TaxTMI 
TaxTMI 
2019 (12) TMI 1365
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.... of Article 21 of the Constitution of India. 2. The prayer clause of this petition reads as under. "9 A. This Hon'ble Court may be pleased to issue the writ of habeas corpus or any other writ, order or direction in the nature of habeas corpus directing the Respondent No.4 to physically produce the petitioner's father, namely, Suresh Gadhecha from the custody of the Respondent Nos.2 and 3 as they have wrongfully confined the father of the petitioner, in violation of the provisions of the Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Act, 2017 and be further pleased to handover the custody of the petitioner's father to the petitioner; B. That during the pendency of the present petition, this Hon'ble Court may be pleased to direct the Respondent No.4 to secure the presence of the petitioner's father namely, Suresh Gadhecha, from the custody of Respondent Nos. 2 and 3 and physically produce him before this Hon'ble Court on today, in the interest of justice; C. This Hon'ble Court may be pleased to pass any other and further or grant any relief as may be deemed fit and proper in the interest of justice." 3. This petition was file....
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....o, whereunder, he has been authorized to arrest the father of petitioner; (ii) the documentary evidence and/or the circumstances indicating the due deliberation and application of mind on the part of designated statutory authority for ordering arrest of the father of petitioner - the corpus; (iii) The gist of material which might have been forming part of consideration for arriving at a circumstances stated so as to satisfy the statutory provisions of Section 69 by the statutorily designated authority to arrest; (iv) any other material that may support and justify the arrest especially when emphatic statement is made qua lack of consideration on the part of designated statutory authority rendering the entire arrest questionable. Direct service permitted today." 4. Thereafter, under the orders of Hon'ble the Chief Justice, this petition is listed before this Bench. On 12.12.2019, this Court had passed the following order. "1. Heard Mr. Shalin Mehta, learned Senior Counsel assisted by Ms.Niyati K. Shah, learned counsel for the petitioner and Mr. Hardik Soni, learned Addl. Public Prosecutor for the respondents. 2. Mr.Hardik Soni, learned....
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....e State Tax Officer of arresting the accused / corpus (Sureshbhai Ugarchand Gadhecha) vide Arrest Memorandum dated 06.12.2019, even with the authorisation in that regard by the Joint Commissioner of State Tax vide order dated 05.12.2019 is legally sustainable, OR the said arrest is without authority of law, keeping in view Article 21 of the Constitution of India, as claimed by the petitioner on behalf of the accused / corpus. 7. Rule. Mr. Soni, learned Additional Public Prosecutor waives service of rule on behalf of the respondent Authorities. 8.1 Mr. Shalin Mehta, learned senior advocate assisted by Ms. Niyati Shah, learned advocate for the applicant has submitted that, the father of the petitioner - corpus was summoned by the State Tax Officer on 05.12.2019 at 2:30 pm to give statement under Section 70 of the Act. He had accordingly remained present. He was questioned till late night - 1:00 a.m. of 06.12.2019. When the father of the petitioner requested to the officer that he be permitted to go home and the questioning be continued on the next date, he was informed that he is arrested. In the arrest memorandum, the time of arrest is shown as 1:15 am on 06.12.2019. It is sub....
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.... the corrigendum dated 17.12.2018, the notification dated 05.07.2017 tilts the balance in favour of the corpus. It is submitted that the harmonious reading of these orders / notification would make it clear that the powers delegated vide order dated 23.06.2017 cannot be said to be the delegation of power by the Commissioner under Section 69(1) of the Act for both the functions contained therein. It is submitted that the impugned action being illegal and is without authority of law be interfered with. Mr. Mehta, learned senior advocate for the petitioner has also taken this Court, extensively through the different sections of the Act and the decision of the Supreme Court in the case of Sidhartha Sarawgi (supra) with specific emphasis that the satisfaction to be arrived at by the Commissioner is not the function which otherwise could be delegated by him. However, he has made it clear that since even according to him, order dated 23.06.2017 does not delegate the power of arriving at the satisfaction warranting arrest, the question is as to whether it could have been delegated or not, is not the point at issue and therefore, the same need not be gone into by this Court. 8.4 It is fu....
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.... Court if the Court so desires. 9.6 Heavy reliance is placed on Section 69(1) of the Act. It is vehemently contended that the language of Section 69(1) of the Act makes it clear that there is only one contemplation in it and there is no dis-juncture at any stage in the said subsection and therefore the exercise of power to arrest the person is not independent of recording satisfaction. Attention of this Court is invited to the order dated 23.06.2017 and the Corrigendum dated 17.12.2018, the copies of which are annexed with the affidavit in reply. For the purpose of explaining these two orders, learned Public Prosecutor has read, line-by-line different provisions of the Act, more particularly, Sections 2(91), 5(1), 5(3) and 67 and 69. While referring to the orders dated 23.06.2017 and 17.12.2018, it is contended that, the delegation of power by the Commissioner, in the present case, to the Joint Commissioner, can not be said to be incomplete in any manner keeping in view the provisions of Section 5(1) and Section 5(3) of the Act. 9.7 Mr. Amin, learned Public Prosecutor has taken this Court through the language of Section 69(1) of the Act, line-by-line to contend that, there is....
