Krushansinh Pratapsinh Zala vs. State Of Gujarat

Held

The Court held that the applicant's advocate would be permitted to be present during the interrogation of the applicant. However, the advocate must sit at a distance beyond hearing range but within visible distance. The advocate must also be prepared to be present whenever the applicant is called upon to attend the interrogation. The Court reasoned that while the applicant's role in the alleged transactions was under scrutiny, allowing the advocate's presence under specific conditions would balance the investigative needs of the revenue with the applicant's right to have legal representation during the process. The Court did not explicitly decide on the broader question of whether an advocate has an absolute right to be present during interrogation under Section 70, but rather granted a conditional presence. The application was disposed of based on this specific direction.

Facts

The applicant, Krushansinh Pratapsinh Zala, filed an application under Article 226 of the Constitution and Section 482 of Cr.P.C. seeking directions to the Directorate General of Goods & Service Tax Intelligence (DGGI) to allow his advocate's presence during interrogation at a visible but not audible distance, and to refrain from coercive action. The DGGI had issued a summons under Section 70 of the CGST Act, 2017, in connection with an inquiry into three firms (M/s. Arihant Exports, M/s. Khalef Exports, and M/s. Sudarshan International) found to be fake and involved in paper transactions, leading to bogus Input Tax Credit (ITC) claims of Rs. 15,30,83,700/-. The applicant, a partner in M/s. Shree Siddhi Vinayak Petroleum, acted as an 'introducer' for these firms when they opened accounts with The Gandhidham Mercantile Co-operative Bank Limited. The applicant claims he has no link to the ITC transactions, having only introduced individuals at the bank's request. His statement was recorded on 26.02.2021, and he was subsequently summoned twice more, but did not appear.

Key Issues

1. Whether the applicant's advocate can be present during the interrogation of the applicant by the DGGI at a visible but not audible distance, as per Section 70 of the Central Goods and Service Tax Act, 2017? Petitioner's Arguments: The applicant argued that his office premises had already been searched, and his statement recorded, with nothing incriminating found. He maintained his role as an introducer was bonafide and he had no involvement in the alleged ITC transactions. He also noted that no notice under Section 61, 73, or 74 of the Act had been issued to him. Revenue's Arguments: The revenue, through the Assistant Director of DGGI, contended that the applicant has some nexus with the suspicious transactions. They cited a disclosure by the proprietor of M/s. Khalef Exports that his signatures were forged for opening the bank account. The revenue argued that the applicant's statement is required to ascertain his role in opening accounts for non-existent firms and whether it was coincidental or part of a conspiracy. They submitted that the applicant's filing of this application instead of appearing before the authority was not maintainable and no interim relief should be granted.