The Madhya Pradesh High Court has refused to quash the FIR against a businessman involved in Rs. 2022 Crores GST Evasion and money laundering.
The bench of Justice Vivek Rusia and Justice Gajendra Singh has observed that vehicles used for clearance or removal of pan masala and tobacco had Dabang Dunia Press stickers and drivers of the vehicles were carrying media identity cards of Dabang Dunia Press. The FIR is registered under various sections of I.P.C. as the present petitioner has fabricated a large number of tax invoices to show on record vide circulation of Dabang Duniya. The GST evasion of Rs.500 crore is said to have been adjusted in the sale of Daband Duniya by showing the artificial sale of one lakh copies per day, whereas the actual sale was five to eight thousand.
The petitioner/assessee is a proprietor of M/s Elora Tobacco Company Limited (ETCL). ETCL is a company registered under the provisions of the Companies Act, of 1956 and engaged in the manufacturing of cigarettes, pan masala etc.
The DGGI, Bhopal, Zonal Unit through Indore initiated an investigation against ETCL in June 2020. The initial investigation revealed that ETCL was involved in clandestine manufacturing and clearance/supply of cigarettes and evaded the duty/tax of rupees 2000 crores from the period July 2017 to June, 2020.
Kishore Wadhwani Syndicate through Associates Managing Firm found involved in the evasion of 420 crores of GST. He was arrested on 15.06.2020 under Section 69 of the CGST Act for committing the offence specified under Section 132(1)(a).
The two separate show-cause notices were issued in respect of evasion of central excise duty and GST by the Additional Director, DGGI Bhopal Unit for demand of GST amounting to Rs.1946.23 crore and another show-cause was issued for the demand of central excise duty amounting to Rs.76.68 crore.
During the initial stage of the investigation, it was also revealed that vehicles used for clearance or removal of pan masala and tobacco had Dabang Dunia Press stickers and drivers of the vehicles were carrying media identity cards of Dabang Dunia Press. Kishore Wadhwani is also a Director of M/s Dabang Dunia Publication Private Limited.
The GST authorities collected 904 invoices in respect of the fraudulent advertisements which said to have been published in Dainik Dabang Dunia and when all were matched with the soft copy of Dabang Dunia Newspaper no such advertisement was found in the soft copy published during the period April, 2016 to January, 2020.
The petitioner was found involved in such acts of fraud, forgery, cheating and conspiracy in association with his nephew Mr. Nitish Wadhwani. The GST official has handed over all these materials with a written complaint to the Police Station – Tukoganj.
The petitioner was laundering the elicit money obtained from nexus of clandestine removal and supply of cigarettes where tax evasion was of 2022 cr. He was trying to launder the money through a media house business showing fake circulation of newspapers and fake advertisement revenue in such newspapers. An FIR was registered against him by DGGI Indore RU for forgery, cheating, criminal conspiracy etc under IPC provisions.
The petitioner went to High Court claiming that when the petitioner is arrested under CGST Act and GST offences are to be prosecuted under CGST Act. Hence, an additional FIR under IPC provisions cannot be launched against him, citing double jeopardy. He also challenged the vires of section 132(6).
The petitioner contended that why Section 132(6) of the CGST Act is liable to be declared unconstitutional. The provision only puts an embargo on the registration of complaints without permission from the Commissioner. This provision is in favour of the person protecting him from registration of a false complaint without approval from the Commissioner CGST, therefore, this provision cannot be held ultra vires.
The respondent/State objected that during the investigation, the Investigating Officer has collected 904 tax invoices. The statements of some of the people have been recorded in which they denied their signature on the receipts and that they did not make huge payments for advertisement in the Dabang Dunia Newspaper. In this case, the police are only investigating concerning forgery and cheating on the premises of Dabang Dunia Press by these two accused persons, not under the GST. The Investigating Officer has recorded the statement of Admin. Gurukul Vidyalaya, Indore has categorically stated that no such advertisement was given to Dabang Dunia Press for publication in the newspaper. The invoice in the name of Gurukul Vidyalaya to the tune of Rs.2,40,00,000/- is fake. The investigation is going on by the police, the allegations are serious in nature, hence at this Writ Petition filed in the nature of M.Cr.C. may be dismissed.
The court dismissed the petition and held that a large number of forged invoices have been found related to so-called private persons and companies who gave advertisements to the petitioner’s newspaper are worth crores of rupees and it is being very difficult to contact each of them as most of them are fake.
“However, whatever the case may be, let the investigation be completed within two months and the final report be prepared positively,” the court said.
The preparation of the case was done by Mr. Rajendra Meena, Additional DG, GST Intelligence, Bhopal Unit, Mr. Dhiraj More, Deputy Director, GST Intelligence, the case was argued on behalf of Revenue by Mr. Prasanna Prasad, Senior CGSC.
Case Details
Case Title: Kishore Wadhwani Versus The State Of Madhya Pradesh And Others
Case No.: Writ Petition No. 40019 Of 2024
Date: 13.03.2025
Counsel For Petitioner: Abhinav Malhotra
Counsel For Respondent: Amit Rawal
