Suumaya Industries LTD. VS Union of India

After hearing the arguments presented by the counsel and ensuring that the rights and contentions of all parties involved remain open for future consideration, the court issued a consent order outlining specific procedures to be followed. The order mandates that all statements made by the Directors or Employees of the Petitioner, in response to summonses issued under the CGST Act, must be video recorded. This measure is intended to ensure transparency and accuracy in the documentation of these statements. The responsibility for the cost of this video recording falls on the Petitioner, emphasizing their role in facilitating this process. Additionally, the order provides that the individual whose statement is being recorded is allowed to have legal representation present in the form of an advocate. However, the advocate’s role is strictly limited to observing the process, and they are explicitly prohibited from interfering, interrupting, or otherwise influencing the proceedings. This provision aims to balance the individual’s right to legal counsel with the need to maintain the integrity of the statement recording process. The consent order represents a compromise between the parties, ensuring that their respective rights are preserved while establishing a clear framework for the recording of statements under the CGST Act.

After hearing the counsel and keeping all rights and contentions of the parties open, the court passed a consent order with several key directives aimed at addressing the ongoing legal proceedings. First, it was ordered that all statements made by the Directors or Employees of the Petitioner, in response to summons issued under the Central Goods and Service Tax (CGST) Act, are to be video recorded. The cost of this video recording is to be borne by the Petitioner. Additionally, the order permits the presence of an advocate during the recording of these statements. However, the advocate is strictly instructed not to interfere, interrupt, or disturb the process. The advocate may be seated at a visible distance but not within earshot of the proceedings.

Moreover, the court directed that copies of the panchanama related to inspection proceedings under Section 67 of the CGST Act be provided to the Petitioner within two weeks from the date the order is uploaded. This ensures that the Petitioner has access to all relevant documents pertaining to the inspection. Furthermore, Mr. Rastogi, representing the Petitioner, assured the court that all employees and directors of the Petitioner would fully cooperate with the authorities, emphasizing that the Petitioner has no intention of evading taxes.

In the course of the proceedings, Mr. Rastogi requested that the chairman and managing director not be summoned, suggesting instead that only the Chief Financial Officer (CFO) be called, as he is the person most familiar with the relevant details. Mr. Rastogi argued that the chairman and managing director, Mr. Ushik Gala, would not have knowledge of all the facts and circumstances. However, this request was opposed by Mr. Jetly, who pointed out that Mr. Ushik Gala had previously appeared and had his statement recorded. Mr. Jetly also noted that Mr. Ushik Gala is the managing director of another company, Suumaya Corporation Ltd., where a similar request had been made by the Petitioners.

In the matter concerning Writ Petition (Lodging) No. 26351 of 2021, the court revisited the conduct of Mr. Ushik Gala, the petitioner and managing director of the involved company, in the context of ongoing legal proceedings. Mr. Jetly, representing the opposing side, brought to the court’s attention that a similar request made by the petitioner’s counsel had previously been rejected by the court on November 17, 2021. In that earlier decision, the court had noted significant non-cooperation on the part of Mr. Ushik Gala during the investigation, to the extent that eight separate summonses had to be issued to secure his presence. This history of non-compliance was a key point in Mr. Jetly’s objection to any special considerations or exemptions being granted to Mr. Ushik Gala in the current proceedings.

Furthermore, the court examined the petition itself, which had been signed and verified by Mr. Ushik Gala. By signing and verifying the petition, Mr. Gala had affirmed under oath that the contents of paragraphs 1 to 30 of the petition were true to his knowledge. This affirmation led the court to conclude that Mr. Gala was indeed aware of the detailed facts and circumstances surrounding the case. As such, the court determined that there was no justification for exempting him from appearing before the concerned authorities. Instead, the court mandated that Mr. Ushik Gala must appear in person whenever summoned and must fully cooperate with the ongoing investigation.

The court also addressed the procedural aspects of the investigation, granting the authorities the discretion to summon the Chief Finance Officer (CFO) or any other relevant individual at an appropriate time, should their presence be deemed necessary for the investigation. The court emphasized that all individuals who are issued summonses, including Mr. Ushik Gala, are legally obligated to attend at the specified time and date without fail.

Additionally, the court touched upon the petitioner’s request for a refund, as outlined in prayer clause (ii) of the petition. The court directed that the petitioner is free to apply for the refund, and the authorities should evaluate the application in accordance with the applicable laws and regulations.

In conclusion, the court disposed of the petition, noting that no order as to costs would be issued, which means that each party is responsible for bearing its own legal expenses. The court’s decision reflects a balanced approach, ensuring that the petitioner fulfills his legal obligations while allowing the investigation to proceed without unnecessary hindrance.

In the context of the ongoing legal proceedings, it is important to note that the court has explicitly clarified that it has not expressed any opinions or judgments regarding the substantive merits of the case at hand. This clarification serves several purposes. Firstly, it underscores that the court’s current involvement and decisions are procedural in nature rather than conclusive with respect to the fundamental issues of the case. The court’s rulings and directives are intended to manage the procedural aspects of the case, such as the handling of summonses, the cooperation of involved parties, and the provision of documentation, rather than to adjudicate or make determinations on the underlying legal arguments or claims made by the parties involved.

By making this clarification, the court ensures that its procedural decisions should not be interpreted as indicative of any particular stance or perspective on the substantive legal questions that the case raises. This separation of procedural management from substantive adjudication is crucial for maintaining the impartiality of the court and ensuring that all parties have a fair opportunity to present their arguments and evidence in a manner that will be fully considered when the merits of the case are ultimately addressed.

The court’s clarification also serves to reaffirm its commitment to an unbiased and objective evaluation of the substantive issues once the procedural matters are resolved. It provides assurance to all parties involved that any judgments or decisions regarding the substantive merits of the case will be based solely on the comprehensive examination of the facts, evidence, and legal arguments presented, rather than influenced by the procedural rulings or interim orders issued throughout the course of the proceedings.

In summary, the court’s statement that it has not expressed any views on the merits of the matter highlights the distinction between procedural management and substantive adjudication. It emphasizes that the court’s current focus is on managing procedural aspects and ensuring fair process, while reserving judgment on the core legal issues until all relevant evidence and arguments have been fully considered.

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