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TMI Blog2021 (2) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... to be accepted. It is for this reason that much emphasis has been placed on the definition of person under Section 2 (84) of the CGST Act and it is emphasized that since each of the said firms or business establishments has a different registration number, the alleged wrongdoing of these four firms cannot be clubbed together to exceed the figure of ₹ 5 crores. The material available on record, including the figures stated in the affidavit filed on behalf of respondent No.2, would show that the figure of ₹ 5 crores stands exceeded, if the amount of input tax credit allegedly wrongly availed by at least two or more of the aforesaid firms, is put together. A perusal of the material on record shows that according to the facts that have emerged at this stage on the basis of investigation carried out by respondent No. 2, it is only the petitioner, who is effectively running and controlling all the four aforesaid firms or business establishments. Although the petitioner has retracted his statement given under section 70 of the CGST Act, the other statements on record show that the aforesaid four firms and their activities are carried out and controlled by the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrest under Section 69 of the CGST Act, in the face of the material available on record at this stage with the said respondent. It cannot be said that the petitioner has been able to make out such a strong prima facie case that his arrest under the provisions of the CGST Act can be said to be in violation of procedure established by law, thereby violating his right under Article 21 of the Constitution of India - the petitioner has not been able to make out a case for exercising jurisdiction of this court under Article 226 of the Constitution of India. Therefore, the prayers made in the present writ petition cannot be granted. Petition dismissed. - CRIMINAL WRIT PETITION NO.93 OF 2021 - - - Dated:- 8-2-2021 - S.S. SHINDE MANISH PITALE, JJ. Mr. Abad Ponda, Senior Advocate a/w Ms. Anveshika Singh i/b Mr. Karan Jain for the Petitioner. Mr. Jitendra B. Mishra, Special Public Prosecutor, for Respondent No.2. Mrs. S.D. Shinde, APP for Respondent No.1/State. JUDGMENT (PER MANISH PITALE, J.) 1. Rule. Rule made returnable forthwith. With the consent of learned counsel appearing for the parties, heard finally. 2. The petitioner has approached this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the arrest and continued custody of the petitioner was wholly illegal and, therefore, unsustainable. 6. Mr.Ponda, learned senior counsel appearing on behalf of the petitioner, reiterated the grounds of challenge raised in the writ petition by inviting attention of this court to the provisions of the CGST Act. Attention of this court was invited to the definition of the expression person as stated in section 2 (84) of the CGST Act. It was submitted that under the said provision an individual, a Hindu undivided family, a company, a firm and so on were treated as distinct persons, which was significant for the present case. It was submitted that respondent No.2 had proceeded on the basis that the four business establishments being investigated were controlled by the petitioner. But, a perusal of the documents, on the basis of which respondent No.2 proceeded, would show that the petitioner was a proprietor of M/s. Shree Ganesh Textiles , he was the Karta of Hindu Undivided Family engaged in the business of fabrics by the name M/s. Yash Fabrics , the father the petitioner was proprietor of M/s. J.K. Fabrics and he was the Karta of Hindu Undivided Family engaged in the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. It was further submitted that in absence of any such provision, the alleged input tax credit wrongly availed by the aforesaid four distinct business establishments could not have been clubbed together to cross the threshold of ₹ 5 crores as stated in section 132 (1) (i) of the CGST Act, to claim that the petitioner had committed cognizable and non-bailable offences under section 132 (5) of the CGST Act. Reliance was placed on judgment of the Hon ble Supreme Court in the case of Arnab Manoranjan Goswami Vs. The State of Maharashtra Others (Judgment and Order dated 27.11.2020 passed in Criminal Appeal No. 742 of 2020), particularly paragraph 61 thereof. Reliance was also placed on judgments of High Courts, reference to which shall be made while dealing with the contentions raised on behalf of the petitioner. 