Roop Charan Agarwal vs. The Directorate General Of Goods And Service Tax Intelligence

Held

The Court disposed of the writ petition by directing the respondent authorities to conclude the ongoing inquiry expeditiously and in accordance with the law. Crucially, the Court directed that the authorities should not insist upon the arrest of the petitioners until a final order is passed in the inquiry. The Court noted that the petitioners had been under interim protection since August 4, 2021, had not been arrested, and had extended full cooperation to the inquiry. The petitioners further undertook to continue cooperating with any future clarifications required by the department. The Court found no fruitful purpose in keeping the writ petition pending. The petitioners were granted the right to pursue appropriate legal recourse if necessary, subject to the outcome of the final orders. No issue was expressly left undecided, as the petition was disposed of based on the statements and undertakings.

Facts

The petitioners, Roop Charan Agarwal and his son, along with their company M/s. Shree Duli Chand Chemicals Private Limited, filed a writ petition before the Telangana High Court. They sought to restrain the Directorate General of Goods and Service Tax Intelligence (DGGI) and other revenue authorities from arresting petitioners 1 and 2 under Section 69 of the Central Goods and Services Tax Act, 2017. This was in connection with an ongoing inquiry against the third petitioner (the company). The petitioners sought this relief on the condition that they would fully cooperate with the inquiry. The Court had previously granted interim protection against arrest on August 4, 2021, which had been extended. The present hearing was based on statements made by counsel for both sides.

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 petitioners 1 and 2 in the ongoing inquiry against the 3rd petitioner, provided they extend full cooperation and in the absence of tangible grounds for forming a reasonable belief of an offense under Section 132 of the Act. Petitioner's contention: The petitioners argued that the respondents should not arrest them as long as they cooperate with the inquiry and that arrest powers under Section 69 should only be exercised when there are tangible grounds for believing an offense under Section 132 has been committed. Revenue's contention: The judgment records no specific argument from the revenue or state respondents regarding their authority to arrest or the grounds for doing so. However, their appearance and participation in the proceedings imply a defense of their actions.