Chotu Lal vs. Union Of INDIA Thr. Sec. And Ors

Facts

The Petitioner, Chotu Lal, filed a writ petition challenging an attachment notice issued under Section 83 of the CGST Act. The Respondent Revenue objected, alleging the Petitioner was a "bogus person" with a substantial amount of Rs. 21 crores deposited in his attached bank account, despite claiming to be a laborer. The Petitioner had previously filed a representation under Rule 159(5) of the CGST Rules, 2017, against a DRC-22 concerning his bank account. He was issued a summons to appear with supporting documents for his crypto-currency trading business, but he neither appeared nor submitted documents. Another writ petition filed by the Petitioner was disposed of, directing the Respondents to decide his objections without a personal hearing. Subsequently, the competent authority decided the objections, but the Petitioner and his firm, M/s Wisemax Enterprises, were not found at the given address, as confirmed by a Panchnama. The Petitioner's statement was recorded under Section 70 of the CGST Act, where he claimed ignorance about the firm and transactions, attributing them to his cousin, Dileep Singh, and admitting to opening the bank account for Rs. 10,000/-.

Held

The Court held that the Petitioner had not approached the Court with clean hands and had suppressed material facts, thus disentitling him from exercising its discretionary writ jurisdiction under Article 226 of the Constitution of India. The Court noted significant inconsistencies and contradictions in the Petitioner's statements and filings, including discrepancies in his age, address, and signatures. Specifically, the Petitioner's claim of being a laborer was contrasted with substantial financial transactions in his bank account. The Court found that the Petitioner's assertion of being unaware of the transactions and the firm M/s Wisemax Enterprises was undermined by his previous filings and the fact that the firm was not traceable at the given address. The Court concluded that the Petitioner was playing fraud on both the Revenue and the Court. Consequently, the petition was dismissed. The Court also directed a serious investigation into all parties involved in filing this and related petitions, suspecting fraud and forgery, and imposed costs of Rs. 5 lakhs on the Petitioner.

Key Issues

1. Whether the Petitioner has approached this Court with "clean hands" and made appropriate disclosures, warranting the exercise of discretionary writ jurisdiction under Article 226 of the Constitution of India, considering the Respondent's allegations of the Petitioner being a "bogus person" and suppressing material facts? (Question of mixed law and fact, concerning Article 226 of the Constitution of India and principles of equity). Petitioner's Contentions: The Petitioner argued that he was carrying on business of trading crypto-currencies, which he believed did not fall within the purview of GST. He also stated that his signatures were obtained on a prepared statement without explanation, under threat of arrest, and that he was harassed and abused by GST officers. He claimed his permanent address was in Rajasthan and that he did not understand English. Respondent's Contentions: The Respondent Revenue argued that the Petitioner was a "bogus person" who had not approached the Court with clean hands, having suppressed material facts. They contended that the Petitioner failed to appear for summons and personal hearings, did not submit requested documents or Income Tax Returns, and that the firm M/s Wisemax Enterprises was not found operating at the given address. The Respondent also highlighted inconsistencies in the Petitioner's addresses and signatures, suggesting fraud on the Revenue and the Court.