Suresh Kumar P.P VS The Deputy Director

The petitioners, who are the Managing Director and Director of a company registered under the Companies Act and engaged in providing cable services as a Multi Service Operator (MSO) under the Telephone Regulatory Authority of India (TRAI) Regulations, have filed an appeal. They allege that illegal proceedings were initiated against them under the Central Goods and Services Tax Act, 2017 (CGST Act). The appellants claim that their residences and offices were raided, they were held in illegal custody, and an amount of one crore rupees was extorted from them.

They assert that they were released only after their advocate intervened at midnight. In their writ petition, the appellants seek the following reliefs:

1. Setting aside Exhibit P2 notice, which required them to provide information and was issued by the Senior Intelligence Officer (SIO).

2. Invalidation of the search and seizure proceedings initiated under Section 67 of the CGST Act, as evidenced by Exhibit P4.

3. Refund of the extorted amount of one crore rupees.

The appellants argue that the actions taken against them were illegal and violated their rights, necessitating judicial intervention to rectify the situation and provide them with the requested reliefs.

The appellants, the Managing Director and Director of a cable service company operating as a Multi-Service Operator (MSO) under the Telephone Regulatory Authority of India (TRAI) regulations, have filed an appeal challenging the actions taken against them under the Central Goods and Services Tax Act, 2017 (CGST Act). They allege that illegal proceedings were initiated, resulting in raids on their residences and offices, illegal detention, and extortion of one crore rupees. They claim they were released only after their advocate intervened at midnight.

In their writ petition, the appellants sought the following reliefs:

1. Quashing of a notice (Exhibit P2) issued by the Senior Intelligence Officer (SIO) demanding information.

2. Invalidation of the search and seizure actions under Section 67 of the CGST Act (Exhibit P4).

3. Refund of the extorted one crore rupees from the respondents.

4. Declaration that they are not liable to pay GST on the revenue share retained by the Local Cable Operator (LCO).

5. Compensation for reputational damage and mental anguish.

The learned Single Judge dismissed the writ petition as premature, citing a lack of evidence to substantiate the harassment allegations. The Judge found it inappropriate to form an opinion on the claims without supporting material and declined to exercise discretion under Article 226, thus denying the reliefs sought.

The appellants are now appealing against the Single Judge’s findings, presenting new documents that were issued during the investigation, including orders for attaching their bank accounts, which were not available at the time of the writ petition.

The appellants’ counsel, Sri. Mathai M. Paikeday, presented their case through video conferencing.

The petitioners, the Managing Director and Director of a company registered under the Companies Act and providing cable services as a Multi Service Operator (MSO) under the Telephone Regulatory Authority of India (TRAI) regulations, have filed an appeal. They claim that illegal proceedings were initiated against them under the Central Goods and Services Tax Act, 2017 (CGST Act), during which their residences and offices were raided. They allege that they were kept under illegal custody and that a sum of Rupees One Crore was extorted from them. Their release was purportedly secured only after their advocate intervened at midnight.

In their writ petition, the appellants sought the following:

1. The setting aside of Exhibit P2 notice, which required them to provide information as issued by the Senior Intelligence Officer (SIO).

2. The invalidation of the search and seizure proceedings initiated under Section 67 of the CGST Act, as evidenced by Exhibit P4.

3. A refund of the Rupees One Crore collected by the 4th and 5th respondents.

4. A declaration that they are not liable to pay GST on the revenue share retained by the Local Cable Operator (LCO).

5. Compensation for the damage to their reputation and the mental agony suffered.

The learned Single Judge dismissed the writ petition, deeming it premature, as there was no evidence to substantiate the claims of harassment. The Judge found it inappropriate to form an opinion on the allegations without supporting material and refused to exercise discretion under Article 226, thereby declining the reliefs sought.

In the appeal, the petitioners presented additional documents, which were issued during the investigation and included orders for the attachment of their bank accounts. These documents were presented for the first time on appeal, as the attachments were effected post the dismissal of the writ petition.

The court heard from Senior Counsel Sri. Mathai M. Paikeday (through video conferencing), instructed by Advocate Sri. Sandeep Gopalakrishnan, Sreelal N. Warrier, learned Standing Counsel for the Department and its officers, and Sri. Mohammed Rafiq, learned Counsel appearing for the State GST Department.

Senior Counsel Sri. Mathai M. Paikeday argued that the proceedings were illegal and caused significant hardship to the appellants due to the high-handed actions of the respondent officers, who exceeded their authority. He pointed out that an audit had been initiated under Section 65, evidenced by Exhibit P5 dated 15.05.2020, which was ongoing when the investigation under Section 67 was initiated without reasonable cause. The surprise raid, conducted early in the morning and ending at midnight, involved illegal detention of the appellants without basic amenities. The appellants were coerced into parting with Rupees One Crore, a payment evidenced by Exhibit P3, which was made under duress. Moreover, the seizure order in Exhibit P4 was argued to be beyond jurisdiction as it was based on the SIO’s unsatisfactory or unsubstantiated reasons to believe the documents annexed therein.

The appeal contended that the investigation and subsequent actions by the respondent officers were excessive and unjust, seeking a reassessment of the initial writ petition and the reliefs therein.

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