The Bombay High Court, Aurangabad Bench recently observed that white-collar offences are more serious than offences involving bodily harm, given that they involve an element of conspiracy.
The Court made the observation while dismissing pleas filed by the directors of Ganraj Ispat Private Limited for quashing criminal proceedings against them on allegations that they committed fraud under the Central Goods and Services Tax Act.
A Bench of Justices TV Nalawade and MG Sewlikar reasoned that the earlier interim order passed earlier in the matter virtually prevented the tax department from exercising their powers, including the issuing of summons which indirectly got the petitioners the relief of anticipatory bail.
The Court proceeded to underscore,
“… white collar offences are more serious than offences like murder, dacoity etc. Such offences are committed after hatching conspiracy. This circumstance needs to be kept in mind by Court as the granting of relief of anticipatory bail hampers investigation and such approach causes damage to the image of judiciary.”
Through individual pleas, the directors had contended that the GST liabilities imposed upon by them by the Chief Commissioner of the Central Goods and Services Tax were on a wrong conception and without following provisions of the Code of Criminal Procedure.
Senior Advocate MD Adkar submitted that the GST liabilities of about Rs 84 lakhs had been deposited with the Directorate-General of GST Intelligence under protest, so that they can challenge such liability imposed.
The tax department, however, asserted that the petitions were misconceived. The Department submitted that following investigation into another company, it was revealed that fake records of false invoices for input tax credit were issued to Ganraj Ispat for an amount of over Rs. 5.5 crore for which GST of Rs. 84 lakhs was recoverable.
In turn, the Court found that:
- There was admission by the petitioners of having created a record of false invoices for input tax credit by deceiving the authority.
- Upon seizure of the records of the company, the directors voluntarily deposited the penalty amount and not under protest.
Therefore, the Court concluded that there was material to make out a prima facie case of fraud against the petitioners.
Relying upon the provisions and scheme under the CGST Act, the Court observed that in cases like the present one, both the adjudication and prosecution start simultaneously and, therefore, the special CGST Act will apply over the CrPC.
The Bench also noted that instead of moving the High Court in November 2020, immediately after the search and seizure, the petitioners chose to move the vacation court in December.
The Court further refused to accept the argument of the petitioner that its chief consultant was infected due to COVID-19 and imposed costs amounting to Rs. 25,000 per petitioner to be deposited in the Court within 4 weeks from the order date. The amount will thereafter be issued to the Respondents to cover the cost of the present litigation, the Bench added.