2025 (2) TMI 310 - Other - GST

Challenged the legality of the Arrest of accused made in a hasty manner - despite the writ petition being pending before the Hon ble High Court - interference with the administration of justice - Hon ble High Court issued show cause notice to Assistant Commissioner of State Tax - Contempt of Court - Non communication /information of the mandate of Section 50 of CrPC - Non compliance of the summon - fraudulent activities of wrongfully availment or utilisation of input tax credit - Petitioner Not aware about its GSTIN has been cancelled and declared as non genuine tax payer - HELD THAT - In the present case the arrest memo is filed by the prosecution. It indicates grounds of arrest are explained to the accused. he is informed about his lawful rights with regards to arrest. It bears signature of the accused. From the record it shows that the officer has recorded statement of accused on 29.11.2024 and second summons issued on 19.12.2024 to the accused to attend on 30.12.2024 for recording his further evidence and to produce documents. However the accused is arrested today though summons is issued to the accused to record his statement. on 30.12.2024. Hon ble High Court observed as From the Arrest memo dated 20 December 2024 which is placed before us it is apparent that this arrest memo is signed again by Mr. Chandar T. Kamble the Assistant Commissioner of State Tax. The arrest memo shows that the authorisation for this arrest was obtained on 22 December 2024 i.e. today itself and the Petitioner Mishal J. Shah was arrested at 7 55 am today itself. The Ld. Special PP submits that the writ petition was in respect of Section 83 of GST Act 2017 before the Hon ble High Court has considered the facts and issued show cause notice to the officers. The offence u/s 132 of the GST Act is punishable upto 5 years. Pursuant to the second summons accused could have attended the office of the complainant for recording his statement on 30.12.2024. Therefore it appears that the arrest of the accused is in hasty manner though issued second summons for recording his statement on 30.12.2024. Thus the arrest is in hasty and illegal manner and so arrest is illegal. Hence accused cannot be taken in judicial custody and is liable to be released. Hence order

The judgment revolves around the remand application concerning the accused, Mishal Jaswant Shah, who was produced before the Additional Chief Judicial Magistrate in connection with alleged offenses under the Maharashtra Goods and Services Tax Act, 2017, and related provisions of the IGST Act, 2017. The primary issues considered in this judgment include the legality of the arrest, the necessity of judicial custody, and the procedural compliance by the authorities.

1. Issues Presented and Considered

The core legal questions considered in this case are:

Whether the arrest of Mishal Jaswant Shah was lawful and in compliance with procedural requirements.
Whether judicial custody was necessary for the continuation of the investigation.
Whether the actions of the authorities amounted to interference with the administration of justice.

2. Issue-Wise Detailed Analysis

Legality of Arrest

Relevant Legal Framework and Precedents: The arrest was made under Section 132(1)(i) of the Maharashtra Goods and Services Tax Act, 2017, read with Section 20 of the IGST Act, 2017. The defense cited precedents from the Bombay High Court, emphasizing the necessity of communicating grounds of arrest to the accused as per Section 50 of the Cr.P.C.
Court's Interpretation and Reasoning: The Court examined whether the grounds of arrest were communicated to the accused. It noted that the arrest memo and panchnama indicated that the grounds were explained to the accused in a language he understood, and his rights were communicated, thus fulfilling the procedural requirements.
Key Evidence and Findings: The arrest memo and panchnama, both signed by the accused, were crucial in establishing that the grounds of arrest were communicated adequately.
Application of Law to Facts: The Court distinguished the present case from cited precedents, where the grounds of arrest were not communicated. Here, the evidence showed compliance with procedural requirements, leading to the conclusion that the arrest was lawful.
Treatment of Competing Arguments: The defense argued the arrest was illegal due to non-communication of grounds, relying on previous judgments. However, the Court found these precedents inapplicable due to factual differences.
Conclusions: The Court concluded that the arrest was lawful as the procedural requirements were met.

Necessity of Judicial Custody

Relevant Legal Framework and Precedents: The prosecution sought judicial custody to continue the investigation into fraudulent activities involving input tax credit claims.
Court's Interpretation and Reasoning: The Court considered whether the accused's cooperation and the pending writ petition before the High Court warranted judicial custody. It noted the accused's cooperation and the issuance of a second summons for further investigation.
Key Evidence and Findings: The Court highlighted the accused's cooperation, the pending writ petition, and the issuance of summons for further investigation as factors against judicial custody.
Application of Law to Facts: The Court found the arrest hasty, given the cooperation shown by the accused and the pending writ petition. It deemed judicial custody unnecessary.
Treatment of Competing Arguments: The prosecution argued for custody due to ongoing investigations, while the defense highlighted cooperation and pending legal proceedings. The Court sided with the defense, emphasizing procedural fairness.
Conclusions: The Court concluded that judicial custody was not warranted and ordered the release of the accused on bail.

Interference with Administration of Justice

Relevant Legal Framework and Precedents: The Court considered whether the arrest amounted to interference with justice, potentially constituting contempt of court.
Court's Interpretation and Reasoning: The Court noted the timing of the arrest, coinciding with the issuance of a summons and the pending writ petition, suggesting potential interference with judicial proceedings.
Key Evidence and Findings: The arrest memo and the timing of the arrest relative to court proceedings were critical in assessing potential interference.
Application of Law to Facts: The Court found prima facie evidence of interference, issuing a show-cause notice to the responsible officer.
Treatment of Competing Arguments: The defense argued the arrest was retaliatory, while the prosecution maintained it was part of due process. The Court leaned towards the defense's view, given the surrounding circumstances.
Conclusions: The Court issued a show-cause notice for potential contempt, indicating interference with justice.

3. Significant Holdings

Preserve Verbatim Quotes of Crucial Legal Reasoning: The Court noted, "At least prima facie, we think that this amounts to interference with the administration of justice and consequently, might amount to Contempt of Court."
Core Principles Established: The judgment reinforces the necessity of procedural compliance in arrests and the importance of ensuring actions do not interfere with judicial proceedings.
Final Determinations on Each Issue: The Court determined the arrest was lawful but hasty, judicial custody was unnecessary, and there was prima facie interference with justice, warranting a show-cause notice for contempt.

← Previous