Page 70 - GSTL_30th April 2020_Vol 35_Part 5

556 GST LAW TIMES [ Vol. 35
conclusive, the prosecution cannot be allowed to stand. Judgments of this
Court are not to be read as statute and when viewed from that angle there
does not seem any conflict between the two sets of decisions. It will not
make any difference on principle that latter judgments pertain to cases un-
der the Income-tax Act. The ratio which can be culled out from these deci-
sions can broadly be stated as follows :-
(i) Adjudication proceeding and criminal prosecution can be
launched simultaneously;
(ii) Decision in adjudication proceeding is not necessary before in-
itiating criminal prosecution;
(iii) Adjudication proceeding and criminal proceeding are inde-
pendent in nature to each other;
(iv) The finding against the person facing prosecution in the adju-
dication proceeding is not binding on the proceeding for crim-
inal prosecution;
(v) Adjudication proceeding by the Enforcement Directorate is
not prosecution by a competent court of law to attract the pro-
visions of Article 20(2) of the Constitution or Section 300 of the
Code of Criminal Procedure;
(vi) The finding in the adjudication proceeding in favour of the
person facing trial for identical violation will depend upon the
nature of finding. If the exoneration in adjudication proceed-
ing is on technical ground and not on merit, prosecution may
continue; and
(vii) In case of exoneration, however, on merits where allegation is
found to be not sustainable at all and person held innocent,
criminal prosecution on the same set of facts and circumstanc-
es cannot be allowed to continue underlying principle being
the higher standard of proof in criminal cases.
In our opinion, therefore, the yardstick would be to judge as to whether al-
legation in the adjudication proceeding as well as proceeding for prosecu-
tion is identical and the exoneration of the person concerned in the adjudi-
cation proceeding is on merits. In case it is found on merit that there is no
contravention of the provisions of the Act in the adjudication proceeding,
the trial of the person concerned shall be in abuse of the process of the
court.
46. A Learned Single Judge of the Bombay High Court had the occasion to
consider this question in a case under the Foreign Exchange Regulation Act
in Criminal Application No. 1070 of 1999 (Hemendra M. Kothari v. Shri W.S.
Vaigankar, Assistant Director, Enforcement Directorate (FERA), Govt. of India
and State of Maharashtra), decided on 25-4-2007 and on a review of large
number of decisions of this Court and other courts it came to the following
conclusion :-
“21. It may be noted that in the present case the applicant was exon-
erated by the Dy. Director of Enforcement, who was adjudicating au-
thority, in the adjudication proceedings. Admittedly that order was
not challenged in appeal by the respondent and thus that order has
become final. I have already noted the facts and findings of the adju-
dicating authority in detail. The adjudicating authority had clearly
come to the conclusion that there was no material to hold the present
applicant guilty for contravention of the provisions of FERA and he
was completely exonerated. When in the departmental proceedings
before the adjudicating authority, the department could not establish
the charges, it is difficult to imagine how the department could prove
the same charges before the criminal Court when the standard of
proof may be much higher and stringent than the standard of proof
required in departmental proceedings.”
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