2023 (3) TMI 488 - HC - GST

Constitutional Validity of section 132(1)(b) and (c) of the CGST Act - violation of Articles 14 and 21 of the Constitution of India 1950 or not - seeking to issue a writ declaring that the power under section 69 of the Central Goods and Services Tax Act 2017 can be only exercised upon determination of liability and a failure on part of the assessee to pay make payments towards such liability. HELD THAT - In the case of NAGPUR CABLE OPERATORS ASSOCIATION VERSUS COMMISSIONER OF POLICE NAGPUR AND ORS. 1995 (8) TMI 342 - BOMBAY HIGH COURT the Division Bench of this court (Nagpur Bench) has expounded procedure with reference to the Rules and the law as to in which circumstances criminal writ petition and which circumstances civil writ petition is to be filed and placed before the court as per the allocation of work. On a query was put to learned counsel for the Petitioners as to whether the Petitioners intends to prosecute the challenge to the provisions of the CGST Act the learned counsel for the Petitioners states that instructions have been taken that the Petitioners would not press these challenges and the interim order be continued for some time. The learned counsel for the Petitioners states that this is so because complaint has now been filed and as regards the remedy concerning liberty of the Petitioners the Petitioners would take necessary action by approaching the criminal court and for that purpose seek extension of the interim order passed in these petitions. Be that as it may since the Petitioners are not pressing the petitions and seeking only the extension of the protective measures this request is to be considered. The Petitioners have been at liberty for almost two years under the interim order which the Respondents have not challenged. Therefore in these circumstances the interim order in these petitions are continued for a period of six weeks for the Petitioners to take steps for the purpose mentioned above. Writ petition disposed off.

Summary

Issues:
Challenge to constitutional validity of sections of CGST Act, issuance of writ of mandamus to restrain Respondents from taking coercive actions.

Analysis:
1. The petitioners sought a declaration that sections 132(1)(b) and (c) of the CGST Act are unconstitutional and violate Articles 14 and 21 of the Constitution of India. Additionally, they requested a writ to restrict the exercise of power under section 69 of the Act only upon determination of liability and failure to make payments towards such liability. Furthermore, a writ of mandamus was sought to prevent the Respondents from filing criminal complaints or taking coercive actions against the petitioners.

2. The Division Bench passed an order requiring the petitioners to execute personal bonds and furnish surety amounts. The petitioners were directed to cooperate in the investigation, not tamper with evidence, and deposit their passports. This order has been in effect since its issuance.

3. Reference was made to the Nagpur Cable Operators Association case, which delineated the procedure for filing criminal writ petitions in cases where the outcome may involve imprisonment or other penalties. The petitioners' counsel indicated that they would not pursue the challenges to the CGST Act provisions and requested an extension of the interim order for protection from arrest.

4. Considering that the petitioners were only seeking an extension of protective measures and not pressing the petitions, the court decided to continue the interim order for six weeks to allow the petitioners to take necessary steps. The Respondents had not contested the interim order during the two years it had been in place, leading the court to grant the extension.

5. The writ petitions were disposed of, and the interim order was extended for six weeks to enable the petitioners to address the issues concerning the protective measures sought.