Laxmi Organics Industries Limited vs. Union Of INDIA Through Secretary, Ministry Of Finance (Department Of Revenue) And Ors.

Held

The Court granted leave to amend the petition to impugn the summons issued by the Directorate of Revenue Intelligence (DRI) and to implead the DRI as a party respondent. The petitioner agreed to appear before the DRI in response to summons dated February 11, 2021, and January 7, 2022, and to cooperate with the authority. The DRI was directed not to take any coercive steps against the petitioner during the recording of statements, and any proposed coercive steps would require seven days' clear notice to the petitioner, after which the petitioner would be at liberty to file appropriate proceedings. The writ petition was disposed of in these terms, with the rule made absolute. The Court explicitly stated that it had not expressed any views on the merits of the matter, and the contentions of both parties were kept open. No order as to costs was made. The Court did not decide the question regarding the interpretation of "excisable goods" in Entry 107 of Notification No. 50/2017-Customs.

Facts

The petitioner, Laxmi Organics Industries Limited, filed a writ petition seeking a direction to include "taxable goods subject to tax under GST laws" within the definition of "excisable goods" in Entry 107 of Notification No. 50/2017-Customs dated June 30, 2017. The petitioner alleged that the respondents had recovered Rs. 3.5 crores through coercive measures after issuing a summons on February 11, 2021. The petitioner sought liberty to challenge the summons issued by the Directorate of Revenue Intelligence (DRI) under Section 108 of the Customs Act, 1962, and to implead the DRI as a respondent. The respondents stated that no coercive steps had been taken against the petitioner. Leave to amend the petition was granted to challenge the summons and implead the DRI.

Key Issues

1. Whether the term “excisable goods” in Entry 107 of Notification No. 50/2017-Customs dated June 30, 2017, should include “taxable goods subject to tax under GST laws”? (Question of law turning on interpretation of the notification). Petitioner's contention: The petitioner argued that the scope of "excisable goods" should be interpreted to encompass goods taxable under GST laws, implying a broader application of the notification. The petitioner sought a writ of mandamus to this effect. Respondents' contention: The respondents did not explicitly argue on the interpretation of the term "excisable goods" in relation to GST laws. Their primary submission was that no coercive steps had been taken against the petitioner, and the petitioner had not impleaded the DRI or challenged the summons issued by them. 2. Whether the summons issued by the Directorate of Revenue Intelligence were valid and could be challenged by the petitioner? (Question of mixed law and fact turning on the validity of the summons and the petitioner's right to challenge them). Petitioner's contention: The petitioner sought liberty to impugn the validity of the summons issued by the DRI and to implead the DRI as a respondent. The petitioner also stated that Rs. 3.5 crores had been recovered through coercive measures following the summons. Respondents' contention: The respondents stated that no coercive steps had been taken against the petitioner and that the petitioner had not challenged the summons or impleaded the DRI.