S.Paulraj vs. The Commissioner/Special Officer

Held

The Court held that W.P.(MD)No.16842 of 2019, challenging the summon under Section 70 of the CGST Act, 2017, was not maintainable. The Court reasoned that a summon is a preliminary step for an inquiry and does not infringe upon the petitioner's rights, especially when the authority issuing it is competent. It is well-settled that a writ petition cannot be entertained at the stage of a summon unless it is demonstrably without jurisdiction. Regarding W.P.(MD)No.6483 of 2020, the Court found considerable force in the petitioner's submission that the amounts were extracted under coercion, citing photographs showing shutters being closed during business hours. The Court directed the respondents to conclude the investigation and, if adjudication proceedings are initiated, to issue a show cause notice. The remittance made by the petitioner will abide by the final order. The entire exercise is to be completed within twelve weeks. The ratio is that while a preliminary summon in an inquiry is not challengeable in writ jurisdiction unless without jurisdiction, payments made under duress during such inquiries can be subject to judicial review, and the ultimate fate of such payments depends on the final adjudication.

Facts

The petitioner, S.M.I. Mohamed Abubacker, Managing Director of M/s.Femina Shopping Mall Private Limited, challenged a summon issued by the Senior Intelligence Officer, DGGI, under Section 70 of the CGST Act, 2017, in W.P.(MD)No.16842 of 2019. The company was registered under GST and claimed to have filed returns and discharged tax obligations correctly. During searches on June 6, 2019, and August 20, 2019, the petitioner alleged coercion and threat of closure, leading to a spot payment of Rs. 20,00,000/-. Subsequently, W.P.(MD)No.6483 of 2020 was filed seeking the refund of this amount, along with Rs. 66,266/- and Rs. 34,740/-, which were also collected as spot payments. The respondents denied the allegations of coercion.

Key Issues

1. Whether W.P.(MD)No.16842 of 2019, challenging a summon issued under Section 70 of the CGST Act, 2017, is maintainable before the High Court. The petitioner argued that the summon was issued without jurisdiction and infringed their rights, while the respondents contended that a summon is a preliminary step in an inquiry and not a final order, thus not amenable to writ jurisdiction unless issued without jurisdiction. 2. Whether the amounts of Rs. 20,00,000/-, Rs. 66,266/-, and Rs. 34,740/- were collected under coercion, warranting their refund. The petitioner presented photographs and argued that the conduct of the officials, including threatening to seal the premises during business hours, amounted to coercion. The respondents denied these allegations in their counter affidavit.