TaxTMI 
TaxTMI 
2025 (8) TMI 1292
X X X X Extracts X X X X
X X X X Extracts X X X X
....The prayer in these writ petitions is for declaration, inter alia, that Sections 69, 70 and 132 of the CGST Act are beyond the legislative competence of the Parliament and the same are ultra vires the Constitution of India. In one of the writ petitions compensation has also been sought. The prayers in these petitions are as under: "W.P.(C) 5454/2020 i) Declare that Section 69 and 132 of Central Goods and Services Tax Act, 2017 being arbitrary, unreasonable and beyond the legislative competence of the Parliament are ultra vires the Constitution of India. W.P.(CRL) 2020/2020 i. Issue an appropriate Writ, order(s) or direction(s) declaring Sections 69 & 132 of the Central Goods Service Tax Act, 2017, as unconstitutional and ultra vires to Article 21 of the Constitution of India and hence unconstitutional, illegal and unenforceable; ii. Issue an appropriate Writ, order(s) or direction(s) to the Respondent to comply with the mandatory procedure under Chapter XII of the Code of Criminal Procedure, 1973 including Section 154, 157, 167, 172 etc for valid commencement of investigation into any offence qua the petitioner. iii. Declare the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... A. Issue a writ, order or direction to set aside and declare the entire investigation of the Respondent No 2 & 3 qua the Petitioner as non est, illegal, without jurisdiction and void ab initio and further as not in compliance with the mandatory requirements of Chapter XII of the Code of Criminal Procedure, 1973 B. Issue a writ, order or direction to Respondent No. 2 & 3 to accept the payment of Rs. 1,00,00,000 made by Petitioner as under protest and to adjust the amount paid towards any liability incurred by the Petitioner after following due process of law C. Issue a writ, order or direction that any alleged undertaking signed by the Petitioner including to deposit Rs. 8,28,00,000/- (Rupees Eight Crore Twenty- Eight Lakhs Only) i.e. the input credit towards purchases and sales made in financial year 2018-2019 in installments was under involuntary, made under coercion, and therefore non-est, illegal and unenforceable D. Issue a write, order or direction that the Respondent No. 2 and 3 conduct the investigation in accordance with the procedure established by law and restrain from insisting on compliance of the coerced undertaking signed by the Petition....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elying on material that the conditions specified in sub-section (5) of Section 132 are satisfied, and not on suspicion alone. An arrest cannot be made to merely investigate whether the conditions are being met. The arrest is to be made on the formulation of the opinion by the Commissioner, which is to be duly recorded in the reasons to believe. The reasons to believe must be based on the evidence establishing - to the satisfaction of the Commissioner - that the requirements of sub-section (5) to Section 132 of the GST Act are met. 58. Our attention was drawn to the judgment of the High Court of Delhi in Makemytrip (India) Private Limited and Another v. Union of India and Others, which is a decision interpreting the power of arrest under the Finance Act, 1994. These provisions are related to service tax. Excise duty, service tax, and other taxes are subsumed under the GST regime. Accordingly, we are in agreement with the findings recorded in this decision to the extent that the power of arrest should be used with great circumspection and not casually. Further, as in the case of service tax, the power of arrest is not to be used on mere suspicion or doubt, or for even invest....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... preferably within 60 days of arrest, where no bail is granted. Even otherwise, the complaint should be filed within a definite time frame. A report of arrests made must be maintained and submitted as provided in paragraph 6.1 of the Instruction. The aforesaid directions in the Circular/instruction should be read along with the specific directions outlined in the earlier judgments of this Court and the present judgment. [...] 72. The last issue for our determination concerns the constitutional validity of Sections 69 and 70 of the GST Acts which provide for the power to arrest and the power to summon. The petitioners assail the vires of these provisions on the grounds of legislative competence. It is submitted that Article 246-A of the Constitution while conferring legislative powers on Parliament and State Legislatures to levy and collect GST, does not explicitly authorize the violations thereof to be made criminal offences. Our attention was drawn to Lists I and II of the Seventh Schedule to the Constitution which demarcate the legislative fields for the Union and the States to enact laws and make violations of the enactments as offences. Referring to Entry 93 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for the effective levy and collection of GST. Time and again this Court has held that while deciding the issue of legislative competence, entries should not be read in a narrow or pedantic sense but given their broadest meaning and the widest amplitude because they are intrinsic to a machinery of government. The ambit of an entry or article laying down the legislative field extends to all ancillary and subsidiary matters which fairly and reasonably can be said to be comprehended in it. This settled dictum regarding the interpretation of legislative entries equally applies to the special provision of Article 246-A of the Constitution. In the context of the legislative power to levy and collect tax, a Constitution Bench of Seven Judges in R.S. Joshi, Sales Tax Officer, Gujarat and Others v. Ajit Mills Limited and Another, held: "47. The principle in construing words conferring legislative power is that the most liberal construction should be put on the words so that they may have effect in their widest amplitude. None of the items in the List is to be read in a narrow restricted sense. Each general word should be held to extend to all ancillary or subsidiary matters which ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Acts. It hardly needs to be stated that the offences under the PMLA or the Customs Act or FERA are the offences of very serious nature affecting the financial systems and in turn the sovereignty and integrity of the nation. The provisions contained in the said Acts therefore must be construed in the manner which would enhance the objectives of the Acts, and not frustrate the same. Frequent or casual interference of the courts in the functioning of the authorized officers who have been specially conferred with the powers to combat the serious crimes, may embolden the unscrupulous elements to commit such crimes and may not do justice to the victims, who in such cases would be the society at large and the nation itself. With the advancement in Technology, the very nature of crimes has become more and more intricate and complicated. Hence, minor procedural lapse on the part of authorized officers may not be seen with magnifying glass by the courts in exercise of the powers of judicial review, which may ultimately end up granting undue advantage or benefit to the person accused of very serious offences under the special Acts. Such offences are against the society and against the na....