TaxTMI 
TaxTMI 
SEVEN DAYS’ NOTICE IS TO BE GIVEN TO THE REGISTERED PERSON BEFORE TAKING COERCIVE ACTION AGAINST HIM
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....EVEN DAYS’ NOTICE IS TO BE GIVEN TO THE REGISTERED PERSON BEFORE TAKING COERCIVE ACTION AGAINST HIM<br>By: - DR.MARIAPPAN GOVINDARAJAN<br>Goods and Services Tax - GST<br>Dated:- 17-8-2026<br>In Directorate General of GST Intelligence, CGST Delhi South Versus Girish Sachdeva, Harish Sachdeva And Abhinav Bardhan - 2026 (6) TMI 435 - DELHI HIGH COURT, an inquiry was initiated based on the intelligence inputs indicating that Daak International Private Limited ('the company' for short), New Delhi was issuing E-way bills of substantial value but the company did not file any return under the GST laws. The petitioner conducted a search in the premises of the company and found that the same was not in existence. The team further found that another....
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.... company 'Access India Impex Centre Private Limited' was functioning the said premises. The petitioner recorded the statement of the Manager of the Company who revealed that their company provided virtual office space to several companies including 'the company'. The Manager also provided the telephone numbers of the respondents in these cases and who are also the directors of 'the company'. The respondents were Girish Sachdeva, Harish Sachdeva and Abhinav Bhandan. All the three appeared before the petitioner and recorded their statements. They stated that they were involved in the business of trading in textiles and minerals. They have no storage facilities. The petitioner issued summons to the above three persons directing to appear....
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.... before it. The said three persons did not appear before the petitioner and did not produce the required documents. Again, the petitioner issued summons to them on 02.02.2022 under section 70 and 174 of the CGST Act with directions to produce the evidences and records. Instead of appearing before the petitioner and producing the documents the above said 3 persons moved applications for anticipatory bail before the Additional Sessions Judge. The ASJ directed the abovesaid persons to join the investigation and make their statements. The petitioner opposed the anticipatory bail petitions on the ground that there was no apprehension of the arrest of the said persons, since the investigation was at the initial stage. The petitioner only issue....
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....d summons to them requiring to join the investigation. Therefore, the applications for anticipatory bail are premature and the same are not maintainable. However, the ASJ vide its orders dated 08.07,2021 and 13.04.2022 directed the petitioner seven days' notice before taking any coercive action against the said persons. Being aggrieved against the said order, the petitioner filed three criminal writ petitions before the High Court. The petitioner submitted the following before the High Court- • Daak International Private Limited was active but not filed its returns from March 2019 onwards, GSTR-1, GSTR-3B and GSTR 9. • The said company was not discharging its GST liability and was suppressing material fact....
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....s from the petitioner. • The said company was incorporated in March 2018 and remained in operation till December 2018. The said company stopped in filing returns from March 2019 onwards. • The investigation revealed that they had evaded more than Rs.8 crores of tax by availing ineligible Input tax credit and passed on to their recipients by circular trading, during their operation for 10 months. • The order of ASJ directing the service one week's advance notice upon the respondents, is erroneous in law. • The economic offences involving deep-rooted conspiracies and causing huge loss of public funds affecting the economy of the country as a whole, thereby posing a serious threat to its fina....
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....ncial health. • The applicant must demonstrate that he has reason to believe that he may be arrested, and such belief must be founded on reason to believe that he may be arrested and such belief must be founded on reasonable grounds. • An order of anticipatory bail should not be a blanket order and must be confined to the particular offence or incident in respect of which the apprehension of arrest is expressed and cannot be extended to cover all future or unspecified offences. • The ASJ failed to take into account that for effecting the arrest of any person under the provisions of GST Act, a prior written approval of the Commissioner CGST is required. There was no apprehension of arrest of the respond....
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....ents. • The respondents did not participate in the investigation process. The investigation is at the initial stage and crucial one since a substantial amount of revenue is involved and a fraud is alleged to have been committed. In view of the above, the petitioner prayed the High Court to set aside the impugned orders of ASJ. The respondents contended that they had appeared before the petitioner and produced all relevant documents and also undertook to appear before the petitioner and join the investigation. There is no infirmity in the impugned orders. The respondents prayed for the dismissal of the three writ petitions filed the petitioner. The High Court considered the submissions of the parties to the petition. Th....
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....e High Court observed that the petitioner has reasons to believe that any fraud is committed by a company, it has the statutory right to conduct an investigation and on detection of fraud, to proceed against the persons responsible in accordance with the law. The High Court further observed that the petitioner contended that no proposal has been placed before the Commissioner seeking the arrest of the respondents. The petitioner only issued summons and the investigation is carried out. The High Court considered that in the present case there was no imminent threat of arrest and therefore there was no case for anticipatory bail was made out. The ASJ, while dismissing the anticipatory bail applications merely directed the petitioner that s....
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....even days' prior notice is to be given before taking any coercive action, which is in consonance with the principles of Natural Justice and affords the respondents an opportunity to avail their remedies in accordance with law, in the event of any apprehension of arrest. The High Court held that no blanket protection has been granted to the respondents; rather specific directions have been issued to them directing to appear before the petitioner and join the investigation. The ASJ only directed to give seven days' notice to the petitioner, in the event of taking any coercive action against the respondents. The High Court dismissed the writ petitions since there is no merit. =============<br> Scholarly articles for knowledge sharing by ....
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