2021 (2) TMI 503 - HC - GST

Jurisdiction - once an investigation into the alleged illegal functioning of the companies has started and is being carried out by one agency which is DGGI, Headquarter, even if the other zonal agencies have jurisdiction all over the India, should investigations be carried out for different quarters by different agencies? - fake input uax credit - issuance of fake invoices - HELD THAT - This Court deems it fit to direct the petitioners to join the investigation till the next date of hearing before the respondent No.1 on notices being issued. In the meantime, no coercive action will be taken against the petitioners. List the petition for consideration on 25th March, 2021.

Summary

Issues:
1. Alleged GST evasion by petitioners' companies.
2. Jurisdictional conflict between DGGI Headquarters and DGGI Meerut Zone for investigation.
3. Petitioners' grievance regarding multiple agencies investigating different quarters.
4. Bail cancellation application pending consideration.
5. Coercive action against petitioners.

Analysis:
1. The petitioners' companies were registered under GST and were accused of receiving fake invoices and availing Input Tax Credit unlawfully. They were arrested for offenses under the CGST Act based on a search conducted by the DGGI Headquarters. Subsequently, the DGGI Meerut Zone initiated a separate investigation into GST evasion by the companies for a different period, leading to the petitioners' grievance of facing multiple investigations by different agencies.

2. The central issue raised was whether different agencies should investigate the petitioners for different quarters when one agency, the DGGI Headquarters, had already started the investigation. The concern was that such multiple investigations could prejudice the petitioners' case. The court considered the jurisdictional conflict between the DGGI Headquarters and the DGGI Meerut Zone in conducting investigations into the alleged offenses committed by the petitioners.

3. The court directed the petitioners to cooperate with the investigation by the DGGI Meerut Zone until the next hearing date. It was emphasized that no coercive action should be taken against the petitioners during this period. The order was scheduled for further consideration on 25th March 2021, and it was instructed to be uploaded on the court's website for public access.

4. Additionally, the court noted that a bail cancellation application against the petitioners was pending before the Chief Metropolitan Magistrate. The court did not delve into the specifics of the bail cancellation application but acknowledged its existence as part of the overall context of the case.

5. Overall, the judgment addressed the complexities arising from multiple agencies investigating the petitioners for different periods and sought to balance the investigative process while safeguarding the petitioners' rights by ensuring no coercive action was taken until further court proceedings.