Deputy Director of Income Tax (INV) Vs Xiongwei Li (Delhi High Court)
The proforma for issuance of the Look Out Circular indicates the nationality of the respondent to be that of China. As per the communication dated 19.2.2022 apart from the aspect of M/s Huawei Telecommunications (India) Company Private Limited (HTICPL) and M/s Huawei Technologies India Private Ltd. having been alleged to make a wilful attempt to evade tax, it had been alleged in the proposal for issuance of the Look Out Circular that during the course of the search, the companies and their officers/employees had failed to provide the adequate opportunity to the authorized officers for furnishing and examination of the Books of Accounts of the companies thus impeding the authorized officers from discharging their duties and that thus the presence of the Chief Executive Officer (the respondent herein) of M/s Huawei Telecommunications (India) Company Private Limited (HTICPL) inter alia was necessary during the course of further investigation which would be carried out and that the on going investigation into various violations submitted by the companies would take ample time due to the examination of extensive evidences that had been seized and due to offences committed by the companies and their employees thus necessitating the issuance of the LOC inter alia against the respondent. The approval accorded on 19.2.2022 to the issuance of the LOC takes into account the aspect of the respondent being a flight risk from whom a number of details are stated to be required.
Taking into account the factum that the investigation into the alleged commission of the offence punishable under Section 276C(1)(i) of the Income Tax Act, 1961, by the Companies involved allegedly including M/s Huawei Telecommunications (India) Company Private Limited (HTICPL) of which the respondent at the relevant time is stated to have been the CEO, would apparently take considerable time, the respondent herein having been alleged to have committed only a non-cognizable and bailable offence who per se himself cannot be attributed to have committed acts detrimental to the economic interest of India especially coupled with the factum that the petitioner has not alleged that the respondent is a shareholder of the said „company‟ and in relation to the which the company M/s Huawei Telecommunications (India) Company Private Limited (HTICPL) vide directions dated 30.8.2022 of the Hon‟ble Division Bench of this Court in W.P.(C) 6352/2022 has adhered to the directions therein of a fixed deposit of Rs.200 crores which is to be renewed automatically from time to time apart from refund of Rs.30 crores to the petitioner having not been directed to be released to the petitioner of that writ petition by the respondent i.e., the Deputy Director of Income Tax (INV.)-4(3), New Delhi i.e., the petitioner herein, the aspect of atleast 230 crores out of the alleged tax evasion of 600 crores as averred in the written submissions of the petitioner dated 14.9.2022 allegedby the accused No.1 in the criminal complaint filed by the petitioner before the ACMM, Special Acts Central District, Tis Hazari Courts stand secured.
Undoubtedly vide observations in para 9 of the verdict dated 30.8.2022 in W.P.(C) No. 6352/2022 it had been observed as under:
“9. It is made clear that the above order has been passed on the basis of offer made by the Petitioner and will not be considered as a precedent in any other proceeding.”
and thus the contention raised on behalf of the petitioner that the observation made in Writ Petition(C) No. 6352/22, cannot thus be considered in relation to any other proceeding, nevertheless the factum of Rs.200 crores having been deposited by the company M/s Huawei Telecommunications (India) Company Private Limited (HTICPL) with the petitioner herein with an additional refund of Rs.30 crores to the company having been prevented to be made vide order dated 30.8.2022 in W.P.(C) No. 6352/2022 cannot be overlooked.
Undoubtedly taking into account the factum that there is no extradition treaty of our country with China, the respondent thus falls within the category of a flight risk, but, the factum that he is alleged to have committed only a non-cognizable and an alleged bailable offence can also not be overlooked. The verdicts that the petitioner has relied upon all relate to alleged commission of non-bailable offences in which the issuance of the LOCs have been upheld in as much as they relate to offences inter alia punishable under the Prevention of Money Laundering Act, 2002, Prevention of Corruption Act, 1988, the Central Goods and Services Tax Act, 2017 and the non bailable offences under the Indian Penal Code, 1860.
In the circumstances, though it is not considered appropriate by the Court to set aside the impugned order dated 29.8.2022 of the learned Trial Court which has set aside the LOC against the respondent in addition to the conditions imposed by the learned Trial Court to the effect that in case of resignation, retirement or cessations of employment etc. of the respondent company, M/s Huawei Telecommunications (India) Company Private Limited (HTICPL) shall withhold the severance pay/severance package and other incentives/emoluments payable to the respondent and the same shall not be released without permission of this Court to which effect an undertaking has been directed to be submitted of the company to be filed before the Trial Court under intimation to the petitioner which the respondent submits has already been so submitted copy of which has also been submitted before this Court, the appropriateness of the undertaking being in consonance with the order dated 29.8.2022 of the learned Trial Court is an aspect to be considered by the Trial Court as has already observed herein above, it is considered appropriate to direct further in addition to the effect:
