Saurabh Mittal vs Union of India

This case revolves around an investigation led by the Senior Intelligence Officer of the Director General of GST, Ghaziabad Regional Unit (Respondent No. 3), who acted on intelligence reports suggesting that a group, in collaboration with some Custom House Agents (CHAs), was evading GST through fraudulent exports from fictitious firms. Searches were carried out at the alleged premises of M/s Heritage International in Delhi.

On November 27, 2021, a search was conducted at the office of Saurabh Mittal (the petitioner), during which documents related to his firms, M/s Akula Exports and M/s Vistar Exports, were seized. The investigation revealed that Tinku Yadav was allegedly behind the creation of fake firms and the availing of fraudulent Input Tax Credit (ITC). Yadav was arrested on November 29, 2021, and claimed to have acted under the instructions of Satish Jain and Govind Sharma.

In January 2022, statements from Jain and Sharma implicated the petitioner and others in the creation of fake firms. On January 25, 2022, further searches were conducted at the petitioner’s premises, and summons were issued to both the petitioner and his father under Section 70 of the CGST Act, 2017. Both appeared in response.

The petitioner argues that the jurisdiction of Meerut for the investigation, instead of Delhi, is questionable. They assert that this reflects an arbitrary approach by Respondent No. 3, suggesting that the investigation was conducted without adequate evidence connecting the petitioner and his father to the alleged fraud. It is also contended that the remand application for the petitioner’s father includes extensive allegations and recoveries but does not mention the petitioner. The petitioner argues that the statements by co-accused are vague, inadmissible, and lack corroborative evidence, thus rendering them insufficient for implicating the petitioner according to legal precedents established by the Supreme Court

**Summary of Submissions:**

The petitioner has presented several points regarding their current situation and the circumstances surrounding their involvement in the case. They emphasize that due to ongoing medical treatment and a need for a hygienic environment and home-cooked food, they have not been actively involved in business activities for an extended period. Additionally, the petitioner’s elder brother suffers from mental retardation and relies heavily on family support. With the petitioner’s father under arrest and the petitioner facing intense scrutiny, the petitioner’s elderly mother is now the sole caregiver for the brother, placing significant strain on her due to her own frail health.

The petitioner contends that neither they nor their father were involved in the alleged fraudulent transactions. They argue that the evidence against them primarily consists of statements deemed incriminating but lacking substantial corroborative support. They claim their father’s arrest was conducted in an excessively harsh manner and assert that their own health condition—having undergone a liver transplant—makes them particularly vulnerable to further distress and harassment.

Furthermore, the petitioner highlights that the offences under the CGST Act are compoundable and not considered severe. They argue that since the evidence primarily consists of documents, their custodial interrogation is unnecessary. They point out that under Section 132 of the CGST Act, 2017, the maximum penalty is imprisonment for up to 5 years, in addition to a fine, suggesting that the offence, while economic in nature, does not warrant extreme measures such as prolonged detention.

The petitioner argues that while the punishment under the CGST Act cannot be disregarded when assessing the severity of the offence, the nature of the penalties suggests that the offences are not severe enough to justify custodial detention. They contend that the seriousness of the offences does not necessitate the accused’s custody as a condition for the ongoing investigation. Additionally, they argue that they should not be held vicariously liable for the defaults of a firm that they neither own nor have any managerial or executive role in.

The petitioner notes that following their father’s arrest, they received multiple summons from Respondent No. 3, DGGI, Ghaziabad Regional Unit, demanding their appearance on specific dates. The petitioner expresses concern that these summonses are used to infringe upon their liberty under the guise of an ongoing investigation. As a result, the petitioner has filed the current petition seeking relief from what they perceive as undue coercive actions by the respondents.

**Summary of Respondents’ Submissions:**

In contrast to the petitioner’s arguments, the learned senior standing counsel for the respondents contends that the investigation into the case is still in its early stages. They assert that the allegations against the petitioner are of a serious and grave nature. The respondents claim that the fraud in question involves approximately ₹350 crores and encompasses around 200 firms engaged in fraudulent Input Tax Credit (ITC) transactions.

The respondents argue that the scope of the fraud is not limited to Delhi but also extends to Ghaziabad and Noida. They highlight that the petitioner’s factory is located in Ghaziabad, refuting the petitioner’s claim that the choice of jurisdiction in Meerut is improper or unjustified. The respondents assert that this jurisdictional choice is appropriate given the widespread nature of the fraud.

Additionally, the respondents point out that Upender Singh, a bank official at ICICI Bank, Kamla Nagar, has provided a statement indicating that he had opened accounts for these 200 firms without conducting physical verification. This information is presented as evidence of the extensive fraudulent activity and the serious nature of the investigation.

Overall, the respondents maintain that the investigation is justified and that the allegations are significant, thereby supporting the continuation of their investigative and legal actions.