Syed Asif Ali VS State of U.P

Sri Praveen Kumar, learned counsel for the applicant – Syed Asif Ali, Sri D.C. Mathur, learned counsel for respondent no. 2 – Director General of GST, and Sri Nagendra Srivastava, learned AGA for the State-respondent no. 1 Sri Mathur submits that there is a technical error in impleading Union of India through the Director General of GST whereas Union of India is to be impleaded through Secretary, Revenue to Union of India and Director General of GST is a separate entity

Sri Praveen Kumar, learned counsel for the applicant Syed Asif Ali, Sri D.C. Mathur, learned counsel for respondent no. 2 Director General of GST, and Sri Nagendra Srivastava, learned AGA for the State-respondent no. 1 were present Sri Mathur submits that there is a technical error in impleading Union of India through the Director General of GST whereas Union of India is to be impleaded through the Secretary, Revenue to Union of India and Director General of GST is a separate entity Sri Praveen Kumar undertakes to rectify this technical error by filing an appropriate application for amendment

Sri Praveen Kumar, learned counsel for the applicant Syed Asif Ali, Sri D.C. Mathur, learned counsel for respondent no. 2 – Director General of GST, and Sri Nagendra Srivastava, learned AGA for the State-respondent no. 1 were present. Sri Mathur submits that there is a technical error in impleading the Union of India through the Director General of GST, whereas the Union of India is to be impleaded through the Secretary, Revenue to the Union of India, and the Director General of GST is a separate entity. Sri Praveen Kumar undertakes to rectify this technical error by filing an appropriate application for amendment. This application for the grant of anticipatory bail has been filed by the applicant on the basis of the apprehension that earlier summons were issued to one of the Directors of M/S BCC Cement Pvt. Ltd., which is a trading company, and in pursuance of the said summons dated January 21, 2021, the concerned Director who had approached the authorities was arrested. It is submitted that M/s BCC Cement Pvt. Ltd. is a trading company that procures cement from different manufacturers and supplies it to builders/purchasers. It is submitted that as per information available with the applicant, who is a Director of one of the purchaser companies, namely, Roshan Real Estate Pvt. Ltd., which has been purchasing cement from M/s BCC Cement Pvt. Ltd., has been summoned by issuance of summons in April 2021

Sri Praveen Kumar, learned counsel for the applicant – Syed Asif Ali, Sri D.C. Mathur, learned counsel for respondent no. 2 – Director General of GST, Sri Nagendra Srivastava, learned AGA for the State-respondent no. 1

Sri Mathur submits that there is technical error in impleading Union of India through Director General of GST whereas Union of India is to be impleaded through Secretary, Revenue to Union of India and Director General of GST is a separate entity

Sri Praveen Kumar undertakes to rectify this technical error by filing appropriate application for amendment

This application for grant of anticipatory bail application has been filed by the applicant on the basis of apprehension that earlier summons were issued to one of the Directors of M/S BCC Cement Pvt. Ltd, which is a trading company and in pursuance of said summons dated 21.1.2021 the concerned Director who had approached the authorities was arrested It is submitted that M/s BCC Cement Pvt Ltd is a trading company which procures cement from different manufacturers and supply to builders / purchasers It is submitted that as per information available, with the applicant who is a Director of one of the purchaser companies namely, Roshan Real Estate Pvt. Ltd and which has been purchasing cement from M/s BCC Cement Pvt. Ltd has been summoned by issuance of summons in April, 2021

It is submitted that allegation on M/s BCC Cement Pvt Ltd is in regard to defalcation in accounting of input tax credit and it is alleged that M/s BCC Cement Pvt Ltd neither procured any cement nor supplied it but has generated false and fabricated invoices so to take advantage of input credit

Counsel for the applicant submits that now proceedings have been initiated under section 74 of the Central Goods Service Tax, 2017 (hereinafter referred to as the Act only) for

