Facts of the Case

Roop Charan Agarwal, his son, and M/s. Shree Duli Chand Chemicals Private Limited (of which Roop Charan Agarwal is a director) were subjects of an ongoing enquiry by the Directorate General of Goods and Service Tax Intelligence (DGGI), Bangalore Zonal Unit, in connection with alleged violations under the Central Goods and Services Tax Act, 2017.

The first two petitioners had obtained interim protection from arrest from the Telangana High Court on 4 August 2021, conditional on their extending full cooperation with the investigation.

They filed Writ Petition No. 18009 of 2021 seeking a mandamus restraining the respondents (DGGI officers, the Chief Commissioner of GST and Customs, Hyderabad, and the Commissioner of Commercial Taxes, Telangana) from arresting them under Section 69 of the CGST Act, on the footing that they would continue to cooperate with the enquiry.

By the time the matter came up for final hearing on 17 August 2023, counsel on both sides confirmed that the petitioners had entered appearance, recorded their statements, and that the DGGI inquiry was progressing and was likely to conclude soon.

Issues Involved

  1. Whether, given the petitioners' continued cooperation and the interim protection already in force since August 2021, any further protective direction was warranted pending conclusion of the DGGI inquiry.

Petitioner's Arguments

  • The petitioners had extended full cooperation with the DGGI's investigation throughout, in compliance with the conditions of the interim protection order.
  • They undertook to continue cooperating as and when called upon by the department for further clarification, and sought continuation of protection from arrest until the enquiry concluded.

Respondent's Arguments

  • No specific opposition to continuation of the interim protection is recorded; the respondents' counsel appeared and the enquiry was confirmed to be progressing towards conclusion.

Court Order / Findings

  • The Division Bench noted that the petitioners remained under interim protection since 4 August 2021, had not been arrested, and had rendered full cooperation to date.
  • Finding no useful purpose in keeping the writ petition pending, the Court disposed of it by directing the respondent authorities to conclude the pending inquiry in accordance with law, at the earliest, without insisting on arrest of the petitioners until final orders were passed.
  • The petitioners were left with the right to pursue appropriate legal recourse depending on the outcome of the final orders in the inquiry.
  • No costs were awarded.

Important Clarification

This order continues an existing status quo — protection from arrest during a pending investigation, conditional on cooperation — rather than laying down any fresh interpretation of the arrest power under Section 69 of the CGST Act. It is a useful illustration of how courts handle ongoing DGGI probes where a taxpayer is cooperating, but it does not decide the broader legal standard for when arrest is or is not warranted under GST law.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — Section 69 (power of arrest) and Section 132 (punishment for certain offences), the core provisions at issue.
  • Constitution of India, 1950 — Article 226, under which the writ petition was filed.
  • Code of Criminal Procedure, 1973 — Section 151 CPC application for interim protection filed alongside.

Decision – In Favour of

Decided in favour of the petitioners, whose protection from arrest under Section 69 CGST Act was continued until conclusion of the DGGI inquiry, subject to their continued cooperation — but this was a fact-specific continuation of an existing status quo rather than a decision laying down a new legal principle.

Case Details

  • Court: High Court for the State of Telangana at Hyderabad
  • Case No.: Writ Petition No. 18009 of 2021
  • Coram: Justice P. Sam Koshy and Justice Laxmi Narayana Alishetty
  • Date of Order: 17 August 2023

Link to Download the Order

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