IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE AMIT RAWAL FRIDAY, 26TH DAY OF JUNE 2020 / 5TH ASHADHA, 1942 WP(C).No.12710 OF 2020(K) PETITIONER/S: 1 SURESH KUMAR P.P. AGED 44 YEARS S/O.P.S.PARAMESWARAN, MANAGING DIRECTOR, KERALA COMMUNICATORS CABLE LTD., ADMIN OFFICE AT FIRST FLOOR, 142-H 1A, COA BHAVAN, TOUNDIYAL ROAD, PANAMPILLY NAGAR, COCHIN, KERALA-682 036, FORMERLY AT CC 28/491, GIRI NAGAR, KADAVANTHARA, COCHIN-20. 2 ABOOBACKER SIDHIQUE, AGED 59 YEARS S/O.CHERIYA HAMZA, DIRECTOR, KERALA COMMUNICATORS CABLE LTD., ADMIN OFFICE AT FIRST FLOOR, 142-H 1A, COA BHAVAN, THOUNDIYAL ROAD, PANAMPILLY NAGAR, COCHIN, KERALA-682 036, FORMERLY AT CC 28/491, GIRI NAGAR, KADAVANTHARA, COCHIN-20. BY ADV. SRI.SANDEEP GOPALAKRISHNAN RESPONDENT/S: 1 DEPUTY DIRECTOR DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI), THIRUVANANTHAPURAM ZONAL UNIT, SREEDHARNYA BOULEVARD, TC NO.2/3603, OPPOSITE BIG BAZAR, KESAVADASAPURAM, PATTOM P.O., THIRUVANANTHAPURAM-695 004, E-MAIL ID- DGGSTI.TRU@GOV.IN 2 SUPERINTENDENT, ERNAKULAM RANGE-3, CENTRAL EXCISE BHAVAN, KATHIKKADAVU, KOCHI-682 017. E-MAIL ID- EGST.TIO403@GOV.IN 3 ASSISTANT COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE (AUDIT) CIRCLE-IV, CENTRAL EXCISE BHAVAN, KATHIKKADAVU, KOCHI-682 017, E-MAIL ID-CGSTAUDIT43@GMAIL.COM 4 SENIOR INTELLIGENCE OFFICER, DIRECTORATE GENERAL OF GOODS AND SERVICES TAX INTELLIGENCE, THIRUVANANTHAPURAM REGIONAL UNIT, WP(C).No.12710 OF 2020(K) 2 SREEDHANYA BOULEVARD, TC NO.14/3603, OPPOSITE BIG BAZAR, KESAVADASAPURAM, PATTOM P.O., THIRUVANANTHAPURAM-695 004. E-MAIL ID- DGGSTI.TRU@GOV.IN 5 RENN ABRAHAM, ASSISTANT COMMISSIONER-GST, BUILDING NO.41/3945 ABC, CLAS TOWERS, KARGIL LANE, OLD RAILWAY STATION ROAD, NEAR JC (LAW), ERNAKULAM-682 018. E-MAIL -EKMACISPLCIRI@KERALATAXES.GOV.IN OTHER PRESENT: SRI MATHAI M PAIKADAY, SR ADV FOR P, GP DR THUSHARA JAMES , SRI SREELAL N WARRIER , SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26.06.2020, COURT ON SAME DAY DELIVERED FOLLOWING: JUDGMENT Dated this 26th day of June 2020 Petitioners, 2 in numbers, Managing Director and Director of Kerala Communicators Cable Ltd., through instant writ petition under Article 226 of Constitution of India has approached this Court with following prayers: i. Issue writ in nature of Certiorari or any other appropriate writ, order or direction quashing Exhibit P2 as illegal and unauthorized. ii. Issue direction to refund with interest to petitioners Rupees One Crore collected by Respondent Nos.4 and 5 as evidenced by Exhibit P3. iii. Issue appropriate writ, order or direction quashing Search and seizure proceedings initiated by 1st respondent against petitioner under Section 67, to extent that Audit under Section 65 of Act for Financial year 2017-18 is still pending. iv. Issue writ in nature of declaration, declaring that petitioner is not liable to pay GST on revenue share retained by LCO. v. appropriate Writ, Order or Direction to Respondents 4 and 5 to adequately compensate Petitioners for causing damage to adequately compensate Petitioners for causing damage to reputation of Petitioners and for their mental agony. 2. In support of aforementioned reliefs, it is alleged that they are compelled to approach this Court against arbitrary, illegal and malafide action of respondents, particularly, No.5, Assistant Commissioner-GST, in harassing them by taking cover under Section 67 of CGST Act, 2017 and their WP(C).No.12710 OF 2020(K) 4 personal liberty is violated by respondents 4 and 5 by taking them into custody on 9.6.2020 and amount of Rs.One Crore has been extorted. It is averred that they were released from custody at intervention of their Advocate at midnight and there has been threatened violation by respondents 4 and 5, Senior Intelligence Officer and Assistant Commissioner-GST much less against guidelines issued by Central Board of Indirect Taxes and Customs. Even for less harmful summons provisions, it is strictly laid down by CBIC that such provisions should not be misused in field. Vide notice dated 17.3.2020 Ext.P2, Respondent No.4, Senior Intelligence Officer, requested 1st petitioner to provide details of entire list of Local Cable Operators. Pursuant to aforementioned notice, group of 9 officials under Respondent No.4, came to residence of Petitioner No.1 at 7.30 AM on 9.6.2020 in three vehicles has taken him in custody. So called Summon was issued to them under Section 70(1) of Act. Petitioners had no WP(C).No.12710 OF 2020(K) 5 other choice but under protest given cheque of Rs.One Crore. 3. It is submitted that action of respondents was purportedly under Section 67 of Act, read with Rule 139 of GST Rules, 2017. respondents have taken into custody so many documents and have issued order of seizure. In fact Kerala Communicators Cable Ltd., is company registered under Companies Act, 2013 and also with GST Department with Registration No.AACCK9882F1ZD and engaged in providing cable services to its customers as Multi Service Operator under regulation issued by Telecom Regulatory Authority of India (TRAI). As per mandate of TRAI Regulations, petitioner KCCL is required to execute interconnection Agreement with Local Cable Operators on terms provided by TRAI. It is contended that subscription for Cable Services is collected by LCO from subscribers against invoice issued as per Agreement. petitioners issue WP(C).No.12710 OF 2020(K) 6 invoice on LCO for eligible revenue share. responsibility to pay taxes on revenue share is on respective parties. Petitioners also received notice purportedly, under Section 65 of Act intimating conduct audit. 