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....mining the issue whether the accused / corpus, who is in judicial custody and is present before this Court, should be granted bail or not. (ii) This Court is also NOT examining the issue, had the accused / corpus approach this Court in time, whether he would have been granted protection against his arrest or not. (iii) This Court is also NOT examining the issue whether the accused / corpus has in fact committed any offence under the provisions of the Gujarat Goods and Services Tax Act, 2017 and / or the Central Goods and Services Tax Act, 2017, as claimed and recorded by the State Tax Officer and the Joint Commissioner of State Tax that, they have reasons to believe that he (the accused / corpus) has committed such offences warranting his arrest. (iv) The ONLY point for consideration before this Court in this petition is, whether the exercise of powers by the State Tax Officer of arresting the accused / corpus (Sureshbhai Ugarchand Gadhecha) vide Arrest Memorandum dated 06.12.2019, even with the authorisation in that regard by the Joint Commissioner of State Tax vide order dated 05.12.2019 is legally sustainable, OR the said arrest is without authority of....
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.... the erection of a building to be used for purposes of public amusement is the Commissioner of Police. It is also clear that under Rule 250 he has been vested with the absolute discretion at any time to cancel or suspend any license which has been granted under the rules. But the power to do so is vested in him and not in the State Government and can only be exercised by him at his discretion. No other person or authority can do it." 12.3 Following the above principles, the Constitution Bench of the Supreme Court of India in the case of Mohinder Singh Gill versus the Chief Election Commissioner reported in AIR 1978 SC 851 observed (in Paragraph 8 of the said decision) as under. "8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose J. in Gordhandas Bhanj....
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.... section, he may, by order, authorise any officer of State tax to arrest such person. (2) Where a person is arrested under sub-section (1) for an offence specified under sub-section (5) of section 132, the officer authorised to arrest the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twenty four hours. (3) Subject to the provisions of the Code of Criminal Procedure, 1973, (a) where a person is arrested under sub-section (1) for any offence specified under sub-section (4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of the Magistrate; (b) in the case of a non-cognizable and bailable offence, the Deputy Commissioner or the Assistant Commissioner shall, for the purpose of releasing an arrested person on bail or otherwise, have the same powers and be subject to the same provisions as an officer-in-charge of a police station." 13.2 Section 69(1) of the Act stipulates two functions. One is the obligation cast upon the Commissioner and second is the power vested in him. Firstly, t he Commissioner should have reasons to believe that a person has commi....
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....d offence.....". This would mean that, the satisfaction leading to arrest is arrived at by the State Tax Officer, but the arrest is ordered by the Joint Commissioner. Going by the order under scrutiny, the Court may only inquire whether the State Tax Officer, in the present case, was authorised to arrive at any such satisfaction which is condition precedent of ordering arrest of any person. That answer is certainly NO. The respondent Authorities also agree with this. The case of the respondent Authorities however is that, the said satisfaction was arrived at, at the level of the Joint Commissioner of State Tax. As already noted above, since there is reference in the Arrest Memorandum dated 06.12.2019 to the authorisation in that regard by the Joint Commissioner of State Tax vide order dated 05.12.2019, we have taken into consideration the said authorisation dated 05.12.2019 as well. Over and above the satisfaction claimed to have been arrived at by the State Tax Officer as reflected in the order dated 06.12.2019, the authorisation order of the Joint Commissioner dated 05.12.2019 also refers to such satisfaction having been arrived at by him. The relevant part thereof reads that, "I....
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....and penalty referred to in this section Deputy Commissioner Assistant Commissioner State Tax Officer 49 69(1) To authorize any officer of State Tax to arrest a person committed any offence Joint Commissioner (P D Vaghela) Commissioner 13.6 The relevant part of the Corrigendum dated 17.12.2018 reads as under. "For the words, figures and brackets "sub-section (1) of Section 5 read subsection (1) and (3) of Section 5." 13.7 With the aid of the Corrigendum dated 17.12.2018, the State Authorities want us to accept that the order dated 23.06.2017 which was issued in exercise of powers under Section 5(1) of the Act, be read as having been issued in exercise of both - the powers under Section 5(1) and 5(3) of the Act. We accept this. Even then, the non-compliance of condition precedent to order arrest of any person as contemplated under Section 69(1) of the Act stands as it is. For this purpose, Section 5 of the Act needs to be kept in view. It reads as under. "5. (1) Subject to such conditions and limitations as the Commissioner may impose, an officer of State tax may exercise the powers and discharge the duties conferred or imposed on him unde....
