Facts of the Case

The petitioner approached the Gujarat High Court under Article 226 of the Constitution of India, contending that the GST authorities were likely to initiate coercive action, including arrest proceedings under Sections 69 and 132 of the GST Acts, without first undertaking assessment or adjudication proceedings under Sections 73 or 74.

The petitioner sought protection against any coercive measures unless the authorities first determined the alleged tax liability by following the statutory procedure prescribed under the GST law. An interim order had earlier been granted by the High Court restraining the authorities from taking coercive action during the pendency of the petition.

Issues Involved

  1. Whether GST authorities can initiate coercive proceedings under Sections 69 and 132 without first completing assessment or adjudication under Sections 73 or 74.
  2. Whether the petitioner was entitled to protection against apprehended coercive action before determination of tax liability.
  3. Whether the petition required adjudication after the State confirmed that it would follow the binding judicial directions already issued by the High Court in an earlier decision.

Petitioner’s Arguments

  • The petitioner submitted that there was a genuine apprehension that the GST authorities would proceed under Sections 69 and 132 without following the mandatory assessment and adjudication mechanism under Sections 73 or 74.
  • It was argued that no coercive recovery or penal proceedings should be initiated without granting an adequate opportunity of hearing and examining the documents and evidence produced by the petitioner.
  • The petitioner requested the Court to restrain the authorities from taking any coercive steps contrary to the statutory procedure established under the GST Acts.

Respondent’s Arguments

The State Government submitted that the issue was already governed by the Gujarat High Court's earlier decision in Vimal Yashwantgiri Goswami vs State of Gujarat & Others, wherein appropriate directions had been issued regarding the exercise of powers under the GST law.

The respondents assured the Court that they were bound by those directions and would not take any coercive action contrary to the law laid down in the said judgment.

Court Order / Findings

The Gujarat High Court noted the statement made by the State that the authorities would comply with the earlier binding judgment governing such matters.

In view of this statement, counsel for the petitioner sought permission to withdraw the petition.

Accordingly, the Court:

  • Allowed the petitioner to withdraw the writ petition.
  • Disposed of the petition without examining the merits.
  • Discharged the notice.
  • Vacated the interim relief that had earlier restrained coercive action.

Important Clarification

  • The High Court did not decide the legality of proceedings under Sections 69 and 132 on merits.
  • The petition was disposed of solely because the State assured compliance with the earlier binding judgment.
  • The order reiterates that GST authorities are expected to act in accordance with judicial precedents governing coercive action.
  • The decision should not be interpreted as approving or disapproving arrest or prosecution in any particular case, as no findings were recorded on the substantive issues.

Sections Involved

  • Article 226 of the Constitution of India
  • Section 69 of the Central Goods and Services Tax Act, 2017
  • Section 132 of the Central Goods and Services Tax Act, 2017
  • Section 73 of the Central Goods and Services Tax Act, 2017
  • Section 74 of the Central Goods and Services Tax Act, 2017

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785305679_2168compressed.pdf

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