PROSECUTION UNDER GST: ANALYSIS OF INST 04/22-23 DT 1ST SEPT 2022

In this Video CA Vivek Jalan discussed about the matter of GST ARRESTS & PROSECUTION: Analysis if Inst 04/22-23 dated 1st September 2022. The topic discussed on the video are listed below.

Possible Time of Prosecution Initiation

1. On the basis of Decision in the case of Radheshyam Kejriwal [2011 (266) ELT 294 (SC) - 2011-VIL-115-SC-CU], prosecution can be launched DURING ADJUDICATION or at the earliest post adjudication where the QUALITY EVIDENCE is available

2. Prosecution can be filed even if taxpayer has gone in APPEAL/REVISION – Parallel files should be maintained

Sec 132: Offenses for initiating prosecution

1. Supplied goods/services without an invoice - Eg, Supplies in grey market

2. Issues invoice without supply of goods/services - Eg. Circular transaction

3. Avails ITC fraudulently or without receipt of goods/services – Eg. Fake invoice cases

4. Collects GST but fails to pay to Govt. – Eg. shows GST on tax invoice but does not make challan

1/2/3/4 - cognizable and non-bailable

5/6. Evades Tax or falsifies accounts for evasion of tax – Eg. Falsifies bills

7. Obstructs officers on duty - Eg. Threatens officers on a visit

8. Deals with goods/services liable for confiscation/evasion – Eg. Transporters transporting goods liable to confiscation; misclassification of services

9. Tampers with documents Eg. Tampers with a purchase bill

10. Fails to supply information Eg. Nonadherence to Summons

Punishment –

1. Tax evaded is greater than 5 Crs – 5 yrs + Fine (cognizable and non-bailable)

2. Tax evaded = 2Crs - 5 Crs – 3 yrs + Fine

3. Tax evaded = 1Crs - 2 Crs – 3 yrs + Fine

4. 5/6/7/9 – 6 months + Fine

5. Subsequent offence - 5 Crs – 5 yrs + Fine

6. Sanction of Commissioner/ ADG Investigation (Zones) – Mandatory

7. Normally prosecution should be launched for Type ‘1’ cases above other than-

a. Habitual evaders - 2 cases in 2 yrs of more than Rs. 5 Crs

b. Arrests during investigation

Sanction of Prosecution

1. Quality of Evidence collected – Should be Carefully assesses

2. No prosecution MERELY incase –

a. Mens-Rhea MOST CRITICAL Eg. Just because L3 supplier’s registration is cancelled, mens rhea of L2 or even L1 recipient cannot be proved

b. Even incase mens rhea is proved – It cannot be on EVERY DIRECTOR – Eg. Non Executive Director

c. Demand is confirmed Eg. 2B/3B difference

d. Cases of Technical nature Eg. Classification dispute

e. Difference of opinion Eg. ITC available/not available on Purchase Register/ Reversal, etc

3. Prosecution compliant/ Investigation Report should be filed within 60 days of arrest/no bail cases in format in Ann I before a Court

4. In cases of Company, prosecution can be launched against director/ Manager/Secretary/any other officer involved

5. Appeal can be filed against order of the court OR Withdrawal of the case should be made by “Prosecution Cell’s” recommendation in Commissionerate/DGGI

6. Sec 159 – Names of persons “convicted” would be published

7. Opportunity of Compounding u/s 138 should be given to the accused

8. Senior officers should take ‘personal’ interest in prosecution cases.

Link to Read Instruction - https://taxguru.in/goods-and-service-tax/guidelines-launching-prosecution-cgst-act-2017.html

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Видео PROSECUTION UNDER GST: ANALYSIS OF INST 04/22-23 DT 1ST SEPT 2022 канала Taxguru