The court emphasized the statutory power to summon persons to give evidence and produce documents in inquiry, and clarified that the summons did not authorize arrest but were for completing the investigation into evasion of GST.

JUDGMENT :

Milind N. Jadhav, J.

1. Heard Mr. Mathew Nedumpara along with Ms. Nikita Panhalkar, Advocates for the petitioners; Mr. Pradeep Jetly, senior counsel along with Mr. J.B. Mishra, Advocate for respondent Nos.1 to 4; and Mr. Rahul Punjabi, Advocate for respondent No.5.

2. By this petition filed under the provisions of Articles 226 and 227 of the Constitution of India, petitioners have, inter alia, sought stay of proceedings and consequential penal action, initiated against the petitioners pursuant to issuance of summons dated 03.04.2019 by the Intelligence Officer in the office of the Directorate of GST Intelligence under section 83 of the Finance Act, 1994 ("the Finance Act" for short), read with section 14 of the Central Excise Act, 1944 (“the Central Excise Act” for short) read with section 174 of the Central Goods and Services Tax Act, 2017 (“the CGST Act” for short) to tender oral evidence and further summons dated 15.04.2019, 31.10.2019, 04.08.2020 and 12.10.2020 under section 83 of the Finance Act read with section 14 of the Central Excise Act read with section 174 of the CGST Act to tender oral/documentary evidence in respect of evasion of goods and services tax (GST).

3. Before we advert to the submissions made on behalf of the respective parties, it will be apposite to briefly refer to the relevant facts:-

3.1. Petitioner No.1 is a company registered under the Companies Act, 1956 and is engaged in the business of trading in consumer goods, FMCG products, cameras, batteries etc. since the last 34 years. Petitioner No.2 is the Managing Director of petitioner No.1.

3.2. On 03.04.2019 Directorate General of GST Intelligence, Mumbai conducted a raid on the premises of petitioner No.1 and respondent Nos.6 and 7 and seized several documents, books of accounts, hard disks etc. for the purpose of GST investigation into alleged tax evasion. A panchnama dated 03.04.2019 was drawn up duly signed by the Senior Intelligence Officer in the office of respondent No.2 i.e. the Directorate General of GST Intelligence, Mumbai Zonal Unit.

3.3. In the meanwhile respondent No.3 i.e. Bombay Sales Agency, a financial creditor of petitioner No.1 invoked section 7 of the Insolvency and Bankruptcy Code, 2016 by filing application in the National Company Law Tribunal, Mumbai. ("NCLT" in short). By order dated 23.09.2019 NCLT admitted the application of respondent No.3 and declared a moratorium in terms of section 14 of the said Code and appointed respondent No.5 i.e. Ms. Palak Swapnil Desai as Interim Resolution Professional (“IRP” for short), further directing that the assests of petitioner No.1 should not be liquidated until the insolvency process was completed.

3.4. On 03.04.2019 respondent No.2 issued summons to petitioner No.2 i.e. Mr. Kunal Jiwarajka (Director) under the provisions of under section 83 of the Finance Act read with section 14 of the Central Excise Act read with section 174 of the CGST Act to tender oral evidence in relation to inquiry regarding evasion of service tax/GST being undertaken by respondent No.2.

3.5. On 15.4.2019 respondent No.2 issued a second summons to petitioner No.2 i.e. Mr. Kunal Jiwarajka (Director) under the said provisions to tender oral evidence in relation to inquiry about evasion of service tax/GST being undertaken by respondent No.2.

3.6. On 31.10.2019 respondent No.2 issued a third summons to petitioner No.2 i.e. Mr. Kunal Jiwarajka (Director) again under the said provisions to tender oral evidence in relation to inquiry about evasion of service tax/GST being undertaken by respondent No.2.

3.7. On 04.08.2020 respondent No.2 issued a fourth summons to petitioner No.2 i.e. Mr. Kunal Jiwarajka (Director) again under the said provisions to tender oral evidence in relation to inquiry about evasion of service tax/GST being undertaken by respondent No.2.

3.8. In the meanwhile, on 31.08.2020 petitioners filed a suit S.C. (ST.) No. 3811 of 2020 in this Hon'ble Court as well as Writ Petition (AD-HOC) LD-VC No.116