The Punjab & Haryana High Court quashed the First Information Report (FIR) against the person accused of issuing bogus invoices and misusing the Value Added Tax (VAT) registration number.
Justice Manjari Nehru Kaul stated that Section 57 of the VAT Act provides for imposition of penalty for issuance of false invoice. Section 58 of the VAT Act provides for imposition of penalty for using a false registration number. The provisions leaves no manner of doubt that the allegations levelled in the FIR in question are squarely covered and fall under the exclusive purview of the VAT Act.
BACKGROUND
The FIR was lodged against the petitioner. The FIR contained the charges related to evading VAT evasion, however, since the Punjab VAT Act, 2005.
The petitioner contended that VAT is a complete code in itself and operates in exclusion to the general law including the IPC, no FIR could have been registered against the petitioner. However, the State has tried to give a criminal complexion to the alleged Tax evasion, to bring the same within the ambit of the IPC.
The respondent department stated that the petitioner allegedly issuing bogus invoices and misused the VAT registration (TIN) number assigned to him and thus committed forgery and fraud. The petitioner had made bogus purchases as a result of which the State exchequer had incurred losses to the tune of `2,44,73,487/-.
JUDGEMENT
The court ruled that the VAT Act is a complete Code in itself and there is no provision provided in the Act for the registration of an FIR. The Act only provides for imposition of penalty in case there is any contravention of its provisions. Since the Act is a special law, principle of generalia specialibus non derogant would apply, meaning thereby, it would operate in exclusion to the general law i.e. the IPC.
The court said the provisions of the VAT Act are sufficient and equipped to deal with the matter where an attempt is made to evade the Tax and the registration of FIR in such a matter is totally an abuse of the process of law.
“This Court has no hesitation to hold that continuation of criminal proceedings arising out of the FIR would be nothing but an abuse of process of the process of law. Accordingly, the instant petition is allowed and the FIR in question along with all consequential proceedings arising therefrom is quashed,” the court stated.
Case Title: Ashwani Kumar Versus State Of Punjab
Citation: CRM-M-23662-2016