TaxTMI 
TaxTMI 
2025 (12) TMI 1138
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....i Factory, Village Dohabari, West Bengal, who are the manufacturer of bidi with the Brand name of 'Udaan', through proper Tax Invoices during Financial Years 2020-21, 2021-22, 2022-23, 2023-24 and 2024-25, which are as under: Financial Year Total Purchases Invoice dated Total Sales and Closing Stock Remarks 2020-21 Rs. 12,90,650/- 12.06.2020 & 14.12.2020 Sales - Rs. 8,70,000/- Closing Stock-Rs. 4,20,650/- Copy of the Ledger of FY 2020-21 & all the tax invoices are annexed as Annexure P-2 2021-22 Rs.3,82,894/- 25.10.2021 Sales - Rs. 5,36,650/- Closing Stock-Rs. 2,66,894/- Copy of the Ledger of FY 2021-22 & all the tax invoices are annexed as Annexure P-3 2022-23 Rs.10,32,192/- 14.07.2022 14.07.2022 17.01.2023 17.01.2023 17.01.2023 Sales - Rs. 6,25,280/- Closing Stock-Rs. 6,73,806/- Copy of the Ledger of FY 2022-23 & all the tax invoices are annexed as Annexure P-4 2023-24 Rs. 11,03,471/- 28.07.2023 26.03.2024 Sales - Rs. 12,75,000/- Closing Stock-Rs. 5,02,277/- Copy of the Ledger of FY 2023-24 & all the tax invoices are annexed as Annexure P-5 2024-25 till date Rs. 6,63,560/- ....
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..... 9. Correspondingly, a search was carried out by DGGI at the factory premises and residential premises of Akhtar Hussain, Proprietor of M/s Nila Biri Factory, West Bengal in W.P.(CRL) 1861/2024 on 15.05.2024 from 12:50 PM till 12:20 AM on 16.05.2024, as per the Panchnama. The stock lying at the premises matched with the stock register and was found to be in order. The Panchnama / Seizure Memo dated 15.05.2024 confirmed the search carried out at the factory premises and the co-operation of the Petitioner. The Panchnama indicated that nothing adverse was found from Petitioner's residential premises. Petitioner submits that all purchases were made after paying proper tax and he is regularly filing GST returns. 10. Petitioner Akhtar Hussain has stated that he is engaged into a small-scale business of manufacturing and supply of bidi, since 1990. After the demise of his father in 2019, he took over the said business. GST Registration Number of the business is 19ABPPH3960C1ZL and GST returns of the last five years, i.e. from FY 2019-20 to FY 2023-24 are collectively annexed, along with the Writ Petition. 11. Summons dated 25.05.2024 was issued against seeking the presence of Ak....
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....es under the Act, are non-cognizable and bailable as provided in sub-Section 132 (4) of the Act. 18. It is further submitted that since no assessment has ever been carried out, no liability is imposed / crystallized on account of GST dues by the Respondent, Section 132(5) CGST Act which clearly states that only where the amount exceeds Rs.5 crore would it be cognizable and non-bailable, cannot be invoked. 19. Furthermore, in the pre-GST regime, no arrest can happen without enquiry/assessment/adjudication, as has been held in the cases of Make My Trip vs. UOI, (2016) 44 STR 481 (Del.) and Cleartrip Pvt. Ltd & Others vs. UOI, (2016) 42 STR (Bom.). 20. Even in GST regime, it has been similarly held that no arrest can happen without enquiry/ assessment/ adjudication, for which reference has been made to Akhil Krishnan Maggu vs. DGGI, (2020) 32 GSTL 516 (P&H) and Jaychandran Alloys P. Ltd. vs. Superintendent of GT Salem, (2019) 25 GSTL 321(Mad.). 21. It is submitted that in C. Pradeep Kumar vs. Commissioner of GST and Central Excise, Saleem, the Apex Court had granted Anticipatory Bail to the Petitioner therein, on deposit of 10% of the disputed liability in the case. Likewi....
