PROSECUTION:
Prosecution is the institution or commencement of legal proceeding; the process of exhibiting formal charges against the offender. Section 198 of the Criminal Procedure Code defines “prosecution” as the institution and carrying on of the legal proceedings against a person.
Section 73 of the Model GST Law codifies the major offences under the Act which warrant institution of criminal proceedings and prosecution. 12 such major offences have been listed as follows:
1) Making a supply without issuing an invoice or upon issuance of a false/incorrect invoice
2) Issuing an invoice without making supply
3) Not paying tax collected for a period exceeding 3 months
4) Not depositing any tax that has been collected in contravention of the Act for a period exceeding 3 months
5) Availing or utilizing credit of input tax without actual receipt of goods and/or services
6) Obtaining any fraudulent refund
7) Furnishing false information or falsification of financial records or furnishing of fake accounts/documents with intent to evade payment of tax
8) Obstructing or preventing any official in the discharge of his duty
9) Dealing with goods liable to confiscation i.e. receipt, supply, storage or transportation of goods liable to confiscation
10) Receiving/dealing with supply of services in contravention of the Act
11) Failing to supply any information required of him under the Act/Rules or supplying false information
12) Attempting to commit or abetting the commission of any of the above 11 offences.
The scheme of punishment provided in section 73(1) is as follows:
| Offence involving–
|
Punishment (Imprisonment extending to–) |
| Tax evaded exceeding Rs.250 lakh | 5 years and fine |
| Tax evaded between Rs.50 lakh and Rs.250 lakh
|
3 years and fine |
| Tax evaded between Rs.25 lakh and Rs.50 lakh
|
1 years and fine |
Section 73(2) provides that a second or any subsequent conviction for an offence in this section shall be punishable with imprisonment for a term that may extend to 5 years and a fine. However, no imprisonment for any of the offences shall be for a period less than six months.
Section 73(3) and 73(4) provide that:
• All offences where the evasion of tax is less than Rs.250 lakh shall be noncognizable and bailable,
• All offenceswhere the evasion of tax exceeds Rs.250 lakh shall be cognizable and non-bailable
• No person shall be prosecuted for any offence without the prior sanction of the designated authority.
In the context of GST Law, in the case of a cognizable offence an arrest can be made without an arrest warrant/FIR and in a bailable offence the bail can be granted, subject to conditions that may be set in this regard, after appropriate bail bond or surety by authority effecting arrest has been furnished. Bail is a matter of discretion in a non-bailable offence and can be granted only by the Court before which the offender has to be produced within 24 hours of arrest. Section 74 provides that no officer inferior to a First Class Magistrate shall be competent to conduct trial for any offence.
Section 75 presumes the existence of a state of mind (i.e. “culpable mental state” or mens rea) required to commit an offence if it cannot be committed without such a state of mind. While committing an act, a “culpable mental state” is a state of mind wherein
• the act is intentional,
• the act and its implications are understood and controllable
• the person committing the act was not coerced and even overcomes hurdles to the act committed
• the person believes or has reasons to believe that the act is contrary to law.
Section 76 provides that any statement made and signed by any person during the course of any proceeding before a gazetted officer of GST is to be relevant for proving its contents during prosecution for any offence if the Court considers it unreasonably difficult or impossible to examine the person making the said statement or the person is prevented by sufficient cause from testifying before the Court.