High Court grants interim protection in search and seizure case, halts coercive action pending next hearing.

The Madhya Pradesh High Court granted interim protection to the petitioner against coercive action following a search and seizure operation at their premises. The court directed that no coercive steps should be taken until the next hearing, emphasizing that the interim order did not express any opinion on the merits of the case. The Revenue was instructed not to effect further recovery until a demand was lawfully raised. The case was adjourned for further proceedings, with the court maintaining a balance between preventing coercion and allowing the investigation to continue.

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Issues:
- Coercive action against the petitioner
- Search and seizure operation at the petitioner's premises
- Arrest of shareholders under Section 69 of the GST Act
- Alleged imaginary figures and artificial liability projection
- Deposit of amount under protest by the petitioner
- Threats of illegal arrests to employees and directors
- Reliance on Telangana High Court judgment
- Assurance by Revenue for no further recovery till demand raised
- Interim protection against coercive steps

Coercive Action Against the Petitioner:
During a hearing convened through video conferencing, the petitioner's counsel requested restraint from coercive steps by the respondents following a search and seizure operation at the petitioner's premises. The counsel highlighted that a significant amount of sanitizer had been manufactured and sold by the petitioner, with a remaining stock of 9 Lakh liters. The counsel argued against the artificial liability projected on the petitioner based on alleged imaginary figures and the arrest of two shareholders under Section 69 of the GST Act. Despite depositing Rs. 8 Crores under protest as required by the Department, the petitioner's employees and directors were reportedly facing illegal arrest threats.

Reliance on Telangana High Court Judgment:
The respondents' counsel cited a Telangana High Court judgment to counter the petitioner's claims. The judgment referenced was W.P. No.4764/2019 (P.V. Ramana Reddy vs. Union of India and others) decided on 18.04.2019, which was affirmed by the Apex Court through the dismissal of a Special Leave Petition. The Revenue's counsel assured that no further recovery would be made until a demand was raised in accordance with the law.

Interim Protection Against Coercive Steps:
After hearing both parties and considering the facts, the court directed that no coercive action should be taken against the petitioner until the next hearing scheduled for 05.08.2020. The respondents were bound by their statement not to effect further recovery until a demand was raised lawfully. However, the interim protection granted did not prevent the respondents from continuing the investigation until the next hearing. The court clarified that unless the interim order was extended on the next date, it would cease to exist thereafter. Importantly, the court emphasized that the interim order should not be construed as expressing any opinion on the merits of the controversy related to the bail matters of the arrested shareholders.

Conclusion:
The judgment of the Madhya Pradesh High Court provided interim protection to the petitioner against coercive action, considering the circumstances and the assurances given by the Revenue. The court maintained the balance between preventing coercive steps and allowing the investigation to proceed, with a clear directive for the respondents to adhere to their commitment until the demand was lawfully raised. The case was adjourned for further hearing, with the original record being kept in the custody of the Principal Registrar for the next hearing on 05.08.2020.

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