Gujarat High Court says no parallel proceedings permitted on GST under Centre and State Acts

Gujarat High Court says no parallel proceedings permitted on GST under Centre and State Acts

High Court stays proceedings initiated on the complaints, stating it would amount to double jeopardy in violation of Article 21 of the Constitution of India.

In this case, Rajesh Mundra (the petitioner) filed a Writ Petition under Article 226 of the Constitution read with Section 482 of the Code of Criminal Procedure, 1973, before the High Court of Gujarat (HC). He sought to quash the criminal complaint against him filed on 11 June 2020by the Centre and the State GST Departments (the defendants) for committing an offence under Section 132(1) (b) and 132 (1) (c) of the Central Goods and Services Tax Act, 2017 (CGST Act).

The petitioner contended two criminal complained had been filed against him on the same facts by the defendants; hence it is a case of double jeopardy. He further stated that the State GST Department had registered a complaint under Section 132 of Gujarat GST Act, 2017 and the Petitioner was arrested and released on bail.

The Central GST Department registered another criminal complaint under the same provisions of the GST Act, 2017, for a bogus input tax credit. The petitioner was again arrested and released on bail; he then filed a writ petition before the HC.

He contended a second complaint filed by the Central GST Department based on the same facts as the previous complaint filed by the State GST Department would amount to double jeopardy.

He further challenged the validity of two parallel investigations carried out by the Centre and State GST Departments that was based on the same facts regarding Section (2) (b) of the Goods and Services Tax Act, 2017 and under the notification vide D.O.F. No. CBEC/20/43/01/2017-GST (Pt.) of 5 October2018, issued by the Central Board of Indirect Taxes and Customs.

The HC examined the issues that the second arrest of the petitioner by the Central GST department is illegal, and it is in violation of Section 69 of the Central Goods and Services Tax Act, 2017. It also analyzed the instant matter in the light of the scope of Article 21 of the Constitution of India.

It concluded that the contention made by the petition is valid and it issued a notice for granting interim relief to the petitioner. It further directed that no parallel proceeding shall be taken on the complained filed by the Central GST Department. It stated that this is a case of double jeopardy and hence in violation of Article 21 of the Constitution.