Individual avoiding appearance before competent authority without any just excuse cannot escape coercive action including arrest

Directorate General of GST Intelligence Vs Pankaj Agarwal (Jharkhand High Court)

Individual avoiding appearance before competent authority without any just excuse cannot escape coercive action including arrest

Hon’ble High Court of Jharkhand by an order dated July 09, 2021, observed that section 69 read with section 70 of the Central Goods and Services Tax Act, 2017 (CGST Act) does not imply that the competent authority cannot take coercive action against an individual who is avoiding appearance without any just excuse before the competent authority even after issuance of a dozen summons.

The Directorate General of GST Intelligence (“the Petitioner”) filed the present contempt case through Senior Intelligence Officer against the violation of directions issued by the Hon’ble High Court of Jharkhand by an order dated February 21, 2019. In the said order a batch of writ petitions were disposed off and the Court directed the Petitioner that they shall appear before the Senior Intelligence Officer who has issued summons to them as and when called, further, they shall not be arrested on the first day when they appear before him.

Pankaj Agarwal (“the Respondent”), did not appear before the Senior Intelligence Officer and failed to produce necessary documents and tender other evidences. The Petitioner contended that he was reluctant to proceed against the Respondent because of observation of the High Court that he shall not be arrested on first day of his appearance before the Competent Authority.

The Hon’ble High Court of Jharkhand concluding on the issue, held that- whether Competent Authority had misconstrued the observations made by the High Court in order dated February 21, 2019 held that it is well-settled in law that any one intentionally avoiding the mandate in law is not entitled for any protection in law.

The Hon’ble High court held that Section 69 read with section 70 of the CGST Act does not immune an individual from coercive action of the competent authority including his arrest and the competent authority has the liberty to proceed in matter in accordance with law if an individual avoids appearance without any just excuse before the competent authority even after issuance of a dozen summons.

FULL TEXT OF THE JUDGMENT/ORDER OF JHARKHAND HIGH COURT

These contempt cases are filed by the Directorate General of GST Intelligence, through Senior Intelligence Officer.

2. By a common order dated 21.02.2019, a batch of writ petitions was disposed of with the following direction/observation:

“9. In view of the clear statutory provisions under section 69 read with section 70 of the Central Goods and Services Tax Act, 2017 and the stand taken in paragraph no. 25 of the counter-affidavit, these writ petitions are disposed of with a direction to the petitioners that they shall appear before the Senior Intelligence Officer who has issued summons to them as and when called and, of course, they shall not be arrested on the first day when they appear before him. It needs no reiteration that the Senior Intelligence Officer shall act fairly and his actions must demonstrate fairness in action.”

3. Mr. Ratnesh Kumar, the learned counsel for the petitioner Directorate General of GST Intelligence submits that in flagrant violation of the directions issued by this Court the writ petitioners did not appear before the Senior Intelligence Officer and have failed to submit necessary documents and tender other evidences and, therefore, the present contempt cases against the individual writ petitioner(s).

4. The learned counsel for the petitioner would further elaborate upon the issue with reference to the observation in paragraph no.8 of the order dated 21.02.2019 by saying that the Directorate is reluctant to proceed against the individuals because of observation of the writ Court that they shall not be arrested on the first date of their appearance before the Senior Intelligence Officer.

5. Paragraph no.8 of the order dated 21.02.2019 reads as under:

“8. When the summons issued to the petitioners are examined on a conjoint reading of section 69 and section 70 of the Central Goods and Services Tax Act, 2017, it becomes apparent that under section 69 it is the Commissioner who, if he has reasons to believe, can by an order authorize any officer of Central Tax to arrest an assessee. Therefore, the Senior Intelligence Officer who has issued summons to the petitioners cannot arrest the assessee before the Commissioner records his satisfaction on “reasons to believe” and pass an order authorizing him to affect arrest of the assessee.”

6. From the aforesaid, it would appear that the writ Court formed an opinion on a conjoint reading of sections 69 and 70 of the Central Goods and Services Tax Act, 2017 that the Senior Intelligence Officer is not authorized to arrest an individual to whom he had issued summons on the first date of his appearance. It is certainly not the import of section 69 read with section 70 of 2017 Act that an individual who is avoiding appearance before the authority without any just excuse can claim that even if he appears after a dozen summons the authority cannot take coercive action against him, including his arrest.

7. In my opinion, the Directorate has misread and misconstrued the observations in paragraph nos. 8 and 9 of the order dated 21.02.2019. It is well-settled in law that any one intentionally avoiding the mandate in law is not entitled for any protection in law – but, there should be a finding on the issue.

8. These contempt cases stand disposed of with the aforesaid observations. Needless to say that the petitioner-Directorate can proceed in the matter in accordance with law.

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