Directorate General of GST Intelligence Vs Girish Sachdeva (Delhi High Court)
The Delhi High Court dismissed petitions filed by the Directorate General of GST Intelligence challenging orders that required the department to give seven days’ prior notice before taking coercive action against certain individuals under investigation for alleged GST fraud. The Court clarified that such protection did not amount to blanket anticipatory bail and merely ensured that the individuals had an opportunity to avail legal remedies if circumstances changed.
The matter arose from an inquiry initiated on 13 December 2018 following intelligence inputs that a company, M/s Daak International Pvt. Ltd., had issued high-value E-way Bills without filing GST returns. During the investigation, officials discovered that the company was not operating from its declared premises, which belonged to another entity providing virtual office facilities. Statements recorded during the inquiry identified three directors of the company. The respondents later stated that they were engaged in the business of trading in textiles and minerals, identified their suppliers and customers, and disclosed that they had no storage facilities.
The department issued summons requiring the respondents to appear and produce documents. According to the department, the company remained active but had stopped filing GST returns from March 2019 onwards, including GSTR-1, GSTR-3B and GSTR-9. It alleged that the company had evaded more than ₹8 crore in tax by availing ineligible input tax credit and passing it on through circular trading. The company had allegedly operated for around ten months and caused substantial loss to the revenue during that period. The department further contended that the respondents repeatedly failed to comply with summons and did not furnish the required documents, thereby hampering the investigation.
