A division of the Rajasthan High Court has dismissed two petitions where the petitioners sought to quash the summons issued under section 70 of the Central GST Act, 2017 for the reason that the investigation on the issue is under process.
The petitioners prayed for interim protection against an apprehended action of arrest pursuant to the proceedings initiated by Director General of GST Intelligence and its offices in the matter of alleged evasion of GST.It was argued that the petitioners have been issued summons under Section 70 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘CGST Act’) to appear before the GST authorities, even though these two petitioners have no role to play in the alleged evasion of GST, in the course of manufacturing activities.
The department, on the other hand, submitted that the petitioners have rushed to the Court at this stage when only summons under Section 70 of the CGST Act have been issued. It is argued that the respondents are holding investigation into serious allegation of tax evasion. It was further submitted that acting upon an intelligent input that M/s. MPSPL is indulged in racket of huge GST evasion with hand holding of various tobacco manufacturing units including M/s. MPPL by way of clandestine supply of packaging material under the cover of invoices issued to various fake firms registered either in Rajasthan or in Gujarat, simultaneous searches were carried out by the officers of DGGI, JZO, Jaipur at various places related to M/s. MPSPL, M/s. MPPL and M/s. Montage Enterprises Private Limited, Haridwar on 22.04.2021 and during the course of search several incriminating documents were seized.
A division bench consisting of Acting Chief Justice Manindra Mohan Shrivastava and Justice Madan Gopal Vyas found thatthe petitions have been filed by the petitioners at the initial stage when summons have been issued to them to appear before the respondent authorities in the course of investigation being carried out pursuant to searches carried out in various business establishments in the matter of alleged huge GST evasion.
“At this stage, after hearing learned counsel for the parties and various judgments cited at the Bar, it cannot be said that the respondent authorities had no jurisdiction or authority under the law to issue summons under Section 70 of the CGST Act. The summons have been issued to the petitioners in the two petitions in the course of investigation into allegation of huge evasion of GST based on search and raid carried out in various premises/manufacturing units. It is not that without any material so far collected, all of a sudden, summons have been issued to the petitioners.”
“On prima facie considerations, we do not find that the issuance of summons to petitioners is without jurisdiction and authority of law. The action initiated by the respondents does not appear to be actuated by any mala fide intention and further taking into consideration the material disclosed during various searches and raids conducted by the respondent authorities involving M/s MPPL and M/s. MPSPL, we are not inclined to pass any interim order in favour of the petitioners, keeping in view that we are not dealing with an application for grant of anticipatory bail but challenge to jurisdiction and authority of respondents in issuing summons under Section 70 of the CGST Act,” the Court said.
Prakash Chandra Purohit vs Union Of India
CITATION: 2022 TAXSCAN (HC) 105
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