Introduction:

Presently Goods and Services Tax (GST) is an indirect tax for the whole country. This tax policy helps to smoothen transactions between the states and also among the other nations. But offences like tax evasion, fraud, forgery etc. are still present. To prevent from that offences government imposed some laws and penalties.

Being a destination based, transaction wise tax, GST, ropes in strict compliance procedures for all the taxpayers or people falling under the gamut of the same. To have a crystal clear movement of goods intra-state or inter-state, reduce corruption and efficient tax collection system, GST defines strict penalty rules and offenses guidelines, which the taxpayers have to follow.

Some of the offences have been identified under the GST regimes which are:

1. Goods without proper invoices or issued with false information.
2. Uses GSTIN of another person.
3. False information in filling of return.
4. Submits false information in GST registration.
5. Commits fraud in filling of return.
6. Claims refund by providing wrong information or by committing fraud.
7. Claims Input Tax Credit without the actual receipt of goods or services.
8. Does not maintain proper accounts in their books etc.

IPC Sections used in GST law:

1. Section 120A and 120B

As per Section 120A:- An act which is done by 2 or more than 2 persons agrees to do an illegal act is known as criminal conspiracy. In Section 120B punishment for criminal conspiracy is provided.

In GST if a group of 2 or more than 2 persons agrees to commit an illegal act like tax evasion, fraud etc. they are held liable under the act of criminal conspiracy.

2. Sections 463 to 468

These sections 463-Forgery, 464-Making a false document to forgery, 465-Punishment for forgery, 466-Forgery of record of court or of public register, 467-Forgery of valuable security and 468-Forgery for purpose of cheating are offences relating to documents.

Under GST documents plays a vital role whether in filling returns or in claiming refund. In every area document is required. So when there is a forgery related to the documents, they committed an offence under these sections.

CRPC Sections used in GST law:

1. Section 46

This section deals with how arrest is made. Section 69 of CGST Act has power to arrest a person by an order of commissioner when he believes that a person has committed any offence specified in clause (a), clause (b), clause (c) and clause (d) of sub section 1 of section 132 which is punishable under sub clause 2 of same section.

2. Section 67

This section states that if summon is issued outside the local authority, a duplicate copy of that summon should be send to the magistrate of that outside authority to serve that summon. Under GST same is applicable if a person resides out of the authority of that local body.

3. Section 165

This section deals with search by the police officer. Section 67 of the CGST Act defines that an officer not below the rank of joint commissioner can authorize in writing an inspection or search.

4. Section 436

This section deals with in what cases/offences bail should be granted. The offences are of two types bailable and non-bailable. Bailable offences are those n which bail is granted to the person but non-bailable offences are those in which bail is not granted to the person. Same under the CGST Act some offences are the bailable and non-bailable.

Inspection, Search and Seizure:

Where the Joint Commissioner CGST/SGST has sufficient reason to believe that a taxable person is deliberately suppressing transaction to evade taxes or has claimed excessive Input Tax Credit, then he can order an officer of GST to inspect the locations of such person.

Similarly, the Joint Commissioner can order for search and seizure within the premises of a taxable person when he has sufficient reason to believe that there are goods, which should be confiscated or some important documents are being hidden somewhere.

Appeals in GST:

A person who is aggrieved by a decision or order passed against him by an adjudicating authority, can file an appeal to the Appellate Authority. It is important to note that it is only the aggrieved person who can file the appeal. Also, the appeal must be against a decision or order passed under the Act.

It is to be noted that no appeals whatsoever can be filed against the following orders:

1. An order of the Commissioner or other authority empowered to direct transfer of proceedings from one officer to another officer;
2. An order pertaining to the seizure or retention of books of account, register and other documents; or
3. An order sanctioning prosecution under the Act; or
4. An order passed under section 80 (payment of tax in installments).

The time limit for the party to file an appeal before the adjudicating authority is 3 months from the date of communication of the impugned order. But the adjudicating authority may condone a delay of up to one month, if he is satisfied that there was sufficient cause for such delay.

The adjudicating authority has to follow the principles of natural justice – such as hearing the appellant, allowing reasonable adjournments (not more than 3), permitting additional grounds (if found reasonable), etc. The adjudicating authority can also make such further inquiry as may be necessary.

On conclusion of the appeal process, the adjudicating authority will pass his order (Order-in-Appeal) which may confirm, modify or annul the decision or order appealed against but shall not refer the case back to the authority that passed the said decision or order.

Conclusion:

The GST regime has brought in a tougher and stricter compliance diaphragm, which every person has to follow religiously. Any sort of non-compliance can have a severe effect on the daily business of the taxpayer and can attract huge amounts of interest and penalties. If the offenses are grievous in nature, it can lead to holding criminal proceedings against the offenders.

Therefore, even if you are unintentionally avoiding paying taxes or short deducting taxes wherever applicable, you will still be served a notice from the relevant authority. Moreover, the right to appeal is only invoked when a specific sum of money is deposited beforehand with the repository, which will block your working capital until the appeal is completed.

Thus it is advised to have a proper accounting system that can enable you to reconcile and file proper returns within due dates and make payment of taxes.

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