9. Mr.Mishra, learned Special Public Prosecutor appearing for respondent No.2, vehemently opposed the contentions raised on behalf of the petitioner. By referring to the affidavit filed on behalf of respondent No.2, it was submitted that although four firms or business establishments were the subject matter of investigation and proceedings in the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Dugad Vs. Union of India Ors. (Judgment and Order dated 15.01.2021 passed Criminal Writ Petition No.1715 of 2020) and Ashish Jain Vs. Union of India Ors. (Judgment and Order dated 31st July, 2019 passed in Writ Petition No.3804 of 2019). 11. Having heard the learned counsel appearing for the rival parties, in the context of the specific contention raised on behalf of the petitioner, it would be appropriate to reproduce relevant portions of some of the above referred provisions of the CGST Act. 12. Section 2(84) reads thus : 2. Definitions. In this Act, unless the context otherwise requires,- (1)------ (84) person includes- (a) an individual; (b) a Hindu Undivided Family (c) 13. Section 69 reads thus : 69. Power to arrest (1) Where the Commissioner has reasons to believe that a person has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132 which is punishable under clause (i) or (ii) of subsection (1), or sub-section (2) of the said section, he may, by order, authorise any officer of central tax to arrest such person. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er : 137. Offences by companies (1) ---- (3) Where an offence under this Act has been committed by a taxable person being a partnership firm or a Limited Liability Partnership or a Hindu Undivided Family or a trust, the partner or karta or managing trustee shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly and the provisions of sub-section (2) shall, mutatis mutandis, apply to such persons . 16. The specific contention raised on behalf of the petitioner is that in the present case, this Court needs to exercise its extraordinary writ jurisdiction under Article 226 of the Constitution of India since the right of the petitioner under Article 21 of the Constitution of India has been allegedly violated. According to the petitioner, his arrest and continued custody is not according to the procedure established by law and, therefore, this Court needs to interfere in the present matter by setting aside the impugned order dated 30.12.2020 passed by the Court of Magistrate, remanding the petitioner to magisterial custody and giving a direction for release of the petitioner forthwith. 17. In order t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatements on record show that the aforesaid four firms and their activities are carried out and controlled by the petitioner himself. In fact, even as per the statements made in the writ petition itself, the petitioner is sole proprietor of the entity M/s Shree Ganesh Textiles and he is the Karta of the Hindu Undivided Family that does business in the name of M/s Yash Fabrics . Section 137 (3) of the CGST Act, quoted above, clearly states that where an offence under the said Act is committed by a Hindu Undivided Family, the Karta shall be deemed to be guilty of that offence and he shall be liable to be proceeded against and punished. 20. Thus, even if, at this stage, it is to be concluded that the petitioner may not be held liable for the other two firms of which his father is the proprietor and Karta, insofar as M/s Shree Ganesh Textiles and M/s Yash Fabrics are concerned, it is only the petitioner who is the proprietor and Karta. Therefore, he is the only person responsible for the alleged offences committed by the said two firms on the basis of the material presently available on record. This is quite apart from the fact that the statement of the Tax Consultant as also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. When the material available on record is viewed from this angle it becomes clear that the contention raised on behalf of the petitioner regarding non-availability of provision in the CGST Act for clubbing the wrongful activities of distinct legal persons, by relying upon certain provisions of the Income Tax Act and other legislations, cannot hold water and it cannot be said that respondent No. 2 wrongly exercised the power to arrest under Section 69 of the CGST Act, in the face of the material available on record at this stage with the said respondent. It cannot be said that the petitioner has been able to make out such a strong prima facie case that his arrest under the provisions of the CGST Act can be said to be in violation of procedure established by law, thereby violating his right under Article 21 of the Constitution of India. In this regard the emphasis placed on behalf of the petitioner on the judgment of the Hon ble Supreme Court in the case of Arnab Manoranjan Goswami (supra) is misplaced because the said judgment of the Hon ble Supreme Court laid down that the High Court ought to exercise its power under Article 226 of the Constitution of India in situations wher ..... X X X X Extracts X X X X X X X X Extracts X X X X
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