2021 (3) TMI 337 - HC - GST

Summons issued under Section 70 of the CGST Act, 2017 - Apprehension of arrest - writ applicant failed to produce the requisite documents relevant for the purpose of investigation on his second appearance before authority - HELD THAT - It appears on the basis of the materials on record that the only idea of preferring the two writ applications at the relevant point of time was to evade arrest. The apprehension on the part of the writ applicants at the relevant point of time was that if they would appear before the authority pursuant to the summons, then they would be arrested. As such, there is no good ground much less any legal ground to question the legality and validity of a summons issued under Section 70 of the Act, 2017. As such, as on date, both the writ applications could be said to have become infructuous. However, both the learned counsel vociferously submitted that the writ applicants have deposited a huge amount with the department and the adjudication with regard to their liability is yet to take place, and therefore, the interim protection earlier granted by this Court should continue till everything is finalized. We are not inclined to extend the protection any further. Mr. Divyeshvar would submit that the department does not require the presence of the writ applicants any further. The department would like to now proceed further in accordance with law - In view of such statement being made by Mr. Divyeshvar, nothing more is required to be adjudicated. Even as on date, if the writ applicants have an apprehension that they would be arrested any time, it is open for them to take recourse available to them in accordance with law to take care of such a situation. Application disposed off.

Summary

Issues:
Challenge to summons issued under Section 70 of the CGST Act, 2017.

Analysis:
The judgment dealt with two writ applications challenging summons issued under Section 70 of the CGST Act, 2017. The Court treated one application as the lead matter for convenience. The writ applicant sought various reliefs including quashing of the summons and a stay on its operation. The Court noted that the challenge was to the summons issued by the respondent under Section 70 of the CGST Act, 2017. An order dated 17th July 2019 directed no coercive action against the writ applicant till the next date, emphasizing the need for the applicant to address tax liability concerns. The respondents highlighted the applicant's failure to comply with directions and provide necessary documents during investigations, raising concerns about the creation of dummy companies for tax evasion.

The Court heard arguments from both sides, where the respondent pointed out the applicant's non-cooperation during investigations. The respondent stressed that the applicant knowingly flouted court directions and failed to comply with document requests, hindering the investigation into tax liabilities. The respondent accused individuals associated with the applicant of contravening tax laws and engaging in fraudulent activities. The Court observed that the writ applications seemed to be filed to avoid arrest, with no legal grounds to challenge the summons under Section 70 of the Act. Despite arguments for continuing interim protection, the Court refused to extend it further.

The respondent indicated that the department no longer required the presence of the writ applicants, expressing intent to proceed as per the law. The Court, considering the statements made, disposed of both writ applications, discharging the notice and vacating the earlier granted interim protection. It allowed the respondents to proceed further in accordance with the law. The judgment highlighted the importance of compliance with legal procedures and the consequences of non-cooperation during investigations.