Supreme Court allows criminal trial in ₹10 crore GST misappropriation case to proceed.
SUPREME COURT ALLOWS CRIMINAL TRIAL TO CONTINUE IN FINANCIAL MISAPPROPRIATION CASE
| ASPECTS | DETAILS |
| Case Title | Daechang Seat Automotive Pvt. Ltd. through Hyeoksoo Son (Appellant) vs. Moon June Seok & Ors |
| Introduction | The case pertains to allegations of criminal breach of trust, conspiracy, and financial fraud involving wrongful GST credit claims and misappropriation of over ₹10 crores. |
| Factual Background | Daechang Seat Automotive Pvt. Ltd., a Korean-owned company, employed financial advisors who allegedly siphoned funds through fake GST liabilities. Investigations exposed connections between multiple accused and fraudulent entities like Terminus. |
| Legal Issues |
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| Applicable Law |
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| Analysis | The Supreme Court observed prima facie involvement of the respondent based on corroborative statements, financial trails, and suspicious organizational behavior. The court emphasized that veracity of claims must be evaluated in trial, not at pre-trial stage. |
| Conclusion | Supreme Court reversed High Court’s order quashing charges, reinstating proceedings for trial. It underlined that economic offences require judicial scrutiny and trials must follow due process. |
| Current Scenario | The matter is restored to the trial court in Bengaluru for further proceedings on 16 April 2025. The court reiterated safeguarding foreign investments while maintaining the principle of “innocent until proven guilty.” |
CASE SUMMARY – In this case, the Supreme Court of India reinstated criminal proceedings quashed by the Karnataka High Court in a high-stakes financial misappropriation case involving Daechang Seat Automotive Pvt. Ltd. The company accused its former CFO and other associates of fraudulently diverting ₹10.18 crores under the pretense of GST payments. The apex court held that the High Court erred in quashing the charges against a key accused based on preliminary evidence. Emphasizing due process and trial necessity, the court revived the case for trial before the III Additional Chief Metropolitan Magistrate, Bengaluru, reinforcing trust in judicial scrutiny for economic crimes.
“The rule of law must protect investments while upholding due process — innocent until proven guilty.”
SOURCE- SUPREME COURT OF INDIA
