Case Title | JSK Marketing Limited Vs. Union of India |
Court | Jharkhand High Court |
Honourable judges | Justice Ujjal Bhuyan Justice Milind N. Jadhav |
Citation | 2021 (02) GSTPanacea 190 HC Bombay WRIT PETITION (L) NO.5000 OF 2020 |
Judgment Date | 16-February-2021 |
Heard Mr. Mathew Nedumpara along with Ms. Nikita Panhalkar, Advocates for the petitioners; Mr. Pradeep Jetly, senior counsel along with Mr. J.B. Mishra, Advocate for respondent Nos.1 to 4; and Mr. Rahul Punjabi, Advocate for respondent No.5. By this petition filed under the provisions of Articles 226 and 227 of the Constitution of India, the petitioners have, inter alia, sought a stay of proceedings and consequential penal action initiated against them pursuant to the issuance of summons dated 03.04.2019 by the Intelligence Officer in the office of the Directorate of GST Intelligence under section 83 of the Finance Act, 1994 (“the Finance Act” for short), read with section 14 of the Central Excise Act, 1944. The petitioners have argued that the summons and subsequent actions are arbitrary, unconstitutional, and infringe upon their fundamental rights. The petitioners claim that the proceedings initiated are without sufficient legal basis and have been conducted in a manner that violates the principles of natural justice. They assert that the summons issued by the Directorate of GST Intelligence lacks clarity and specificity regarding the allegations against them, which has hindered their ability to effectively respond and defend themselves. Moreover, the petitioners contend that the invocation of section 83 of the Finance Act, which deals with the provisional attachment of property to protect the interest of revenue, is grossly misapplied in their case. They argue that the conditions precedent for invoking such drastic measures are not met, as there is no immediate or substantial risk to the revenue that would justify such an action. The petitioners also highlight that section 14 of the Central Excise Act, 1944, which empowers the authorities to summon any person to give evidence or produce documents, has been used in an overreaching manner, causing undue harassment and prejudice to their business operations and reputation. In addition to questioning the procedural aspects of the summons and the subsequent actions, the petitioners argue that there has been a failure to follow due process and statutory guidelines in the conduct of the investigation. They allege that there has been a lack of transparency and fairness in the proceedings, with the authorities not providing adequate opportunity for the petitioners to present their case or rebut the allegations made against them. Furthermore, the petitioners assert that the penalties and actions threatened under these proceedings are disproportionate and unjust, given the nature of the alleged infractions. They argue that the respondents have not demonstrated any substantial or willful non-compliance on the part of the petitioners that would warrant such severe penal measures. The petitioners urge this Hon’ble Court to exercise its writ jurisdiction to protect their rights and prevent the abuse of power by the respondent authorities. They seek an immediate stay on all proceedings and penal actions initiated pursuant to the impugned summons dated 03.04.2019, and they request that the Court issue directions to the respondents to conduct any further proceedings in a fair, transparent, and legally compliant manner. The petitioners also request the Court to quash the impugned summons and any consequent actions taken by the respondents, asserting that the actions are ultra vires and lack substantive legal justification. The petitioners emphasize that the exercise of judicial review is essential to ensure that administrative actions are not arbitrary and are conducted within the bounds of law. They contend that the intervention of this Hon’ble Court is necessary to uphold the rule of law and protect the petitioners from unwarranted and excessive executive actions. In conclusion, the petitioners pray for the issuance of a writ of certiorari or any other appropriate writ, order, or direction to quash the summons dated 03.04.2019 issued by the Intelligence Officer in the office of the Directorate of GST Intelligence and to restrain the respondents from taking any further coercive or penal action against the petitioners based on the said summons. They further seek any other relief that this Hon’ble Court deems fit and proper in the interest of justice.
Heard Mr. Mathew Nedumpara along with Ms. Nikita Panhalkar, Advocates for the petitioners; Mr. Pradeep Jetly, senior counsel along with Mr. J.B. Mishra, Advocate for respondent Nos.1 to 4; and Mr. Rahul Punjabi, Advocate for respondent No.5. By this petition filed under the provisions of Articles 226 and 227 of the Constitution of India, the petitioners have, inter alia, sought a stay of proceedings and consequential penal action initiated against them pursuant to the issuance of summons dated 03.04.2019 by the Intelligence Officer in the office of the Directorate of GST Intelligence under section 83 of the Finance Act, 1994 (“the Finance Act” for short), read with section 14 of the Central Excise Act, 1944 (“the Central Excise Act” for short) and section 174 of the Central Goods and Services Tax Act, 2017 (“the CGST Act” for short) to tender oral evidence and further summons dated 15.04.2019, 31.10.2019, 04.08.2020 and 12.10.2020 under section 83 of the Finance Act read with section 14 of the Central Excise Act and section 174 of the CGST Act to tender oral/documentary evidence in respect of evasion of goods and services tax (GST). The petitioners contend that these summons and subsequent actions are arbitrary, unconstitutional, and infringe upon their fundamental rights. They assert that the proceedings initiated are without sufficient legal basis and have been conducted in a manner that violates the principles of natural justice. The petitioners argue that the summons issued by the Directorate of GST Intelligence lacks clarity and specificity regarding the allegations against them, which has hindered their ability to effectively respond and defend themselves.
Petitioner No.1 is a company registered under the Companies Act, 1956, and is engaged in the business of trading in consumer goods, FMCG products, cameras, batteries, etc., for the last 34 years. Petitioner No.2 is the Managing Director of petitioner No.1. The petitioners claim that the proceedings have been initiated in a manner that causes undue harassment and prejudice to their business operations and reputation. They argue that the invocation of section 83 of the Finance Act, which deals with the provisional attachment of property to protect the interest of revenue, is grossly misapplied in their case. They contend that the conditions precedent for invoking such drastic measures are not met, as there is no immediate or substantial risk to the revenue that would justify such an action.
Additionally, the petitioners argue that section 14 of the Central Excise Act, 1944, which empowers the authorities to summon any person to give evidence or produce documents, has been used in an overreaching manner. They highlight that there has been a failure to follow due process and statutory guidelines in the conduct of the investigation. They allege that there has been a lack of transparency and fairness in the proceedings, with the authorities not providing adequate opportunity for the petitioners to present their case or rebut the allegations made against them.
The petitioners also emphasize that the penalties and actions threatened under these proceedings are disproportionate and unjust, given the nature of the alleged infractions. They argue that the respondents have not demonstrated any substantial or willful non-compliance on the part of the petitioners that would warrant such severe penal measures. The petitioners urge this Hon’ble Court to exercise its writ jurisdiction to protect their rights and prevent the abuse of power by the respondent authorities. They seek an immediate stay on all proceedings and penal actions initiated pursuant to the impugned summons dated 03.04.2019, and they request that the Court issue directions to the respondents to conduct any further proceedings in a fair, transparent, and legally compliant manner.
In conclusion, the petitioners pray for the issuance of a writ of certiorari or any other appropriate writ, order, or direction to quash the summons dated 03.04.2019 and the subsequent summonses issued by the Intelligence Officer in the office of the Directorate of GST Intelligence, and to restrain the respondents from taking any further coercive or penal action against the petitioners based on these summonses. They further seek any other relief that this Hon’ble Court deems fit and proper in the interest of justice. This petition underscores the petitioners’ grievances against the procedural and substantive irregularities allegedly committed by the respondents in the adjudication and appellate proceedings, and seeks judicial redress to correct the alleged wrongs and uphold the rule of law.
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