The petitioner has filed the writ petition challenging the vires of Sections 69 and 132 of Central Goods and Services Tax Act 2017 (hereinafter to be referred as ‘the Act of 2017’). He has inter alia prayed for interim relief during the pendency of the writ petition as non-bailable warrants have been issued by the competent authority. His apprehension is that as he appears before the concerned authority, he may be taken in custody. Mr. Rohatgai, learned Senior Counsel for the petitioner has relied upon the orders passed by this Court in CWP-13995-2020 titled as M/s Stalwart Alloys India Pvt. Ltd. & Ors. vs. Union of India and Ors., dated 9.9.2020, wherein direction was given to the competent authority not to take coercive action during the pendency of the petition. Learned Senior Counsel has also raised number of other legal issues particularly powers of the Legislature to enact laws under Article 246-A of the Constitution of India, which is special provision with respect to Goods & Services Tax.

The learned Senior Counsel also referred Sections 4, 5 and provisions of Chapter XII of the Code of Criminal Procedure (Cr.P.C.) to contend that an offence under CGST shall be investigated, inquired into, tried and otherwise dealt with according to provisions of Cr.P.C. subject to any provision contrary in the CGST Act.

The learned counsel appearing for the respondents, on the other hand submits that the order passed in M/s Stalwart Alloy’s case (supra) is of no help to the petitioner. Learned counsel further contended that in W.P. (Crl.) No.184-2020 titled Adtiya Gupta vs. Union of India and Others, the Hon’ble Apex Court vide order dated 21.7.2020 gave directions that in the meantime, no coercive action be taken against the petitioner in connection with the subject matter. However, vide subsequent order dated 31.8.2020, the order preventing any coercive steps was recalled, as redundant with liberty to the petitioner to apply for bail before the appropriate Court. Referring to status report No.3 dated 4.3.2021, in sealed cover which we have perused, the learned counsel further submits that there is an effort on the part of the petitioner, to defeat the process initiated by the Investigating Agency, by adopting illegal methods. The petitioner has tried to destroy evidence in order to avoid the rigors of Section 132 of the Act of 2017. The counsel further contended that as per aforesaid status report, the total amount of GST evasion in the present case is ₹ 7,83,15,309/-, which attracts punitive action, it being cognizable and non-bailable offence.

We have heard the learned counsel for the parties.

At the outset, we may refer to order dated 18.4.2019 passed by the Telangana High Court in P.V. Ramana Reddy vs. Union of India’s case, the operative part of which reads as follows:

“61. In view of the above, despite our finding that the writ petitions are maintainable and despite our finding that the protection under Sections 41 and 41-A of Cr.P.C., may be available to persons said to have committed cognizable and non-bailable offences under this Act and despite our finding that there are incongruities within Section 69 and between Sections 69 and 132 of the CGST Act, 2017, we do not wish to grant relief to the petitioners against arrest, in view of the special circumstances which we have indicated above.”

In appeal, the Hon’ble Supreme Court has upheld Telangana High Court judgment and the SLP was dismissed, on 27.5.2019.

It is also relevant to point out that the Hon’ble Supreme Court in Union of India vs. Sapna Jain passed order dated 29.5.2019 while dismissing the SLP, the operative part of which reads as follows:-

“3. As different High Courts of the country have taken divergent views in the matter, we are of the view that the position in law should be clarified by this Court. Hence, the notice.

4. As the accused-Respondents have been granted the privilege of pre-arrest bail by the High Court by the impugned orders, at this stage, we are not inclined to interfere with the same. However, we make it clear that the High Courts while entertaining such request in future, will keep in mind that this Court in P.V. Ramana Reddy v. Union of India by order dated 27.5.2019 passed in [SLP(Crl.) No. 4430/2019] had dismissed the special leave petition filed against the judgment and order of the Telangana High Court in a similar matter, wherein the High Court of Telangana had taken a view contrary to what has been held by the High Court in the present case.

