Punjab & Haryana HC Rules on Supremacy of GST Act over IPC in Tax Fraud Cases

In a landmark judgment concerning the interplay between general criminal laws and special taxation statutes, the Punjab and Haryana High Court has provided clarity on prosecuting Goods and Services Tax (GST) offences. The High Court, in the case of Sushil Kumar Singla Vs State of UT Chandigarh, held that when a special statute like the GST Act contains a comprehensive mechanism for investigation, penalty, and prosecution, parallel proceedings under the Indian Penal Code (IPC) for the same alleged acts are impermissible.

The Court quashed the FIR and consequential proceedings against the petitioner, emphasizing that the continuation of such proceedings would amount to an abuse of the process of law and double jeopardy.

Factual Matrix of the Case

The legal controversy originated from an FIR registered in December 2019. The prosecution initiated criminal proceedings under various sections of the IPC, including cheating and forgery, against an entity known as M/s A.K. Trading Company.

Allegations by the Prosecution

The complaint was filed by an Excise & Taxation Officer, alleging that the proprietor of the firm, Ms. Anuradha, in collusion with associates, had secured GST registration under the UTGST Act 2017, CGST Act 2017, and IGST Act 2017 through fraudulent means.