2026-VIL-602-ALH
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SGST High Court Cases

GST – Proceedings for delayed or non-deposit of GST amount - BNS, 2023 vs. CGST/SGST Act, 2017 - Invocation of General Penal provisions under Bharatiya Nyaya Sanhita without resort to special statute providing exhaustive mechanism – The applicant was accused of delayed/non-deposit of GST/TDS amount deducted from payments made in relation to execution of Gram Sabha development works - Whether the authorities can legally initiate criminal prosecution by invoking the penal provisions of Bharatiya Nyaya Sanhita without invoking the penal provisions and mandatory statutory procedure prescribed under the GST Act, which is a special statute providing a complete mechanism for adjudication, penalty and prosecution – HELD – The CGST/SGST Act, 2017 is a complete and self-contained special statute providing comprehensive machinery relating to deduction of tax, assessment, adjudication, penalty and prosecution. Sections 50, 51, 122, 126 and 138 of the GST Act unmistakably demonstrate that the legislature has consciously created a complete code to deal with all contingencies arising out of non-deduction, short deduction, delayed deposit or non-deposit of GST amount, including determination of liability, imposition of interest, levy of penalty, prosecution and compounding of offences. Once the field is specifically occupied by a special statute providing an exhaustive mechanism, resort to the provisions of general penal law can be justified only where the allegations independently disclose essential ingredients of distinct criminal offences such as dishonest misappropriation, forgery, fabrication of records, cheating or wrongful gain - In the present case, the allegation against the applicant is confined only to delayed/non-deposit of GST/TDS amount, with no allegation of embezzlement, dishonest misappropriation, siphoning of money, fabrication or manipulation of records, fake transactions, forged documents or wrongful gain. The material brought on record indicates that the amount allegedly not deposited was subsequently deposited in the government account. Thus, the allegations squarely fall within the statutory framework of the GST Act and not within the ambit of general penal provisions - Initiation of criminal prosecution under general penal law, without resorting to the statutory mechanism prescribed under the GST Act is legally unsustainable - The impugned charge sheet and cognizance/summoning order and proceedings are quashed. However, the order does not preclude authorities concerned to proceed against the applicant under the UPGST Act, 2017 – The application is allowed
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