2024 (9) TMI 43 - HC - GST

Section 70 CGST summons for inquiry don't allow anticipatory bail under Section 438 CrPC

The Allahabad HC rejected an anticipatory bail application filed by applicants who were issued summons under Section 70 of the CGST Act, 2017. The court ... Grant of anticipatory bail - summons issued u/s 70 of the CGST Act, 2017 - invocation of provisions of Section 438 of Cr.P.C. - HELD THAT:- It is trite law that when the maintainability of a particular proceeding is challenged before a Court of law apart from the merits of the case the Court at the first sight is under obligation to make an assurance in itself that the matter which is going to be taken up by it is legally maintainable and it is only after ensuring about the maintainability of the said proceedings the Court has to take any further steps in this matter. The factual scenario which reveals from the record is that at this juncture summons under Section 70 of CGST Act, 2017 have been issued against the present applicants. Hon’ble Apex Court in the Choodamani Parmeshwaran Iyer & Anr case [2023 (7) TMI 1008 - SUPREME COURT] pronounces that if the summons are issued under Section 69 of the CGST Act, 2017 to any person for the purpose of recording his statement, the provisions of Section 438 of Cr.P.C. cannot be invoked, but however in the case in hand summons have been issued not under Section 69 of the CGST Act but under Section 70 of the CGST Act. This Court finds hardly any difference between the two. It has been clarified above by quoting the provisions of Section 69 and Section 70 of CGST Act that Section 70 deals with the power of appropriate officer to summon any person to give evidence or to produce documents or any other thing only in any inquiry whereas Section 69 deals with the power of commissioner to authorize any officer of the Central Tax to arrest a delinquent person as explained under Section 69 (1) CGST Act, 2017. This Court is not hesitant to hold that the present application for grant of anticipatory bail moved by the applicants is not maintainable under Section 438 of the Criminal Procedure Code (Section 482 of of Nagrik Suraksha Sahinta, 2023) - the present application for grant of anticipatory bail being not maintainable is liable to be rejected and is hereby rejected. Issues Involved:1. Maintainability of the anticipatory bail application under Section 438 of the Criminal Procedure Code in the context of summons issued under Section 70 of the CGST Act, 2017.2. Legal provisions and interpretation of Sections 69 and 70 of the CGST Act, 2017.3. Jurisprudence on anticipatory bail in cases involving CGST Act, 2017.Detailed Analysis:1. Maintainability of the anticipatory bail application under Section 438 of the Criminal Procedure Code in the context of summons issued under Section 70 of the CGST Act, 2017:The court addressed the issue of whether the anticipatory bail application filed by the applicants under Section 438 of the Criminal Procedure Code is maintainable when summons have been issued under Section 70 of the CGST Act, 2017. The applicants argued that they feared coercive action or arrest due to repeated summons. The court noted that the primary objection raised by the Directorate General of Goods and Services Tax Intelligence (DGGI) was that the application for anticipatory bail is not maintainable since only summons have been issued under Section 70 of the CGST Act, 2017.2. Legal provisions and interpretation of Sections 69 and 70 of the CGST Act, 2017:The court examined the relevant provisions of the CGST Act, 2017, specifically Sections 69 and 70. Section 69 empowers the Commissioner to authorize the arrest of a person if there are reasons to believe that the person has committed an offense specified under Section 132 of the Act. Section 70 grants the proper officer the power to summon any person to give evidence or produce documents. The court highlighted that inquiries under Section 70 are deemed to be judicial proceedings within the meaning of Sections 193 and 228 of the Indian Penal Code.3. Jurisprudence on anticipatory bail in cases involving CGST Act, 2017:The court referred to several precedents, including the judgments in 'State of Gujarat Vs. Choodamani Parmeshwaran Iyer & Anr' and 'P.V. Ramana Reddy Vs. Union of India and Ors,' to establish the legal position on anticipatory bail in cases involving the CGST Act. The Supreme Court in these cases held that anticipatory bail under Section 438 of the Criminal Procedure Code is not applicable when summons are issued under the CGST Act, 2017. Instead, individuals can seek protection against pre-trial arrest by invoking the jurisdiction of the High Court under Article 226 of the Constitution of India.The court also considered the judgment in 'Priya Indoria Vs. State of Karnataka and Ors,' which dealt with the issue of extra-territorial jurisdiction and the grant of interim anticipatory bail. However, the court found that this case was not relevant to the present matter as it did not concern the CGST Act.In conclusion, the court found that the anticipatory bail application was not maintainable under Section 438 of the Criminal Procedure Code because the summons were issued under Section 70 of the CGST Act. The court held that the same principles that apply to summons under Section 69 also apply to Section 70, and thus, the anticipatory bail application was rejected. The applicants were advised to seek redress by filing a writ petition under Article 226 of the Constitution of India.