Prosecution under the GST Act, 2017
Prosecution means the act of officially accusing someone of committing an illegal act, especially by bringing a case against that person in a court of law. Section 132 of CGST Act, 2017 codifies the offences
under the Act which warrant institution of criminal proceedings and prosecution.
CBIC to assuage industry’s fear concerning the improper and haste prosecution under GST for specified
offences by revenue officers has issued a guideline (Instruction No. 04/2022-23) laying down the procedure to followed for any kind of prosecution.
Pre-requisite of initiating prosecution
- Availability of the evidence – Even in the cases where the demand has been confirmed however, as the standard of proof required in a criminal prosecution is higher. Case has to be established beyond reasonable doubt and hence, evidence will be weighed higher in the process of prosecution.
- Sanction of prosecution – Should be obtained from Pr. Commissioner / Commissioner or Pr. Add. Director General / Add. Director General of DGGI.
- In the case of public limited companies, the prosecution should be launched against the person who is involved in the day-to-day activity of the Company or actively committing tax evasion.
- The amount involved in offenses is more than five hundred lakh rupees. However, this limit is not applicable if the person is a habitual evader or is an arrest case under Section 69 of CGST Act, 2017.
Caution points
- Prosecution should not be initiated
- only because the demand has been confirmed in adjudicating proceedings; or
- if additional tax claims arise due to a difference in opinion in the interpretation of the law.
Publication of names of the people convicted
Pr. Commissioner / Commissioner has the power to publish name and other particular of the person
convicted under the act.
Transitional Provision
All the prosecution should be in accordance to the provision of these instructions. Any prosecution which
is sanctioned but not yet filed, should be reviewed by the sanctioning authority for the provision of these
instructions.
Aditi Mittal, Associate-Indirect Tax, SW India
