Rohit Goel VS Additional Director General

The petitioner has approached the court seeking a writ of mandamus, which is a judicial remedy in the form of an order from a court to any government, subordinate court, corporation, or public authority to do or forbear from doing some specific act. In this case, the petitioner requests the court to direct the respondents to refund a substantial amount of Rs. 9.39 lakhs. This amount was collected from the petitioner’s residence on March 14, 2019. At the time the petitioner filed the Writ Petition, the legal proceedings concerning this matter were at a very early stage. Importantly, no show cause notice, which is a preliminary order asking the recipient to justify why a particular action should not be taken, had been issued. Additionally, no order of assessment, which is typically an evaluation or determination of tax liability or another similar obligation, had been passed by the authorities.

Parallel to this Writ Petition, the petitioner is also a Director in a company that has filed multiple Writ Petitions. These are identified as W.P.Nos.33864, 13289, and 13281 of 2019. In the first two petitions, the company is seeking a writ of mandamus, similar to the petitioner’s request. The objective of these petitions is to compel the respondents to initiate proceedings, presumably in relation to some form of compliance or action that the company believes the respondents are obligated to undertake.

The third petition (W.P.No.13281 of 2019) involves a request for a certiorarified mandamus. This is a more complex judicial order that combines two legal remedies: certiorari and mandamus. Certiorari is an order by which a higher court reviews a decision of a lower court or a quasi-judicial body, usually for the purpose of correcting a jurisdictional error. When combined with mandamus, the petitioner is asking the court not only to review and potentially quash a decision or action taken by the respondents but also to issue a directive compelling the respondents to perform a specific duty.

These writ petitions collectively reflect a broader legal strategy by the petitioner and the company to address grievances related to actions or inactions by the respondents, possibly in the context of tax collection or other regulatory matters. The focus is on ensuring that any actions taken by the respondents are legally justified and that any obligations imposed on the petitioner or the company are assessed and executed in a manner consistent with the law.

In this case, the petitioner sought a writ of mandamus, a judicial remedy that compels a public authority to perform a mandatory duty, requesting the court to direct the respondents to refund an amount of Rs. 9.39 lakhs, which was collected from the petitioner’s residence on March 14, 2019. At the time the Writ Petition was filed, the legal proceedings were still at an early stage, with no show cause notice or assessment order having been issued by the authorities.

Simultaneously, the company in which the petitioner is a Director had filed several Writ Petitions (W.P.Nos.33864, 13289, and 13281 of 2019). In two of these petitions, the company also sought a mandamus, requesting the respondents to initiate assessment proceedings under Sections 73/74 of the Central Goods and Services Tax Act, 2017 (referred to as the “Act”). Additionally, they sought a refund of the amount collected from the company during the investigation. The third petition, seeking a certiorarified mandamus, challenged an order related to the attachment of the company’s bank account, which was imposed even before the legal proceedings were concluded.

These Writ Petitions were resolved by a common order on January 6, 2020. In this order, the court directed the respondents to complete the assessments within a specified time frame. As for the refund, the court held that it would be contingent upon the outcome of the anticipated assessment.

Subsequently, the revenue authorities filed Writ Appeals (W.A.Nos.170 and 172 of 2020) challenging the order dated January 6, 2020. The appellate court, however, confirmed the original order but extended the deadline for completing the assessment proceedings by three months from the date of their order, as noted in paragraph 5 of the order dated October 13, 2020.

In light of the respondents’ failure to adhere to the extended timelines set by the Division Bench, the petitioner filed Contempt Petitions, alleging non-compliance with the court’s directives. The respondents, in turn, filed sub-applications in response to these Contempt Petitions. The contempt proceedings, therefore, stemmed from the alleged non-fulfillment of the court-ordered timelines for completing the assessment and addressing the refund claim.

On February 25, 2022, a Division Bench addressed and disposed of both the contempt petitions and the sub-applications filed by the respondents. The contempt petitions were originally filed by the petitioner, alleging that the respondents had failed to adhere to the deadlines previously set by the court for completing the assessment proceedings. The respondents, in their sub-applications, had requested additional time to complete these proceedings.

In their order, the Division Bench took a balanced view of the situation. They concluded that the respondents had not willfully disregarded the court’s timelines. Instead, the delays were primarily attributed to the extraordinary circumstances brought about by the Covid-19 pandemic, which had significantly disrupted normal operations and caused widespread delays across various sectors, including the legal and administrative processes.