Sri Praveen Kumar, the learned counsel for the applicant, Syed Asif Ali, Sri D.C. Mathur, the learned counsel for respondent no. 2, Director General of GST, and Sri Nagendra Srivastava, the learned AGA for the State-respondent no. 1, appeared before the court; Sri Mathur pointed out a technical error in the petition, noting that the Union of India was wrongly impleaded through the Director General of GST instead of the Secretary, Revenue to the Union of India, stating that the Director General of GST is a separate entity; Sri Praveen Kumar assured the court that this technical error would be rectified by filing an appropriate application for amendment; this application for anticipatory bail was filed by the applicant due to an apprehension arising from earlier summons issued to one of the Directors of M/S BCC Cement Pvt. Ltd., a trading company, who was arrested after approaching the authorities in response to the summons dated January 21, 2021; it was submitted that M/s BCC Cement Pvt. Ltd. procures cement from various manufacturers and supplies it to builders or purchasers, and the applicant, a Director of one of the purchasing companies, Roshan Real Estate Pvt. Ltd., which had been buying cement from M/s BCC Cement Pvt. Ltd., was summoned in April 2021; the allegation against M/s BCC Cement Pvt. Ltd. pertains to defalcation in accounting for input tax credit, with claims that the company neither procured nor supplied cement but generated false invoices to benefit from input tax credit; the counsel for the applicant argued that proceedings have now been initiated under section 74 of the Central Goods Service Tax, 2017 (the Act) for determining tax not paid, short-paid, erroneously refunded, or input tax credit wrongly availed or utilized due to fraud or willful misstatement or suppression of facts, and asserted that no proceedings can be undertaken to arrest the applicant under section 69 of the Act during such determination.

Sri Praveen Kumar, learned counsel for the applicant – Syed Asif Ali, Sri D.C. Mathur, learned counsel for respondent no. 2 – Director General of GST, and Sri Nagendra Srivastava, learned AGA for the State-respondent no. 1, were present Sri Mathur submitted that there is a technical error in impleading Union of India through Director General of GST whereas Union of India should be impleaded through Secretary, Revenue to Union of India, and Director General of GST is a separate entity Sri Praveen Kumar undertook to rectify this technical error by filing an appropriate application for amendment This application for grant of anticipatory bail was filed by the applicant based on the apprehension that earlier summons were issued to one of the Directors of M/S BCC Cement Pvt. Ltd, a trading company, and in pursuance of the said summons dated 21.1.2021, the concerned Director who approached the authorities was arrested It was submitted that M/s BCC Cement Pvt Ltd is a trading company that procures cement from different manufacturers and supplies it to builders/purchasers and as per the information available with the applicant, who is a Director of one of the purchaser companies, namely, Roshan Real Estate Pvt. Ltd, which has been purchasing cement from M/s BCC Cement Pvt. Ltd, has been summoned by issuance of summons in April 2021 It was submitted that the allegation on M/s BCC Cement Pvt Ltd is regarding defalcation in accounting of input tax credit and it is alleged that M/s BCC Cement Pvt Ltd neither procured any cement nor supplied it but has generated false and fabricated invoices to take advantage of input credit Counsel for the applicant submitted that proceedings have now been initiated under section 74 of the Central Goods Service Tax, 2017 (the Act) for determination of tax, not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any willful misstatement by suppression of facts, and for such determination, no proceedings can be undertaken to arrest the applicant in terms of the provisions contained in section 69 of the Act Sri Mathur, in his turn, submitted that summons have been issued invoking authority under section 70 of the Act He further submitted that the purpose of issuance of summons is to enable a party to give evidence and produce documents in support of their claims, and once such documents are procured, only then will the question of initiating proceedings under chapter XV, which deals with demand and recovery, come into action Sri Mathur submitted that merely summoning one of the Directors of the purchaser company cannot be construed as an intention on the part of the summoning authority to arrest the Director, as the decision to arrest can only be taken after the determination of liability, and thereafter, action is to be taken in terms of the provisions contained in Section 132 of the Act.

1. Sri Praveen Kumar, learned counsel for the applicant – Syed Asif Ali, Sri D.C. Mathur, learned counsel for respondent no. 2 – Director General of GST, Sri Nagendra Srivastava, learned AGA for the State-respondent no. 1

2. Sri Mathur submits that there is a technical error in impleading Union of India through Director General of GST whereas Union of India is to be impleaded through Secretary, Revenue to Union of India and Director General of GST is a separate entity

3. Sri Praveen Kumar undertakes to rectify this technical error by filing an appropriate application for amendment

4. This application for grant of anticipatory bail has been filed by the applicant on the basis of apprehension that earlier summons were issued to one of the Directors of M/S BCC Cement Pvt. Ltd, which is a trading company and in pursuance of said summons dated 21.1.2021 the concerned Director who had approached the authorities was arrested, it is submitted that M/s BCC Cement Pvt Ltd is a trading company which procures cement from different manufacturers and supplies to builders/purchasers, it is submitted that as per information available with the applicant who is a Director of one of the purchaser companies namely, Roshan Real Estate Pvt. Ltd and which has been purchasing cement from M/s BCC Cement Pvt. Ltd has been summoned by issuance of summons in April, 2021