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....ended by the Petitioners in the first place. Moreover, the stock lying in the factory matched with the stock showing in the books of account and was found in order. 29. Hence, it is prayed that a direction be issued to the Respondent from taking any coercive action against the Petitioners and granting protection to the Petitioners from arrest; the setting aside of summons dated 06.05.2024 and 25.05.2024 respectively, under Section 70 CGST, 2017 issued by the Respondent and further, direct the Respondent to release the seized papers/documents/goods seized by them by respective panchnama. 30. Counter Affidavit has been filed on behalf of the Respondent wherein it is submitted that the Petitioner Aniqul Islam was engaged in clandestine trading of goods viz. Bidi from Akhtar Hussain, the manufacturer namely M/s. Nila Biri Factory, based in West Bengal. The case requires further investigation, which includes the confrontation of the evidence recovered during searches conducted at the related premise of the Petitioner Aniqul Islam and M/s. Aarti Traders. 31. The evidence indicates clandestine trading of goods viz. Bidi from the same manufacturer by both the firms, which also nee....
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....lway Station. During the search conducted at the aforesaid premises, various incriminating details, documents, mobile phones, and unofficial records / kacchi were recovered. In addition, un-declared/non-duty paid goods i.e. Bidi were seized from the premises related to M/s Aarti Traders & M/s Mohammed Aniqul Islam, of which Shri Naveen is the proprietor. 38. Both parties are involved in the covert acquisition and distribution of merchandise, specifically biri under the "UDDAN" brand, through their respective proprietorship enterprises, which were sourced from the mutual supplier, M/s Nila Biri Factory, located in Dohabari, Uttar Dinajpur, West Bengal. 39. In respect of M/s Mohammed Aniqul Islam (Petitioner), it is documented that search operations were conducted on 22.03.2024 at two locations; one at principal place of business situated at Ground Floor, A-95 Flats, Shastri Park, North East Delhi, and other at undeclared warehouse situated in Gali No.2, Shastri Park, North East Delhi. During the inspection at registered place of business at Shastri Park, it was found that firm was not operational at the aforementioned premises. Instead, operations of the said firm were found t....
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....are liable to be dismissed. Submissions heard and record perused. 46. The present Writ Petitions have been filed for the setting aside of summons issued under Section 70 CGST Act, 2017, and the release of goods seized. 47. The Petitioners had been issued summons and asked to appear for ensuring that the appropriate procedures for handling the seized goods, as stipulated under CGST Act, 2017 were duly followed. 48. The Petitioners have challenged the summons on the grounds that they are in clear violation of the guidelines issued by the Respondent from time to time, and have even been issued without having the seal of the office of the Respondent, which is in gross violation of the guidelines. 49. The first aspect to be considered is the nature of the summons issued under Section 70 CGST Act, 2017. 50. Section 70 of the CGST Act, 2017 is as follows: "70. Power to summon persons to give evidence and produce documents.- (1) The proper officer under this Act shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry in the same manner, as provided in the case....
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....from either examining the implication of the evidence so collated or consider justifiable inferences that could be drawn. A search could, hypothetically speaking, also lead to the recovery of material that never formed part of the original assessment and was unknown to the assessing authority. It could, theoretically speaking, also have a bearing on the truthfulness of the disclosures made in the course of the original proceedings. The submissions addressed by learned senior counsel, in our considered opinion, clearly fails to factor these aspects into consideration. 10. We are thus unconvinced that Section 6(2)(b) seeks to interdict a summon that may be issued pursuant to a search. As noticed hereinabove, at that stage the authority is merely seeking to gather information and a response from the assessee in respect of material unearthed and information gathered. We would at that stage also be unaware of what action the authority proposes to take. We would thus be left to hypothesize whether the authority seeks to invoke Section 73 or Section 74 of the Act. If the authority were to invoke Section 74 in case of an assessment already made, it would still have to establish th....
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....partment has decided to proceed against the taxpayer for recovery of liability. Therefore, issuance of summons, by no stretch, can be considered as the initiation of proceedings, since at that stage, the Department still retains the discretion not to initiate any proceedings. A mere contemplation or possibility of initiating action cannot be equated with "proceedings", as doing so would undermine the framework of cross-empowerment under the Act. Even when a discovery is made during the search proceedings under Section 67 of the CGST Act, the Department is required to bring such proceedings to a definitive conclusion, either by issuing a show cause notice under Section 74 or by dropping the matter altogether." [Emphasis supplied] 54. Likewise, in the case of Kuppan Gounder P.G. Natarajan vs DGGI, New Delhi, 2021 SCC OnLine Mad 17053, a writ petition had been filed to challenge the summons issued under Section 70 of the CGST Act, 2017 by the Respondent therein. The Division Bench of the High Court of Madras had dismissed the petition, observing that: "3. The Learned Senior Counsel though argued the merits to some extent, this Court is of the considered opinion th....