Facts of the Case

  • The petitioner was a Director of a company engaged in import business.
  • GST Intelligence conducted a search at premises linked to the petitioner.
  • It was alleged that individuals connected to the petitioner were illegally detained and harassed by officials.
  • The petitioner apprehended similar harassment and sought protection.
  • The petitioner expressed willingness to cooperate in investigation upon receiving summons.
  • The investigation pertained to alleged fraudulent Input Tax Credit through fake invoices.

Issues Involved

  1. Whether a person summoned under GST law is entitled to presence of a lawyer during interrogation.
  2. Whether GST officers can conduct interrogation without allowing legal representation.
  3. Whether protection against alleged harassment should include mandatory presence of counsel.
  4. Applicability of precedents relating to police interrogation to GST/customs proceedings.

Petitioner’s Arguments

  • Petitioner feared physical, mental, and verbal harassment during investigation.
  • Relied on Nandini Satpathy vs P.L. Dani (1978) to claim right to legal counsel during interrogation.
  • Argued that offences under CGST Act are punishable up to 5 years, thus arrest should follow safeguards under CrPC.
  • Asserted willingness to cooperate and join investigation.
  • Claimed interrogation without counsel violates constitutional protections under Articles 20(3) and 21.

Respondent’s Arguments

  • Investigation relates to serious GST fraud involving fake invoices and ITC claims.
  • GST officers are not police officers; hence different legal standards apply.
  • Relied on Pool Pandi vs Superintendent, Central Excise (1992) denying right to lawyer during interrogation.
  • Presence of lawyer would frustrate purpose of inquiry.
  • Petitioner concealed material facts including prior proceedings.
  • Under Section 70 CGST Act, authorities have power to summon and examine any person. 

Court’s Findings / Order

  • The Court held that presence of a lawyer cannot be allowed during interrogation by GST authorities.
  • Relied on Supreme Court judgment in Pool Pandi case, which distinguishes earlier rulings like Nandini Satpathy.
  • Clarified that GST/customs officers are not police officers, and proceedings are distinct.
  • Modified earlier order which had allowed presence of counsel.
  • However, Court reiterated that:
    • No unlawful methods or coercion can be used during investigation.
    • Authorities must act within legal boundaries.

Important Clarification by Court

  • Right to counsel during interrogation is not absolute in economic offences under GST/customs law.
  • Inquiry under CGST Act is distinct from police investigation.
  • Protection against coercion exists, but does not extend to presence of lawyer during questioning.
  • Authorities cannot use illegal methods; any misconduct is actionable.

Link to download the order -  https://delhihighcourt.nic.in/app/case_number_pdf/2019:DHC:5780/BS06112019CRLW26862019.pdf

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