Ripple Effect Of Decriminalization Under GST

Need for provisions with criminal liabilities in tax laws

The Legislature while introducing a statute puts in place certain safeguards for any possible violations. In most statutes, civil as well as criminal liabilities are provided for any breach. Civil liabilities would generally be in the nature of fines and penalties whereas criminal liabilities would be in the nature of prosecution, imprisonment and/ or penalties. Under tax laws as well, any breach resulting in civil liabilities is dealt by the revenue authorities whereas criminal liabilities are dealt by the criminal courts.

The sole purpose of putting criminal liabilities is to ensure strict compliance of tax laws and dissuade any dishonest act by the taxpayer. However, in some cases even the honest taxpayers suffer because of unintentional or minor breach of the provisions resulting in untoward fines and penalties or even prosecution. While ensuring compliance of the tax laws, it is also the duty of the