Saurabh Mittal Vs Union of India (Delhi High Court)
In the instant case, the allegations against the petitioner are of indulging in creation of numerous fake firms and availing an enormous Input Tax Credit fraudulently. The petitioner agrees and undertakes to appear before the officers and cooperate in the investigation, however, the main grievance of the petitioner is about the possibility of his arrest and detention to custody. But the objection of the respondents is that this Court cannot interfere with investigation by granting protection to the petitioner at this stage. It is trite law that at the stage of show cause notice, summons, chargesheet or notice to appear, constitutional courts would not interfere as to interject the proceedings and thereby, prevent the authorities from proceeding with.
Perusal of the various provisions of CGST Act which have been discussed in various judgments time and again demonstrate that the summons for appearance issued under Section 70 of the CGST Act and the authorization for arrest issued under Section 69 (1) of the CGST Act, do not fall within the ambit of the definition of “Criminal Proceedings”, because criminal proceeding commences, only after the launch of prosecution. It is pertinent to mention that Section 132 (1) of CGST Act lists out about twelve different types of offences under Clauses (a) to (l) and five out of these twelve offences are cognizable and non-bailable in view of Section 132 (5) of CGST Act and the remaining seven offences are non-cognizable and bailable in view of Section 132(4) of the CGST Act.
The sum and substance of the propositions of law, which could be culled out from the aforesaid decisions is as follows:
i. The summons under Section 70 of the CGST Act are to be issued only after inquiry is initiated and at the stage of issuance of summons, the Court cannot interfere or grant unreasonable stay on investigation.
ii. Any person against whom an enquiry is undertaken under the relevant provisions of the tax laws, does not ipso facto become an ‘accused’ until prosecution is launched.
iii. The powers bestowed upon the officers appointed under numerous tax enactments for search and arrest are in effect intended to aid, assist and provide support to their main purpose of levying and collecting the taxes and duties.
iv. Passing of any blanket orders without stating reasons would obstruct the investigation and could jeopardize the same. Therefore, such a broad directive is completely unjustified and before passing any blanket order, it is paramount to state the reasons for granting of any such interim relief or protection.
