Facts of the Case

The petitioners, Tai Tajik, proprietor of M/s R T T Enterprise, Papumpare, Arunachal Pradesh, and Kazi Motiur Rahman, an associate of petitioner No.1, filed this writ petition under Article 226 of the Constitution apprehending coercive action against them. A Search Authorisation dated 07.10.2023 had been issued by the Additional Director, Directorate General of Goods and Services Tax Intelligence (DGGI), Guwahati Zonal Unit, pursuant to which a search operation was conducted under Sub-section (2) of Section 67 of the Central Goods and Services Tax Act, 2017, at the office premises of M/s R T T Enterprises, in the absence of the petitioners, resulting in seizure of several articles. It was submitted that an amount of Rs.2,51,04,730 had already been voluntarily paid under Section 74(5) of the CGST Act, and the petitioners expressed willingness to pay further GST as determined in accordance with law, though the assessment was not yet complete, and to appear before the Investigating Officer with relevant documents.

Issues Involved

  1. Whether the petitioners, apprehending coercive action following a GST search and seizure operation, were entitled to protective directions from the writ court pending investigation.
  2. Whether voluntary payment under Section 74(5) of the CGST Act, coupled with willingness to cooperate, warranted a direction regulating the manner and timing of the petitioners' appearance before the investigating authority.

Petitioner's Arguments

  • The search under Section 67(2) of the CGST Act was conducted in the petitioners' absence, and they apprehended coercive action, including arrest, by the DGGI.
  • The petitioners had already voluntarily paid Rs.2,51,04,730 under Section 74(5) of the CGST Act and were willing to pay any further GST as determined in accordance with law, though the assessment was not yet complete.
  • The petitioners were willing to appear before the Investigating Officer with relevant documents and to fully cooperate with the investigation.
  • Reliance was placed on State of Gujarat vs Choodamani Parmeshwaran Iyer (Supreme Court, decided 17.07.2023), where the Court had directed appearance before the authorities for recording of statements, as the appropriate template for relief.

Respondent's Arguments

  • Learned Standing Counsel for CGST accepted notice on behalf of all four respondents (DGGI officers), obviating the need for formal notice.
  • The Standing Counsel joined the petitioners in relying on State of Gujarat vs Choodamani Parmeshwaran Iyer as the governing precedent for directing time-bound appearance before the investigating authority.

Court Order/Findings

  • The Court noted the parties' common reliance on State of Gujarat vs Choodamani Parmeshwaran Iyer, where the Supreme Court had directed appearance before the authorities for recording of statements.
  • The Court directed the petitioners to appear before the Investigating Officer and respondent authorities for recording of their statements within 10 days, failing which the authorities would be at liberty to proceed further in accordance with law.
  • Liberty was reserved to either party to approach the proper forum for redressal in the event of violation of the directions by the other side.

Important Clarification

  • Where a taxpayer under GST search and seizure proceedings (Section 67(2) of the CGST Act) apprehends coercive action but expresses willingness to cooperate, courts will typically direct a time-bound appearance before the investigating authority rather than granting blanket protection from arrest.
  • Voluntary payment under Section 74(5) of the CGST Act, coupled with willingness to cooperate, is a relevant factor courts weigh in structuring appearance directions, though it does not by itself stall the investigation.
  • State of Gujarat vs Choodamani Parmeshwaran Iyer (Supreme Court, 2023) continues to be relied upon by both revenue and taxpayers as the template for time-bound appearance directions in GST investigation matters.

Sections Involved

  • Section 67(2) of the CGST Act, 2017 – power to search and seize goods, documents and things liable to confiscation during a GST investigation.
  • Section 74(5) of the CGST Act, 2017 – voluntary payment of tax, interest and penalty before issuance of a show cause notice in cases involving fraud or wilful misstatement.
  • Article 226 of the Constitution of India – writ jurisdiction invoked apprehending coercive action.

Decision – In Favour of

The writ petition was disposed of with directions requiring the petitioners to appear before the investigating authority within 10 days for recording of statements, failing which the authorities were free to proceed in accordance with law. Neither unconditional protection from arrest nor a dismissal of the petitioners' apprehensions was granted; the outcome is best described as disposed of with balanced directions, in part in favour of the Assessee, since the petitioners avoided any immediate coercive step and secured a structured, time-bound process for the investigation.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: Gauhati High Court
  • Case No.: W.P.(Crl.)/40/2023
  • CNR: Not available on record
  • Coram: Hon'ble Mrs. Justice Susmita Phukan Khaund
  • Decision Date: 20.11.2023
  • Disposal Nature: Disposed of with direction to appear before investigating officer

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