SC directs no coercion against man involved in GST fraud

New Delhi: The Supreme Court on Wednesday directed that no coercive action should be taken against a man who had allegedly indulged in registration of fake firms and issuance of fake invoices without the supply of goods and committed offences to the tune of approx Rs 52 crore.

A three judge bench of the apex court presided by Justices A.M. Khanwilkar, Dinesh Maheshwari and Sanjiv Khanna passed the directions while issuing notice to the Centre over a petition filed by Aditya Gupta.

The petition filed through advocates Vijay Aggarwal and Mudit Jain also challenged sections 69 and 132 of the Central Goods & Service Tax Act, 2017.

“In the meantime, no coercive action be taken against the petitioner in connection with the subject matter,” the three judge bench of the top court said in its order.

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“The Petitioner herein has already spent about 22 months in custody, for an offence punishable with maximum sentence of 5 years, and the trial is not likely to end in the near future due to the Covid-19 Pandemic,” the plea said.

The plea submitted that the arrest of Gupta on June 20, 2018, was illegal and in violation of his fundamental rights as the investigation conducted against him was in violation of the procedure established by law as contemplated under the Code of Criminal Procedure (CrPC).

Gupta, in his plea, sought from the top court to decide whether it was beyond the legislative competence of the Centre to enact such sections of arrest and criminal prosecution which are criminal in nature under the general power to levy tax.

The case of the petitioner that the criminal trial for the offences under Section 132 of the CGST Act, 2017 and the arrest under Section 69 have no constitutional backing as the same, being provisions of criminal nature, could not have been enacted under Article 246A.

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“The instant writ petition is filed by the Petitioner to protect his personal liberty, safeguard his fundamental rights guaranteed under the Constitution of India and for adjudication of the substantial questions of law,” the petition said.

“The very commencement and continuation of the investigation against the petitioner was without following the provision of Section 154, 157 and 172 r/w S. 4(2) CrPC and thus, the entire investigation, including the arrest of the petitioner, is rendered non-est, illegal, unconstitutional, void ab-initio and completely vitiated in law,” the plea said further.

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