Deepak Vijaywargiya And 2 Others vs. The Directorate General Of Goods And Service Tax Intelligence And 4 Others

Held

The High Court disposed of the writ petition, noting that the petitioners had entered appearance before the respondents, their statements were recorded, and the inquiry was in progress. The Court acknowledged the interim protection granted to the petitioners since August 4, 2021, during which they had not been arrested and had extended full cooperation. The petitioners further undertook to continue cooperating with the department. Given these circumstances, the Court found no fruitful purpose in keeping the writ petition pending. The respondent authorities were directed to conclude the ongoing inquiry at the earliest without insisting on the arrest of the petitioners until a final order is passed. The petitioners were informed that they would have appropriate rights to take legal recourse after the final orders are passed. The issue of whether the respondents had the authority to arrest under Section 69 in the absence of tangible grounds for 'reason to believe' was not expressly decided, as the petition was disposed of based on the ongoing inquiry and cooperation.

Facts

The petitioners, Deepak Vijaywargiya and Praveen Vijaywargiya, partners of M/s. Best Chem, filed a writ petition seeking to restrain the Directorate General of Goods and Service Tax Intelligence (DGGI) and other revenue authorities from arresting them under Section 69 of the Central Goods and Services Tax Act, 2017. The inquiry was initiated against the partnership firm, M/s. Best Chem. The petitioners sought this protection on the condition that they would fully cooperate with the ongoing inquiry. The High Court had previously granted interim protection against their arrest on August 4, 2021, which had been extended. During the hearing, counsel for both sides stated that the petitioners had appeared before the respondents, their statements were recorded, the inquiry was progressing, and was likely to conclude soon.

Key Issues

1. Whether the respondents have the authority of law to exercise the power of arrest under Section 69 of the Central Goods and Services Tax Act, 2017, against the petitioners (individuals) in the ongoing inquiry against the partnership firm, M/s. Best Chem, in the absence of tangible grounds for forming a 'reason to believe' that an offence under Section 132 of the Act has been committed. Petitioner's contention: The petitioners argued that the respondents lack the authority to arrest them under Section 69 of the CGST Act, 2017, as there were no tangible grounds to form a 'reason to believe' that they had committed an offence under Section 132 of the Act. They sought a writ of mandamus to prevent their arrest, provided they extended full cooperation to the inquiry. Revenue's contention: The judgment records no specific argument from the revenue respondents regarding their authority to arrest or the grounds for arrest. However, their presence and participation in the proceedings indicate their role in the inquiry.