M/S. Agarwal Foundries Private Limited Rama Towers And 3 Others vs. Union Of INDIA And 9 Others

Held

The Court held that officials belonging to the GST Intelligence Department cannot resort to physical violence or torture while conducting interrogations. The Court directed that the enquiry proceedings against the first petitioner shall not be handled by the 5th respondent (Senior Intelligence Officer) and shall be transferred to another designated official. Interrogations of petitioners 2 to 4 and their employees are to be conducted between 10:30 a.m. and 05:00 p.m. on weekdays, within the visible range of their appointed advocate, who shall not be in hearing range. Petitioners 2 to 4 alone can be summoned to New Delhi for a duration of two to three days on one occasion, with the rest of the interrogation to be conducted at Hyderabad by the respondents. The respondents were also directed to adhere to the provisions of the CGST Act, 2017 in conducting search, investigation, or enquiry. The Court explicitly stated that it did not express an opinion on other contentions raised by either party.

Facts

The petitioners, including M/s. Agarwal Foundries Private Limited and its directors, filed a writ petition challenging the actions of GST intelligence officials. They alleged harassment, manhandling, and assault during inquiry proceedings initiated against the first petitioner. The petitioners sought a declaration that these actions were illegal and unconstitutional, a transfer of the inquiry to another unit, and alternatively, compliance with due process and principles of natural justice. They also sought a stay on further proceedings and the arrest of petitioners. The respondents, including the Directorate General of GST Intelligence, sought to vacate the stay order and dismiss the interim applications. The court noted that the petitioners had cooperated with the investigation after an interim order was granted.

Key Issues

1. Whether officials belonging to the GST Intelligence Department can resort to physical violence while conducting interrogation of individuals in connection with proceedings initiated under the CGST Act, 2017 and IGST Act, 2017? (Question of law) Petitioner's arguments: The petitioners contended that the actions of the GST intelligence officials in harassing, manhandling, and assaulting them were illegal, arbitrary, unconstitutional, and violated their fundamental rights under Articles 14 and 21 of the Constitution of India. They argued for the transfer of the inquiry and adherence to due process and principles of natural justice. Revenue/State's arguments: The respondents argued for the vacation of the stay order and dismissal of the interim applications. They also raised a plea to conduct the investigation at their headquarters in New Delhi.