5. Beyond the above, we do not consider it necessary to observe anything further.”

In the aforesaid order dated 29.5.2019, the Hon’ble Supreme Court has clarified that the High Courts while entertaining request for grant of pre-arrest bail shall keep in view the fact that the Apex Court vide order dated 27.5.2019 has dismissed the SLP filed against the judgment and order of Telangana High Court in P.V. Ramana Reddy’s case supra.

As regards plea of the petitioner that interim orders of protection against arrest in Writ Petition (criminal) No.221-2020, Shyam Khemani vs. State of Madhya Pradesh and Others dated 31.8.2020 and Writ Petition (civil) No.56/2021 Ram Prakash Malpani vs. S.C. Sinha and Others dated 1.2.2021, have been passed after the orders passed in Sapna Jain’s case (supra) and thus, this Court should pass order in the same terms, we do not find merit in the plea. This is for the reason that subsequent orders passed after Sapna Jain’s case (supra) have been passed by the Hon’ble Supreme Court itself. The High Courts, however, have been directed to keep in mind that a SLP against order passed by Telangana High Court was dismissed. It will not be out of place to refer here to an order passed by the Delhi High Court in Writ Petition (C)5454-2020 titled as Dhruv Krishan Maggu vs. Union of India & Ors. dated 8.1.2021, in which a similar prayer made by the petitioner seeking interim protection was rejected. Operative part of the order reads as under:-

“55. This Court is of the view that the allegation that a tax collection mechanism has been converted into a disbursement mechanism most certainly requires investigation. Accordingly, this Court is not inclined to interfere with the investigation at this stage and that too in writ proceedings. At the same time, innocent persons cannot be arrested or harassed. This Court has no doubt that the trial court, while considering the bail or remand or cancellation of bail application, ‘will separate the wheat from the chaff‟ and will ensure that no innocent person against whom baseless allegations have been made is remanded to police/judicial custody.

56. Consequently, with the aforesaid observations and liberty, the CM No.32276/2020 in WP(C) 10130/2020 for interim relief as well as the prayer for interim relief in WP(C) 5454/2020 are dismissed with liberty to the petitioners to avail the statutory remedies and the CM No. 28105/2020 filed by respondent nos. 2 and 3 in WP(C) 5454/2020 is allowed and the interim order dated 20th August, 2020 passed in W.P.(C) 5454/2020 is vacated.

57. It is clarified that the observations made herein are prima facie and shall not prejudice either of the parties at the stage of final arguments of the present writ petitions or in the proceedings for interim protection.

W.P. (C) 5454/2020 & W.P.(C) 10130/2020

List before regular roster Bench on the date already fixed.”

We are, thus of the prima facie view that a special enactment has been enacted for recovery of taxes, under enabling provisions contained in Section 4 of the Cr.P.C. This Court is of prima facie view that the Parliament is empowered under Article 246-A of the Constitution to enact special laws with regard to Goods and Services Tax. The legislation enacted, is for levy and collection of taxes on supply of Goods and Services having special provisions for recovery of revenue. It being a fiscal matter, a distinct procedure appears to have been evolved by the Parliament by virtue of a special enactment which is permissible under Section 4 of Cr.P.C.

It is well settled that custodial interrogation is qualitatively more elicitation oriented than questioning a suspect who is well ensconded with a favourable order under Section 438 of the code. In such cases effective interrogation of suspected person(s) is of tremendous advantage in disintering many useful informations and also materials which would have been concealed. (See State Represented through the C.B.I. vs. Anil Sharma, 1997(7) SCC 187). Though these observations were made in a petition in context of Section 438 Cr.P.C., they are relevant insofar as the authorization letter gives the power to the concerned authority to place a person under arrest in case he does not cooperate with the investigating agency.

However, since we are dealing only with the prayer for interim relief at present, we do not intend to express any final opinion on the issue. Besides interference with the investigation at this stage in the writ jurisdiction, would not be warranted.

In view of the above, we have no option, but to decline the prayer for interim protection to the petitioner during the pendency of the investigation.

Dismissed.

As far as interim order passed in M/s Stalwart Alloys case (supra) is concerned, learned counsel shall be at liberty to refer the instant order before the concerned Bench.

Main case to come up for arguments on 19.5.2021.