5. It is submitted that the allegation on M/s BCC Cement Pvt Ltd is in regard to defalcation in accounting of input tax credit and it is alleged that M/s BCC Cement Pvt Ltd neither procured any cement nor supplied it but has generated false and fabricated invoices so to take advantage of input credit

6. Counsel for the applicant submits that now proceedings have been initiated under section 74 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the Act only) for determination of tax, not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any wilful misstatement by suppression of facts and for such determination no proceedings can be undertaken to arrest the applicant in terms of the provisions contained in section 69 of the Act

7. Sri Mathur in his turn submits that summons have been issued invoking authority under section 70 of the Act, he further submits that the purpose of issuance of summons is to enable a party to give evidence and produce documents in support of their claims and once such documents are procured then only the question of initiating proceedings under chapter XV which deals with demand and recovery, will come into action

8. Sri Mathur submits that merely summoning one of the Directors of the purchaser company cannot be construed to be an intention on the part of the summoning authority to arrest the Director in as much as to arrest or not can be taken only on determination of liability, thereafter action is to be taken in terms of the provisions contained in Section 132 of the Act

9. Sri Mathur, however, submits that section 139 of the Act provides for compounding of offence and therefore the whole scheme of the Act is such that an officer not below the rank of Joint Commissioner, if has reasons to believe that a person has suppressed any taxable transaction then such officer is authorized under Section 67 of the Act, to carry out inspection, search and seizure, Sub para (a) and (b) of Section 67 of the Act are reproduced as under: (a) a taxable person has suppressed any transaction relating to the supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act.

Sri Praveen Kumar, learned counsel for the applicant Syed Asif Ali, Sri D.C. Mathur, learned counsel for respondent no. 2 Director General of GST, Sri Nagendra Srivastava, learned AGA for the State-respondent no. 1 Sri Mathur submits that there is a technical error in impleading Union of India through Director General of GST whereas Union of India is to be impleaded through Secretary, Revenue to Union of India and Director General of GST is a separate entity Sri Praveen Kumar undertakes to rectify this technical error by filing an appropriate application for amendment This application for grant of anticipatory bail has been filed by the applicant on the basis of apprehension that earlier summons were issued to one of the Directors of M/S BCC Cement Pvt Ltd, which is a trading company and in pursuance of said summons dated 21.1.2021 the concerned Director who had approached the authorities was arrested It is submitted that M/s BCC Cement Pvt Ltd is a trading company which procures cement from different manufacturers and supplies it to builders and purchasers It is submitted that as per information available, the applicant who is a Director of one of the purchaser companies namely, Roshan Real Estate Pvt Ltd and which has been purchasing cement from M/s BCC Cement Pvt Ltd has been summoned by issuance of summons in April 2021 It is submitted that the allegation on M/s BCC Cement Pvt Ltd is in regard to defalcation in accounting of input tax credit and it is alleged that M/s BCC Cement Pvt Ltd neither procured any cement nor supplied it but has generated false and fabricated invoices to take advantage of input credit Counsel for the applicant submits that proceedings have now been initiated under section 74 of the Central Goods and Services Tax, 2017 (hereinafter referred to as the Act only) for determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any wilful misstatement by suppression of facts and for such determination no proceedings can be undertaken to arrest the applicant in terms of the provisions contained in section 69 of the Act Sri Mathur submits that summons have been issued invoking authority under section 70 of the Act He further submits that the purpose of issuance of summons is to enable a party to give evidence and produce documents in support of their claims and once such documents are procured then only the question of initiating proceedings under chapter XV which deals with demand and recovery, will come into action Sri Mathur submits that merely summoning one of the Directors of the purchaser company cannot be construed to be an intention on the part of the summoning authority to arrest the Director in as much as to arrest or not can be taken only on determination of liability, thereafter action is to be taken in terms of the provisions contained in Section 132 of the Act Sri Mathur submits that section 139 of the Act provides for compounding of offence and therefore the whole scheme of the Act is such that an officer not below the rank of Joint Commissioner, if has reasons to believe that a person has suppressed any taxable transaction then such officer is authorized under Section 67 of the Act, to carry out inspection, search and seizure Sub para (a) and (b) of Section 67 of the Act are reproduced as under (a) a taxable person has suppressed any transaction relating to supply of goods or services or the stock of goods in hand or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act or (b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act It is submitted that the power to summon is not equivalent to arrest or punish and the power of arrest is to be exercised only after determination of the liability in terms of the provisions contained in the Act.

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