Sri Games Kraft Technologies PVT LTD vs. The Directorate Of Enforcement
Original PDF →Facts
The petitioner, Sri Games Kraft Technologies Pvt. Ltd., filed a writ petition challenging two notices issued by the Directorate of Enforcement (respondent). The first notice was a show cause notice dated November 30, 2021, and the second was a summons dated December 17, 2021. The petitioner had previously engaged in litigation with GST authorities and the Enforcement Directorate. The petitioner submitted replies to both the show cause notice (on December 16, 2021) and the summons (on January 13, 2022), along with relevant documents. Despite these submissions, the respondent had not passed any orders and was allegedly attempting to take coercive steps against the petitioner. The petitioner also stated that a 'B' report had been filed in the predicate offense related to the summons.
Held
The Court noted that it was an undisputed fact that the petitioner had submitted replies to the show cause notice and the summons, along with relevant documents, and that the respondent had not proceeded thereafter. Without expressing any opinion on the merits of the rival contentions, the Court deemed it appropriate to dispose of the petition by directing the respondent to consider the replies and documents submitted by the petitioner. The respondent was further directed to proceed only strictly in accordance with law, after providing sufficient and reasonable opportunity to the petitioner and hearing them. The petitioner was granted liberty to submit additional replies, representations, pleadings, or documents within four weeks, which the respondent must also consider. The petitioner was also reserved liberty to pursue other legal remedies, including approaching the Court again if necessary. The petition was disposed of subject to these directions.
Key Issues
1. Whether the respondent Directorate of Enforcement can proceed further against the petitioner despite a 'B' report being filed in the predicate offense, and if so, under which provision of law? 2. Whether the respondent has acted appropriately by issuing further notices and summons without passing orders on the petitioner's replies and submissions? Petitioner's arguments: The petitioner contended that the respondent should not proceed further as a 'B' report has been filed in the predicate offense. They also argued that the respondent's actions of issuing further notices and summons without deciding on their previous replies and submissions were improper, and that the respondent was attempting coercive steps. The petitioner relied on the fact that they had submitted replies and documents. Respondent's arguments: The respondent stated that the replies submitted by the petitioner to the show cause notice and summons would be considered, and that they would proceed further strictly in accordance with the law.
Sections Cited
Section 528 of BNSS Act
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Cause title — parties, addresses and appearances
ORAL ORDER In this petition, petitioner seeks the following reliefs : i) Issue writ in the nature of certiorari or any other appropriate order or directions and quash the show and quash the cause notice dated: 30.11.2021 summon No: PMLA/SUMMON/HIU2/83 issued by the respondent, the copy of which is produced herewith and marked as Annexure-C to the Writ Petition.
ii) Issue writ in the nature of certiorari or any other appropriate order or directions and quash the notice summon No: PMLA/SUMMON/HIU2/2021/119 dated 17.12.2021 is issued by the 1st respondent, the copy of which is produced herewith and marked as Annexure-E to the Writ Petition.
iii) And grant such other order or directions as this Hon'ble Court deems fit under the circumstances of the case, including costs, in the interest of justice and 2. Heard learned counsel for the petitioner and the learned counsel for the respondent-Enforcement Directorate and perused the material on record.
In addition to reiterating various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that, despite earlier round of litigation between the petitioner and the GST authorities and the Enforcement Directorate-respondent herein, the respondent have issued the impugned show cause notice dated HC-KAR NC: 2025:KHC:22479
2021, to which the petitioner submitted a reply dated 16.12.2021, despite which, the respondent issued one more summons dated 17.12.2021, to which also the petitioner gave a reply dated 13.1.2022, along with relevant documents, pursuant to which, the respondent is not passing any orders and instead are attempting to take coercive steps against the petitioner who are before this Court by way of the present petition.
It is also submitted that a 'B' report has already been filed in the predicate offence in relation to the summons issued by the respondent and as such, the respondent would not be entitled to proceed further against the petitioner.
Per contra, learned counsel for the respondent submits that the replies submitted by the petitioner to the show cause notice and the summons, would be considered by them and the respondent would proceed further against the petitioner strictly in accordance with law.
Though several contentions have been urged by both sides in support of their respective claims, it is a matter on record and an undisputed fact that, the petitioner has also HC-KAR NC: 2025:KHC:22479 submitted his reply dated 16.12.2021 to the show cause notice dated 30.11.2021 as well as the reply dated 13.1.2022 to the summons/notice dated 17.12.2021 along with the relevant documents and the respondent has not proceeded thereafter. Under these circumstances, without expressing any opinion on the merits/demits of the rival contentions, I deem it just and appropriate to dispose of this petition directing the respondent to consider the replies, documents etc, submitted by the petitioner and, proceed further only/strictly in accordance with law after providing sufficient and reasonable opportunity to the petitioner and hearing him in accordance with law. Liberty is also reserved in favour of the petitioner to submit additional reply, representation, pleadings, documents etc. to the respondent, within a period of four weeks from today, which shall also be considered by the respondent, who shall proceed further in accordance with law, as stated supra.
Liberty is also reserved in favour of the petitioner to take recourse to such other remedies, as available in law including approaching this Court subsequently, if occasion so arises. HC-KAR NC: 2025:KHC:22479
Subject to the aforesaid directions and liberty reserved in favour of the petitioner, the petition stands disposed of. (S.R.KRISHNA KUMAR) JUDGE
rs List No.: 1 Sl No.: 64 CT: BHK
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.