TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1292
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....ration, 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 entire investigations erroneously commenced by the Respondents qua the Petitioner as non....
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....gal, 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 Petitioner E. Issue an appropriate Writ, order(s) or direction(s) till the show cause notice is issued a fair opportunity is accorded to the Petitioner to present his side of vers....
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....ng 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 investigation, when the conditions of subsection (5) to Section 132 of the GST Acts are not satisfied. [...] 62. The circular also refers to the procedure of arrest and that the Principal Commissioner/Commissione....
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.....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 of List I to the Seventh Schedule, it is submitted that the Parliament can enact criminal provisions only for the matters in List I. It is further submitted that the power to summon, arrest and prosecute are not ancillary and incidental to....
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....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 can fairly and reasonably be said to be comprehended in it. All powers necessary for the levy and collection of the tax concerned and for seeing that the tax is not evaded are comprised within the legislative ambit of the Entry as ancillary or incidental. It is also permissible to levy pe....