, constitute an offence of theft. Hence, merely because initiation of proceeding for commission of an offence under the MMDR Act on the basis of complaint cannot and shall not debar the police from taking action against persons for committing theft of sand and minerals in the manner mentioned above by exercising power under the Code of Criminal Procedure and submit a report before the Magistrate for taking cognizance against such persons. In other words, in a case where there is a theft of sand and gravel from the government land, the police can register a case, investigate the same and submit a final report under Section 173 Cr.PC before a Magistrate having jurisdiction for the purpose of taking cognizance as provided in Section 190(1)(d) of the Code of Criminal Procedure.

73. After giving our thoughtful consideration in the matter, in the light of the relevant provisions of the Act vis-à-vis the Code of Criminal Procedure and the Penal Code, we are of the definite opinion that the ingredients constituting the offence under the MMDR Act and the ingredients of dishonestly removing sand and gravel from the riverbeds without consent, which is the property of the State, is a distinct offence under IPC. Hence, for the commission of offence under Section 378 IPC, on receipt of the police report, the Magistrate having jurisdiction can take cognizance of the said offence without awaiting the receipt of complaint that may be filed by the authorised officer for taking cognizance in respect of violation of various provisions of the MMDR Act. Consequently, the contrary view taken by the different High Courts cannot be sustained in law and, therefore, overruled. Consequently, these criminal appeals are disposed of with a direction to the Magistrates concerned to proceed accordingly.” (emphasis supplied)

These decisions completely answer the contention of the counsel for the petitioner. In case of Sharat Babu Digumarti vs. Govt. of NCT of Delhi (supra), the facts were different. It is the case in which the Magistrate had taken cognizance against the Director of a company for offences punishable under Sections 292 and 294 of IPC and Section 67 of IT Act. It was in such background, the Supreme Court was of the view that Section 67 read with Section 67A and 67B of the IT Act were a complete code and for the same set of allegations, the provisions of Section 292 of IPC cannot be invoked.

As noted, Section 132 of SGST Act prescribes punishment for various acts and omissions under the said act such as non-deposit of tax in government revenue after collection from the purchasing dealers. On the other hand, Sections 406 and 409 of IPC deal with offence of criminal breach of trust. Section 405 of IPC defines the offence of criminal breach of trust by providing that “ whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits criminal breach of trust”. It can thus be seen that the offences punishable under Section 132 of CGST Act and those under Sections 406 and 409 of IPC operate in different fields. In a given case an act or omission on part of the dealer may form offence only under Section 132 of CGST Act. But, in a given case where the ingredients of Section 405 of IPC are satisfied, the action can as well amount to offences punishable under Sections 406 and 409 of IPC. However, a word of caution would not be misplaced. The tax administration of the State should not invoke IPC provisions without application of mind in every case. In the present case, however, no arguments are made on the basis that even if the allegations in the complaint are taken on the face value, offence of criminal breach of trust is not made out.


Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the authors whatsoever and the content is to be used strictly for educative purposes only.

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February 2024