If Taxpayer does not appear after a dozen summons GST Department can take coercive action against him, including his arrest : HC

HIGH COURT OF JHARKHAND

Directorate General of GST Intelligence

v.

Pankaj Agarwal

CHANDRASHEKHAR, J.

ORDER NO. 05
CONT. CASE (CIVIL) NOS. 665, 668 TO 671 OF 2019

JULY  9, 2021

ORDER

1. These contempt cases are filed by the Directorate General of GST Intelligence, through Senior Intelligence Officer.

2. By a common order dated 21-2-2019, a batch of writ petitions was disposed of with the following direction/observation:

“9. In view of the clear statutory provisions under section 69 read with section 70 of the Central Goods and Services Tax Act, 2017 and the stand taken in paragraph no. 25 of the counter-affidavit, these writ petitions are disposed of with a direction to the petitioners that they shall appear before the Senior Intelligence Officer who has issued summons to them as and when called and, of course, they shall not be arrested on the first day when they appear before him. It needs no reiteration that the Senior Intelligence Officer shall act fairly and his actions must demonstrate fairness in action.”

3. Mr. Ratnesh Kumar, the learned counsel for the petitioner-Directorate General of GST Intelligence submits that in flagrant violation of the directions issued by this Court the writ petitioners did not appear before the Senior Intelligence Officer and have failed to submit necessary documents and tender other evidences and, therefore, the present contempt cases against the individual writ petitioner(s).

4. The learned counsel for the petitioner would further elaborate upon the issue with reference to the observation in paragraph no. 8 of the order dated 21-2-2019 by saying that the Directorate is reluctant to proceed against the individuals because of observation of the writ Court that they shall not be arrested on the first date of their appearance before the Senior Intelligence Officer.

5. Paragraph no. 8 of the order dated 21-2-2019 reads as under:

“8. When the summons issued to the petitioners are examined on a conjoint reading of section 69 and section 70 of the Central Goods and Services Tax Act, 2017, it becomes apparent that under section 69 it is the Commissioner who, if he has reasons to believe, can by an order authorize any officer of Central Tax to arrest an assessee. Therefore, the Senior Intelligence Officer who has issued summons to the petitioners cannot arrest the assessee before the Commissioner records his satisfaction on “reasons to believe” and pass an order authorizing him to affect arrest of the assessee.”

6. From the aforesaid, it would appear that the writ Court formed an opinion on a conjoint reading of sections 69 and 70 of the Central Goods and Services Tax Act, 2017 that the Senior Intelligence Officer is not authorized to arrest an individual to whom he had issued summons on the first date of his appearance. It is certainly not the import of section 69 read with section 70 of 2017 Act that an individual who is avoiding appearance before the authority without any just excuse can claim that even if he appears after a dozen summons the authority cannot take coercive action against him, including his arrest.

7. In my opinion, the Directorate has misread and misconstrued the observations in paragraph nos. 8 and 9 of the order dated 21-2-2019. It is well-settled in law that any one intentionally avoiding the mandate in law is not entitled for any protection in law – but, there should be a finding on the issue.

8. These contempt cases stand disposed of with the aforesaid observations. Needless to say that the petitioner – Directorate can proceed in the matter in accordance with law.