2022 (8) TMI 212 - HC - GST

Petitioner Challenges GST Inquiry Procedure, Court Upholds Investigative Authority's Right to Summon and Conduct Comprehensive Examination

HC of Madras dismissed a Criminal Original Petition alleging harassment during a GST case enquiry. The court found the term 'harassment' subjective and ... Harassment during enquiry - duty to cooperate with investigating authority - refusal of blanket restraining direction against enquiry - issuance of notice and conduct of enquiry in accordance with lawHarassment during enquiry - duty to cooperate with investigating authority - refusal of blanket restraining direction against enquiry - Prayer for a blanket direction restraining the respondent from harassing the petitioner during the pending enquiry was rejected. - HELD THAT: - The Court observed that the concept of harassment is subjective and cannot be reduced to an objective criterion. Where the petitioner has been issued summons by the respondent and an enquiry is pending, the petitioner is obliged to cooperate with the enquiring authority. In the absence of cooperation, the petitioner cannot seek a broad injunction restraining the respondent from pursuing enquiry activity. Applying these considerations, the Court declined to grant the relief sought and dismissed the petition on merits. [Paras 4, 5]Petition dismissed; blanket direction restraining the respondent from conducting the enquiry refused; petitioner must cooperate with the enquiry.Issuance of notice and conduct of enquiry in accordance with law - The Court directed correction of terminology in its earlier order and directed the respondent to issue notice and proceed with the enquiry within a stipulated time. - HELD THAT: - The Court corrected an inadvertent reference in its earlier order by substituting 'Police' with 'respondent/the Superintendent of GST'. It directed the respondent to issue notice to the petitioner within two weeks to cause his appearance for the enquiry and, after making enquiries, to either register a complaint if a cognizable offence is disclosed or proceed further in accordance with law. The direction confines the authority to follow due process in conducting the enquiry. [Paras 3]Earlier order rectified; respondent directed to issue notice within two weeks and to proceed with the enquiry and further action in accordance with law.Final Conclusion: The petition seeking a blanket restraint on the respondent's enquiry was dismissed; the order was rectified to replace 'Police' with 'respondent/the Superintendent of GST', and the respondent was directed to issue notice within two weeks and proceed with the enquiry in accordance with law. Issues:1. Alleged harassment during GST case enquiry.Analysis:The High Court of Madras, in the judgment delivered by Honorable Mr. Justice N. Sathish Kumar, addressed a Criminal Original Petition concerning the alleged harassment of the petitioner during an enquiry related to a GST case involving Kalki Traders. The petitioner, represented by Mr. R.N. Amarnath, sought a direction to prevent harassment by the respondent, represented by Mr. N.P. Kumar, Special Public Prosecutor for GST.The petitioner claimed that under the production of summons, they were compelled to provide an undertaking to pay a tax amount of Rs.29 lakhs. On the other hand, the respondent argued that despite multiple opportunities, the petitioner failed to produce any supporting documents for their case. The court emphasized that the term 'harassment' is subjective and cannot be precisely defined objectively. It was noted that since the enquiry was ongoing, the petitioner, having lodged a complaint, was obligated to cooperate with the authorities. The court stated that without such cooperation, a blanket direction against alleged harassment could not be granted.Consequently, the court dismissed the prayer sought by the petitioner, leading to the rejection of the Criminal Original Petition. The order directed the Police to issue a notice within two weeks to summon the petitioner for the enquiry. Following the enquiry, the Police could either register a complaint if a cognizable offense was established or close the complaint accordingly.In a subsequent mention of the matter under Crl.O.P.No.7736 of 2022, the court clarified an error in the previous order where 'Police' was mistakenly mentioned instead of the 'respondent/the Superintendent GST.' The court reiterated the subjective nature of harassment and the petitioner's obligation to cooperate with the respondent during the enquiry process. The revised order emphasized that without such cooperation, the requested blanket direction against alleged harassment could not be granted. Consequently, the Criminal Original Petition was dismissed, and the respondent was instructed to issue a notice to summon the petitioner for the enquiry, allowing further legal action as per the law.