GST Officers Render Unconditional Apology to Bombay HC for Arresting Alleged Tax Evader prior to Recording Statement [Read Order]

The Bombay High Court recently accepted an unconditional apology rendered by officers of the  Goods and Services Tax (GST) Department, in light of their arrest of the Petitioner while his opportunity to record statement had been scheduled at a later date.

Petitioner Mishal J. Shah Hindu Undivided Family (HUF) instituted a Writ Petition before the Bombay High Court seeking directives to call for the validity legality of GST Notices issued to the Petitioner and also sought directives for removing the provisional attachment and defreezing of their Bank Account which had been made inactive upon suspicion that the Petitioner was involved in the fraudulent availment of Input Tax Credit (ITC).

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In the preceding hearing before the High Court, Advocates Prasannan Namboodiri, Pratibha Namboodiri, Tejal Darekar, Rishabh Sinha, Pallavi Dabak and P S Patkar had submitted that the Petitioner had been placed under arrest by the GST Authorities on 19 December, 2024 despite having been afforded an opportunity to record his statement scheduled for 30 December, 2024

Noting the conduct of the GST Authorities in arresting the Petitioner, the Bombay High Court had issued Show–cause Notices (SCN) to Chandar Kamble, Assistant Commissioner of State Tax as well as Prerna Deshbhratar, Joint Commissioner of State Tax hinting towards the initiation of Contempt Proceedings.

The GST Officers, represented by Jyoti Chavan, Additional Government Pleader submitted in their Affidavits that the Petitioner is a Director of M/s JMC Metals Private Limited, an enterprise suspected of fraudulently availing ITC to the tune of Rs.9.54 Crores; the Petitioner was arrested by the GST Authorities due to his designation as Director of the arraigned company and not in terms of any action taken against his position as the Karta of the Petitioner HUF.

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The Division Bench of Justice B. P. Colabawalla  and Justice Firdosh P. Pooniwalla accepted the apologies tendered by the GST Authorities and discharged the SCN issued against them, while issuing caution to take strict care before any arrest is made, in order to ensure the letter of law.

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