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....person (assessee / accused) having committed any offence under the Act is condition precedent for ordering arrest. There is no doubt that even the Commissioner himself can also not order arrest of any person under the Act, if he has not arrived at the conclusion or is satisfied that he (the Commissioner) has reasons to believe that a person has committed any offence under the Act. 14.2.2 By the order dated 23.06.2017 read with Corrigendum dated 17.12.2018, one of the two functions envisaged under Section 69(1) of the Act, being the second one i.e. he (the Commissioner) may, by order, authorise any officer of State tax to arrest such person (who is believed by the Commissioner to have committed any offence) stands delegated to the Joint Commissioner vide Entry No.49. The case of the respondent Authorities is accepted by this Court to this extent. But at the same time, it is also held by this Court that, not only any officer authorised by the Commissioner, but even the Commissioner himself also could not have ordered arrest of any person under the Act, if he (the Commissioner) has not arrived at the conclusion or is satisfied that he (the Commissioner) has reasons to believe that ....
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.... by the statute. We reject this argument. As already held above, Section 69(1) of the Act stipulates two functions, which is already discussed in detail above. Further, even qua one section or even one sub-section, the Commissioner has, by the very order dated 23.06.2017, delegated different functions to different authorities / officers. Reference in this regard needs to be made to Entry Nos.39 to 46 of Schedule - A of the said order dated 23.06.2017. They are as under. SCHEDULE -A Sl.No. Section Functions Assigned Designation of Proper Officer (1) (2) (3) (4) 1 10(5) To determine tax and penalty referred to in this section Deputy Commissioner Assistant Commissioner State Tax Officer 39 67(1) Authorization for inspection at any place of business of taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place Joint Commissioner 40 67(2) Authorization for search, seizure and confiscation. Joint Commissioner 41 67(2) First proviso To serve order not to remove the goods Assistant Commissioner State Tax Officer 42 67(5) ....
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....vit in reply of the respondent authorities annexing therewith the above referred delegation order dated 23.07.2017 read with corrigendum dated 17.12.2018, it was pointed out by the learned senior advocate for the petitioner that the wholesale delegation was made by the Commissioner to the Special Commissioner and Additional Commissioner of the State Tax vide notification dated 05.07.2017. A copy thereof was also placed on record. It was contended on behalf of the petitioner that, had the Special Commissioner or the Additional Commissioner would have recorded satisfaction as contemplated under Section 69(1) of the Act, with regard to the accused having committed any offence under the Act, and in turn, had the Joint Commissioner authorised the State Tax officer to effect arrest, the same could not have been termed as without authorisation, without challenging such a delegation, which is not the case on hand. While making this submission, learned senior advocate for the petitioner is categorical to the effect that, whether such a delegation could have been legally made or not, and if made and challenged, would be sustainable or not, is also an issue keeping in view the law laid down b....
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....was not, which is in the present case. Paragraph 1 of the said decision reads as under. "1. Challenging the summons issued by the Superintendent (Anti Evasion) of the Hyderabad GST Commissionerate, under Section 70 of the Central Goods and Services Tax Act, 2017 (for short 'CGST Act') and the invocation of the penal provisions under Section 69 of the Act, the Directors (Past and/or present) of a few Private Limited Companies, a Chief Financial Officer of a company and the Partner of a Partnership Firm have come up with the above writ petitions." 17.3.2 Opposing those petitions as not maintainable, it was the case on behalf of the State Authorities that the petitioners (therein) can not be permitted to convert the writ Court into a Court of anticipatory bail (vide Para : 9(9) of the said judgment). 17.3.3 While dealing with those petitions and dealing with the objection of the State, the answers given by the Telangana High Court in that regard can be traced in Para : 61 of the said decision, which reads as under. "61. In view of the above, despite our finding that the writ petitions are maintainable and despite our finding that the protection under Se....
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....lieve that a person has committed any offence specified in clauses (a) to (d) of sub-Section (1) of Section 132 CGST Act, 2017. ...". We do not think it proper, or even necessary, to make any further observation, qua the effect of the said decision of the Telangana High Court. 19. It is attempted on behalf of the respondent Authorities to demonstrate before this Court how the corpus can be said to have committed offence under the Act. Learned Public Prosecutor has referred to the details in this regard as contained in the affidavit in reply filed on behalf of the State Authorities. Since we are not examining whether the corpus has committed any offence under the Act or not, dealing with those submissions, would be beyond the scope of the petition. We do not intend to expand the scope of this petition. The details with regard to the illegalities committed by the corpus, as perceived by the State Authorities, is therefore not recorded in this order. 20. In totality and for the reasons recorded above, we arrive at the conclusion that, the satisfaction recorded by the Joint Commissioner, with regard to he (the Joint Commissioner) having reasons to believe that the corpus - Sur....