Page 23 - GSTL_13th August 2020_Vol 39_Part 2

2020 ] PROSECUTION UNDER INDIRECT TAX LAWS IN INDIA J31

PROSECUTION UNDER INDIRECT TAX
LAWS IN INDIA
By
R.R. Kedge
ADVOCATE

The prosecution of tax offenders is not the main
objective of Indirect Tax Laws in India; the main objective
is to collect Indirect Tax revenues. However, prosecution
provisions are part of all Indirect Tax Laws and their pur-
pose is to deter tax evaders.
In India following are the main Union Indirect Tax Laws.
(a) Central Excise Act, 1944
(b) Customs Act, 1962
(c) Finance Act, 1994 pertaining to Service Tax
(d) GST, i.e., Central Goods and Services Tax Act, 2017.
In general, prosecution proceedings begin from the stage of arrest of the
person and continues till the end of trial. In India the procedure to prosecute the
person is governed by the Code of Criminal Procedure, 1973.
As per Section 4(1) of the Code of Criminal Procedure, 1973 (CrPC) all
offences under the Indian Penal Code, 1860 will be tried according to provisions
of CrPC. However, offences under the indirect tax laws are not offences under
IPC but are offences under the respective indirect tax laws. Section 4(2) of Code
of Criminal Procedure states that the offences under any other law will also be
tried as per provisions of Code of Criminal Procedure subject to any special pro-
visions under such Acts regulating the investigation and trial otherwise than the
provisions of Cr.P.C. The next question which arises as to what are those provi-
sions contained in above referred indirect tax laws which are different from those
in the Code of Criminal Procedure. The same are being examined herein under
the respective Acts as under.
Prosecution under Central Excise Act, 1944 and Customs Act, 1962 :
The reasons for discussing the provisions of Central Excise Act, 1944 and
Customs Act, 1962 together is because most of the provisions relating to prosecu-
tion in both these Acts are in pari materia with each other. There are two distinct
phases of the evolution of procedures of prosecution. One phase is that which
stood prior to the Apex Court’s judgment in the case of Om Prakash and Anr. v.
Union of India dated 30th September, 2011 [2011 (272) E.L.T. 321 (S.C.)] after the
amendments carried out in respect of prosecution provisions in both of the above
Acts.
Position prior to Supreme Court’s judgment in the case of Om Prakash v. Union of India -
2011 (272) E.L.T. 321 (S.C.) :
Section 104 of Customs Act, 1962 and Section 13 of Central Excise Act,
1944 empowered the Officers under the respective Acts to arrest the person. Sec-
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