P&H High Court Declines To Interfere With Non-Bailalbe Warrant Issued By GST Authorities

 A division bench of Hon'ble Punjab and Haryana High Court consisting of Justice Rajan Gupta and Justice Karamjit Singh, has declined to pass interim orders staying non bailable warrant issued by competent authorities Central Goods and Services Tax Act, 2017.

The petitioner in his writ petition under article 226 and 227 of Constitution of India has challenged the vires of Section 69 and 132 of Central Goods and Services Tax Act, 2017 (hereinafter referred as 2017 Act). It is the case of petitioner that petitioner in the present case is engaged in business of trading, manufacturing and export of auto parts, tyres and textile articles for more than 30 years. The petitioner is Managing Director/Proprietor of three entities, all engaged in export of goods and prior to October, 2019 his collective annual turnover was more than Rs. 200 crores. More than 300 workers were working in the units of the petitioner.

In October, 2019 petitioner met with an accident and suffered major head and spine injuries and remained on bed for more than 5 months. Thereafter, due to nationwide lockdown units remained closed. Due to above reasons, at present all the units are lying closed but the petitioner is trying to revive his units which would give employment to more than 300 families.

The respondent in the present case has alleged the mis-use of Inputs Tax Credit and refund initiated an investigation against 3 firms. The respondent during the course of investigation arrested the partners and petitioner was directed to appear before the Superintendent of Police Amabla. However, the apprehension of the petitioner is that he may be taken into custody in case he appears before the concerned authority.

Thus, the petitioner has filed the writ petition challenging the vires of Sections 69 and 132 of Central Goods and Services Tax Act 2017. He has inter alia prayed for interim relief during the pendency of the writ petition as non bailable warrants have been issued against him.

 Counsel appearing for petitioner has relied upon the orders passed in CWP-13995-2020 titled as M/s. Stalwart Alloys India Pvt. Ltd. & Ors. Vs. Union of India and Ors. dated 09.09.2020 in support of his case and has raised issued particularly regarding powers of legislature to enact laws under Article 246-A of the Constitution of India. By making reference to Section 4, 5 and provisions of Chapter XII of the Cr. P.C. it was argued by the Counsel for the petitioner that an offence under CGST shall be investigated, inquired into tried and otherwise dealt with according to provisions of Cr. P.C subject to any provisions contrary in the CGST Act.

Counsel for the respondent on the other hand opposed the arguments raised by the petitioner and asserted that orders passed in M/s Stalwart Alloy's (supra) is of no help to the case of the petitioner. It was further asserted that the petitioner is trying to defeat the process initiated by the Investigating Agency, by adopting illegal methods. It was alleged that petitioner is trying to destroy the evidence in order to avoid rigors of Section 132 of the 2017 Act and referred to huge amount of GST evasion made by the petitioner.

The Division Bench taking in consideration fact that order declining interim relief by the Telangana High Court in P.V. Ramana Reddy vs. Union of India's case were upheld by Supreme Court of India and the SLP was dismissed on 27.05.2019 as well as order dated 29.05.2019 passed by  Supreme Court in Union of India vs. Sapna Jain concluded that petitioner is not entitled to interim relief.

The Division Bench while passing the order noticed that custodial interrogation is qualitatively more elicitation oriented than questioning a suspect who is well ensconded with a favorable order under Section 438 of the Code and without expressing final opinion held that interfering with the investigation at the this stage in the writ jurisdiction would not be warranted.

Accordingly, the prayer was declined and the main case has been fixed for 19.05.2021.