Given the context of the pandemic and its impact, the Bench decided to grant additional time for the completion of the assessment proceedings. Specifically, in paragraph 8 of the order, the Division Bench set a final and outer time limit of four months from the date the respondents received a copy of this order to complete the pending assessment. This was done to ensure that despite the delays, the proceedings would be concluded within a reasonable and defined period.

It is important to note that the respondents, in their sub-applications, had also accused the petitioner of contributing to the delays in the assessment process. They alleged that the petitioner had not been cooperative and had caused further delays in the finalization of the assessment proceedings. Despite these allegations, the court focused on ensuring that the assessment was completed within the extended timeframe.

The respondents officially received the Division Bench’s order on April 8, 2022. Accordingly, the four-month period granted by the court was to begin from that date, setting the final deadline for the completion of the assessment on August 8, 2022.

However, the situation became more complicated when it was discovered that there was an additional two-month delay in forwarding the court’s order to the concerned Assessing Officer responsible for carrying out the assessment. This delay further pushed back the timeline for completing the proceedings. When the respondents were asked to provide an explanation for this delay, they failed to offer a satisfactory or acceptable reason. The panel counsel representing the respondents could not justify why it took so long to transmit the order to the appropriate officer, indicating a potential lapse in the efficiency or diligence of the respondents’ handling of the matter.

Despite these setbacks, the court’s primary concern remained the timely completion of the assessment proceedings. The delays, while noted, did not absolve the respondents of their responsibility to meet the extended deadline. The court’s orders were clear in establishing a final timeline, and the expectation was that this would be adhered to, ensuring that the assessment process was brought to a conclusion without further unnecessary delays.

In this case, the Division Bench of the court addressed a series of procedural and substantive issues concerning the petitioner’s claims and the actions of the respondents, particularly focusing on compliance with previous court orders and the handling of assessment proceedings.

On February 25, 2022, the Division Bench disposed of the Sub-Applications, along with the contempt petition filed by the petitioner, who alleged that the respondents had failed to comply with the deadlines previously set by the court for completing assessment proceedings. The Bench found that there was no willful non-compliance by the respondents and that the delays were largely due to the extraordinary circumstances caused by the Covid-19 pandemic, which had disrupted normal operations across various sectors, including the judiciary and administrative functions.

Taking into account both the petitioner’s concerns and the respondents’ request for additional time, the Bench established a new deadline for the completion of the assessment proceedings. This deadline was set as four months from the date the respondents received a copy of the court’s order. The respondents received this order on April 8, 2022, which meant that the final deadline for completing the assessment would expire on August 8, 2022.

However, the process encountered further complications when it was revealed that there had been an additional two-month delay in forwarding the order to the relevant Assessing Officer, which was critical for the completion of the assessment. When questioned about this delay, the respondents, represented by their panel counsel, failed to provide an acceptable explanation. The court expressed its displeasure with this lack of diligence, noting that the respondents, who held significant positions as Additional Director General and Senior Intelligence Officer of the Directorate General of Goods and Services Tax Intelligence, had not shown the level of care and attention expected of them in complying with the court’s directives.

As a consequence of this delay, the court imposed a penalty on the respondents, ordering them to pay a sum of Rs. 50,000 to the Cancer Institute, Adyar, Chennai, within two weeks. This penalty served as a measure to address the respondents’ failure to act promptly and to underline the importance of adhering to judicial orders.

Moving forward, the court then turned its attention to the remaining issue of the petitioner’s request for a mandamus, specifically concerning the refund of Rs. 9.39 lakhs collected from his residence on March 14, 2019. The petitioner argued that, according to the provisions of Section 67 of the Central Goods and Services Tax Act, 2017 (CGST Act), particularly Section 67(2), second proviso, and Section 67(3), the collected amount should be returned. The petitioner’s position was based on the fact that the amount had not been appropriated towards any demand quantified under the show cause notice issued on July 31, 2021.

On the other hand, the counsel for the respondents contended that the amount should be retained until the completion of the ongoing proceedings. The respondents believed that this interpretation was clear from a straightforward reading of the relevant sections of the Act, which they argued justified the retention of the amount pending the final outcome of the assessment process.

The court was thus faced with the task of interpreting these provisions in light of the specific circumstances of the case, balancing the petitioner’s right to a refund against the respondents’ statutory powers to retain amounts during the course of investigations and assessments. The court’s decision on this matter would hinge on a detailed examination of the relevant legal provisions and the specific facts of the case, particularly the actions taken by both parties throughout the proceedings.

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