4. Learned counsel buttressed arguments by saying that petitioners assessee had never defaulted any of statutory responsibilities and there is not single instance brought on record by Department of any wilful or knowledgeable violation. Even seizure of documents have not been done by proper officer. It is well settled law that statutory authority must exercise jurisdiction within four corners of statute. There is no provision in Act forcing petitioners to issue cheque of Rs.one crore which has erroneously been accepted by Intelligence Officer as evidenced from Ext.P3 dated 9.6.2020. Even two months have gone by, petitioners received notice for conducting audit only on 15/18.5.2018, Ext.P5. WP(C).No.12710 OF 2020(K) 7 5. procedure adopted for conducting audit would result into inaction contemplated in Chapter 15 of Central Goods and Service Tax Act, 2017. But without referring to provisions of Act, officers empowered cannot misuse their powers to detain person without any authority of law or accept payment. Ext.P2 notice issued by 4 th respondent is without authority of law. It does not show provisions of Act; whether it is summoned under Section 70 or some other procedure 6. Mr.Sreelal Warrier raises objection regarding maintainability of writ petition. Section 70 of Act empowers Intelligence officer to issue summons and give evidence and produce documents. Even Section 69 envisages procedure of arrest. Section 71 also gives liberty to access business premises. issuance of notices for auditing is parallel procedure; other provisions of statute cannot impose any restrictions. None of notices envisage that officer at any point of time demanded money it was WP(C).No.12710 OF 2020(K) 8 voluntary act of making payment toward of liability. There has been no demand so far. Even alleged cheque given by petitioners on perpetual request has not been presented as they don't have sufficient money in account and urging this Court for dismissal of writ petition. 7. I have heard learned counsel for parties, appraised paper book and of view that there is no force and merit in submission of learned Senior counsel for petitioners, Sri. Sandeep Gopalakrishnan, on account of following reasons: a) provisions of Act like inspection of premises, powers of arrest and summons to produce documents have been incorporated with aim to prevent evasion of GST at hands of unscrupulous taxpayers. Observation of mine would not be connected with act of petitioners as it is general observation. If at all, residences of petitioners were visited by officers of GST, they could have produced on record video WP(C).No.12710 OF 2020(K) 9 recording, as it cannot be expected that petitioners, who are Managing Director and Director of Media Company would not have installed cameras outside their houses. b) This Court during course of hearing specifically asked learned senior counsel for petitioners as to whether cheque has been encashed or not. On instructions, he said that there is no such information with same. Thus statement of Mr.Sreelal Warrier that cheque has not been presented on perpetual request for time being remained unrebutted. c) Be that as it may, in my view, interference in process issued for auditing of books as well as order of seizure of documents would help department in co-relating entries in documents and at time of auditing of account. procedure for taking further action has been prescribed under Chapter 15 of 2017 Act regarding determination of tax not paid, short paid, erroneously refunded, input tax credit WP(C).No.12710 OF 2020(K) 10 wrongly availed, utilized etc., and Section 74 deals with short payment of tax or not paid or erroneously refunded or input tax wrongly availed or utilized for any willful misstatement of suppression of facts. d) In my view it would be too premature to comment upon act of respondents and cannot be said to be against provisions of statute or misuse, warranting interference under Article 226 of Constitution of India. It would not be appropriate for this Court to form opinion with regard to alleged conduct of petitioners which is not supported by any material to prima facie bring case within realm of judicial review. For reason aforementioned, writ petition sans merit and accordingly dismissed. Sd/- AMIT RAWAL sab JUDGE WP(C).No.12710 OF 2020(K) 11 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 GUIDELINES ISSUED BY CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, NEW DELHI ON GOODS AND SERVICE TAX (GST), 3RD EDITION, DATED 15.12.2018. EXHIBIT P2 NOTICE DATED 17.03.2020 ISSUED BY 4TH RESPONDENT TO PETITIONERS. EXHIBIT P3 ACKNOWLEDGEMENT OF PAYMENT UNDER PROTEST DATED 09.06.2020 SIGNED BY 4TH RESPONDENT. EXHIBIT P4 ORDER OF SEIZURE IN FORM GST INS-02 DATED 09.06.2020 ALONG WITH LIST OF DOCUMENTS SEIZED. EXHIBIT P5 NOTICE FOR CONDUCTING AUDIT IN FORM GST ADT-01 DATED 15/18.05.2020 ISSUED BY 3RD RESPONDENT. Suresh Kumar P.P. / Aboobacker Sidhique v. Deputy Director Directorate General of Gst Intelligence (Dggi), Thiruvananthapuram / Superintendent Ernakulam Range-3, Kochi / Assistant Commissioner Central Tax And Central Excise Audit