Facts of the Case

This is a national-security/anti-terrorism prosecution, not a GST law case. Mrityunjay Kumar Singh @ Sonu Singh, a partner in the road-construction firm M/s Santosh Construction, was arrayed as Accused No. 8 in NIA Special Case No. 02 of 2020, arising from a 2019 attack in Chandwa, Latehar, in which cadres of the banned CPI (Maoist) organisation killed four police personnel and looted arms. The National Investigation Agency alleged the appellant had, over several years (2012-2019), paid substantial 'levy' amounts to a Maoist Regional Commander, including Rs. 12 lakh linked to a road-construction contract, and that unaccounted cash of over Rs. 2.64 crore was recovered from his premises. During investigation, the NIA sought his firm's books of account and details of materials purchased from unregistered GST suppliers, which the firm failed to produce — cited by the NIA as evidence that the firm deliberately avoided maintaining digital records to conceal its dealings. Two connected appeals challenged (i) rejection of his discharge application under Section 227 Cr.P.C., and (ii) the subsequent framing of charges under the Unlawful Activities (Prevention) Act, 1967 and IPC conspiracy provisions.

Issues Involved

  1. Whether there was sufficient material to reject the appellant's discharge application under Section 227 Cr.P.C.
  2. Whether the ingredients of the UAPA offences (Sections 10, 13, 17, 18, 39, 40) and IPC Sections 120B/121/121A were made out for framing of charge.
  3. Whether payments allegedly made under compulsion (levy/extortion) could be treated as funding a terrorist organisation with the requisite mens rea.

Petitioner's Arguments

  • No allegation of conspiracy in relation to the actual attack on police personnel was made against the appellant; the only allegation was payment of levy demanded by the proscribed group.
  • None of the ingredients of Sections 10, 13, 17, 18, 39 or 40 of the UAPA were satisfied, since the appellant never raised funds for terrorist activity — he was himself subjected to extortion and paid under coercion to protect his life and business.
  • Since raising funds under Section 17 requires mens rea, and the appellant's payments were coerced rather than voluntary, the discharge application ought to have been allowed.

Respondent's Arguments

  • The NIA's investigation showed the appellant was closely and repeatedly in touch with the Maoist Regional Commander over several years, provided both funds and logistics support, and met the commander the day before the attack to negotiate and pay levy.
  • Unaccounted cash of over Rs. 2.64 crore was recovered from the appellant's premises, disproportionate to his and his firm's disclosed income, and several claimed lenders denied having advanced any money.
  • The firm's books were not properly maintained, and materials were shown as purchased from unregistered GST suppliers with only handwritten records, consistent with an intent to conceal transactions and the true source of funds.
  • The appellant had close and repeated links with the Maoist commander spanning years, unlike an isolated instance of extortion, and never reported any extortion by CPI (Maoist) despite complaining against rival factions — indicating collusion rather than coercion.

Court Order / Findings

  • The Court extensively reviewed Supreme Court precedent on the scope of Sections 227/228 Cr.P.C., holding that at the discharge/charge-framing stage only a prima facie case and 'grave suspicion' need be shown — not proof beyond reasonable doubt, and no mini-trial is permissible.
  • Applying that standard, the Court held the cumulative material — repeated payments over years, the pre-attack meeting with the Maoist commander, disproportionate unaccounted cash, and financial irregularities including reliance on materials from unregistered GST suppliers without proper records — disclosed sufficient prima facie material to frame charges.
  • The reference to purchases from unregistered GST suppliers was treated only as one indicator, among several, of the firm's practice of concealing transactions — the Court did not examine or rule on any GST registration requirement as such.
  • Both the appeal against rejection of discharge (Cr. Appeal No. 356/2023) and the appeal against framing of charges (Cr. Appeal No. 666/2023) were dismissed.

Important Clarification

Despite the passing reference to 'unregistered GST suppliers', this judgment is not a GST law ruling and creates no GST compliance obligation or interpretation. The mention is significant only as one piece of circumstantial evidence in a terror-financing prosecution regarding concealment of financial dealings — it says nothing about the legal consequences of purchasing from an unregistered GST supplier in an ordinary commercial context.

Sections Involved

  • Sections 10, 13, 17, 18, 39 and 40 of the Unlawful Activities (Prevention) Act, 1967 — the terror-financing and support offences charged.
  • Sections 120B, 121 and 121A of the Indian Penal Code, 1860 — criminal conspiracy and waging war against the Government of India.
  • Sections 227 and 228 of the Code of Criminal Procedure, 1973 — discharge and framing of charge, the central procedural provisions discussed.
  • Section 21 of the National Investigation Agency Act, 2008 — appeal provision under which the appeals were filed.
  • Purchases from unregistered suppliers under the Central Goods and Services Tax Act, 2017 were cited only as evidentiary detail, without any GST law adjudication.

Decision – In Favour of

Decided in favour of the prosecution (Union of India through the NIA) — both appeals were dismissed, and the rejection of discharge and the framing of UAPA/IPC charges against the appellant were upheld.

Case Details

Court: High Court of Jharkhand at Ranchi
Case No.: Cr. Appeal (DB) No. 356 of 2023 with Cr. Appeal (DB) No. 666 of 2023
Coram: Hon'ble Justices Sujit Narayan Prasad and Subhash Chand
Date of Order: 18 May 2023

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