Karnataka HC refuses to quash tax evasion case against bookies operating at Bangalore Turf Club

By: Admin
May 11, 2024
Categories: Income Tax|Income Tax News
4 Min Read

The Karnataka High Court recently refused to quash a case involving alleged tax evasion by bookies operating at the Bangalore Turf Club, saying that “the material collected by the investigation officer during the course of investigation prima facie make out a cognizable offence”.

A bench of Justice S Vishwajith Shetty passed the order on April 30 in response to a petition filed by the bookies.

In January this year, a case was registered under the Karnataka Police Act, the Indian Penal Code (IPC) and Karnataka Race Betting Act following a raid, which was done based on information that the bookies at the club were accepting bets without proper registration of the bets, resulting in evasion of payable taxes. A sum of Rs 3,45,74,040 was also seized during the raid.

The counsel for the bookies argued that they were licensed bookies and that the section dealing with cheating under the IPC did not fit the complaint and had only been invoked as other provisions were non-cognizable. It was also argued that even if the allegations were true, it was the competent Goods Services and Tax (GST) officers who had to take action.

The Advocate argued that the bookies had collected 25 per cent GST without issuing receipts and had not maintained any records for tax deducted at source (TDS). He also pointed out a large discrepancy between the reported bet amount and what the average amount should have been over a certain period, considering the amount that was seized.

The bench observed, “If the court is satisfied that allegations made and materials collected prima facie make out an offence, the court should normally not interfere with the investigation into the offence. In such situations, the investigating officer has not invoked the proper penal provisions…After investigation, based on the material collected, it is always open for the investigating agency to file a final report invoking the applicable penal provisions.”

The court concluded, “The allegations found in the first information [report] and the material collected by the investigation officer during the course of investigation prima facie make out a cognizable offence. The allegations against the accused is of very serious nature and the accused, amongst other allegations, allegedly have misappropriated crores of money collected by them towards payment of GST and TDS.”

The petition of the bookies was subsequently dismissed.

Source from: https://indianexpress.com/article/cities/bangalore/karnataka-hc-tax-evasion-case-bookies-turf-club-9319730/