TaxTMI 
TaxTMI 
2026 (2) TMI 108
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....JDPN0801E1ZV, and he has been regularly filing GST returns. 3. The father of the Petitioners was engaged in a small-scale business in the trading of bidi in some parts of Delhi since 2015 by the brand name Udaan. It is submitted that all the transactions carried out by the Petitioners, are duly backed by relevant tax Invoices for which payments were made through banking channels only. 4. The Petitioner had not received any Show Cause Notice or Notice with respect to recovery from the Respondent-DGGI, in the last five years. 5. The Respondent initiated a search and survey from 10:55AM 22.03.2024, which was concluded at 2:30AM on 23.03.2024. A Panchnama dated 23.03.2024 was prepared, as per which the search had been carried out on 22.11.2024 (future-dated). The Petitioner asserts that the said error is a colourable exercise being conducted without any control or check. Furthermore, the Panchnama does not contain the signatures of the officers present, nor has any seal been affixed on the same. Despite various officers having visited the premises, only one officer and two witnesses, had signed the Panchnama, which was contrary to the Guidelines framed by the Respondent. The s....
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....ther submitted that this Court in W.P. (Crl.) 1710 of 2024, granted interim protection to an identically placed Trader of biri against the Summoning Order by the Respondent, with a direction to appear before the concerned officer. Further, this Court had during the summer vacations vide Interim Order dated 03.06.2024 in W.P. (Crl.) 1861 of 2024 granted interim protection to another identically placed Manufacturer who sells the biri across the country. 11. During the last few years, it has been noticed by various Courts that the Officials of the Respondent have been misusing their powers under Section 69 CGST Act and have resorted to practices which are normally known as tax terrorism. The Full Bench of the Apex Court in Writ Petition (Crl.) No. 336/2018 titled as Radhika Agarwal vs. Union of India, is seized of a matter examining the powers of the GST Officers with respect to the Arrest, which is pending adjudication. An interim Order dated 17.05.2024 has been passed in the matter, whereby it has been observed that an arrest under the Act cannot be on mere suspicion but after proper inquiry and adherence to the procedure laid down under the law, and should be based on verifiable....
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.... Reliance is further placed on Suraj Vijay Agarwal vs. State of Maharashtra, SLP (Crl.) 8432 of 2023 decided on 21.08.2023, and Arun Yadav vs. The State of Uttar Pradesh, SLP (Crl.) No. 1649 of 2024 decided on 1.03.2024, wherein the Apex Court granted bail on the ground of parity. 20. As per the Panchnama dated 22.03.2024 and 15.05.2024 respectively, full cooperation had been extended by the Petitioners in the first place. Further, it has not been signed by the concerned officers who had carried out the search and is in gross violation of the Guidelines issued by the Respondent from time to time. 21. Reliance has further been placed on Order dated 19.01.2024 passed in Directorate General of GST Intelligence vs. Jitender Kumar, Crl. M.C. 4528/2023, which reiterated the position of law laid in Directorate General of GST Intelligence vs. Chaman Goel, Crl. M.C. 2791/2023 by this Court. Further reliance has been placed on Neha Agrawal and Anr. vs. The Commissioner of CGST and Central Excise Mumbai Central and Ors., in Anticipatory Bail Application bearing no. 3625/2021 in which the court finds merit in the submission that the Anticipatory bail is maintainable and the same can be a....
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....e. M/s Nila Biri Factory on 15.05.2024. The search was conducted under Section 67(2) CGST Act at their related premises, including premises of some Delhi-based transporters and the Parcel Office of Old Delhi Railway Station. During the search on 22.03.2024, initiated at various premises as stated above, incriminating details/ documents/ mobiles etc. were recovered, and further undeclared/ non-duty paid goods, i.e. biri of Udaan brand were seized at the registered premises of the Petitioner and at the premise of the respective Transporter in Delhi and Panipat. 30. The Petitioner and his brother, were engaged in clandestine trading, without issuing tax invoice and without payment of GST, of Udaan brand biri being manufactured by M/s Nila Biri Factory. 31. During the investigation, the modus operandi of the Petitioners as identified by the Respondent as that Udaan brand biri was manufactured and supplied by M/s Nila Biri Factory based in Dohabari, West Bengal, and thereafter transported by road and railways to Delhi. The biri transported through the Indian Railway, was transported clandestinely and by way of misdeclaration with an intention to evade the tax. Once the biri was re....
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....irectorate General of GST Intelligence Unit, Delhi, 2023:DHC:6165, wherein the Court declining to grant protection at the stage of investigation, by observing that there are inherent safeguards in Section 69 prior to the affecting arrest of the accused persons. 39. Reliance is also placed on Prakash Kumar Rameshbhai Patel vs. State of Maharashtra and Ors., 2024:BHC-AS:17051-DB, wherein the High Court of Bombay, noting the non-cooperation of the Petitioner with the Investigating Authorities, declined to grant protection to the Petitioner. 40. It is claimed that the fraud committed in this case, is of an extraordinary nature, characterized by a persistent and ongoing practice of fraudulent evasion of Goods and Services Tax. This type of fraud transcends ordinary offenses and poses a significant threat to the integrity of the GST system. Furthermore, the Petitioner is derailing the investigation by not cooperating with the investigating authorities. Therefore, the recourse to present Writ Petition is improper, as the Petitioner has not approached the Court with clean hands. 41. Reliance also placed on The State of Gujarat vs. Choodamani Parmeshwaran Iyer, 2023 INSC 972, where....
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.... investigation. Further, the Petitioner vide DRC-03 dated 27.06.2024, has paid the GST alongwith penalty and interest, on the basis of his own calculations, which is an admission that they were engaged in clandestine trading of Udaan biri. Submissions heard and record perused. 50. The present Writ Petition has been filed by the Petitioners for the setting aside of Summons dated 20.05.2024 against the Petitioner No. 1, and appropriate Writ, Order or Direction be issued to the Respondent to release the papers/documents/goods seized by them on 23.03.2024, and to restrain the Respondent DGGI not to illegally detain the Petitioner in odd hours. 51. 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. 52. The nature of Summons issued under Section 70 CGST Act, is with respect to the production of a document, or any other thing, in an inquiry. Section 70 CGST Act is reproduced as follows: "70. Power to summon persons to give evidence and pro....
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.... which may not have been even available at the stage of the original assessment proceedings. However, if the contention of the petitioner were to be accepted, authorities would stand injuncted and barred 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 ....
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....fically to the issuance of a notice under the relevant provisions of the GST enactment. *** 74. In the facts of the present case, the mere issuance of summons does not imply that the Department 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] 56. Thus, the Summons under Section 70 CGST Act pertains to an inquiry and not the initiation of proceedings. Furthermore, with respect to the term "inquiry" as used in Section 70 CGST Act, the Division Bench of the Allahabad in G. K. Trading Com....