Introduction
In the case of Shiv Kumar Deora v. Union of India, through the Secretary and Others[i]*, *the Jharkhand High Court (‘JHC’) observed and directed the GST officers (‘Respondents’) that the proper officer under the Central Goods and Services Tax Act, 2017 (‘CGST Act’) shall not force or coerce a summoned person to depose its statements after the office hours. The JHC directed that the Respondents must follow the guidelines and instructions issued by the Commissioner (GST-Investigation) and the Central Board of Indirect Taxes and Customs (‘CBIC’) when summoning any person for questioning under s, 70 of the CGST Act.
Brief Facts
The case revolved around the provisions of the CGST Act, which required the summoned person to be truthful during the inquiry and investigation. The individual might also be asked to produce documents and evidence and cooperate during the inquiry, which is deemed to be a court proceeding as per s. 70 (2) of the CGST Act. If the summoned person gave false statements, the GST officers could prosecute such individuals under ss. 193 and 228 of the Indian Penal Code, 1860 (IPC).
In this case, the Petitioner was called upon by the GST officers and was questioned until after midnight, i.e., beyond office hours. The Petitioner was allowed to leave only after the GST officers were satisfied with his statement. Consequently, the Petitioner filed the current petition challenging the interrogation of the GST officers after work hours.
Observations
The JHC observed that the Constitution of India (‘Constitution’) safeguards the fundamental rights of all Indian citizens. The JHC placed reliance on the landmark case of Kharak Singh v. State of U.P.[ii], where the Apex Court had observed that repeated visits by the police to the accused person's home violated the right to privacy under a. 21 of the Constitution. The JHC further placed reliance on the case of K.S. Puttaswamy (Privacy-9J) v. Union of India[iii]*, where the *Apex Court held that the right to privacy is an inherent part as laid down in the Constitution.
The JHC noted that deciding whether to speak or not while giving a statement before tax authorities or police officers has always posed a dilemma for the summoned persons due to serious implications. The JHC also noted that no person accused of any offence should be compelled to testify against themselves, as per a. 20(3) of the Constitution.
The JHC held that a proper officer under the CGST Act should not force or coerce the person summoned to give a statement after office hours. Furthermore, the JHC noted the Petitioner’s contention that the GST Intelligence and Investigation Manual, 2023 (‘Manual’) specifies that statements should generally be recorded during office hours. However, the Manual also notes an exception in clause (iv) for cases where there is a risk of the summoned person absconding during the inquiry, suggesting such cases could be treated as exceptional.
Considering the facts and circumstances, the JHC closed the current proceedings and directed the GST officers to follow the guidelines and instructions issued by the Commissioner and the CBIC while summoning a person by exercising their powers under s. 70 of the CGST.
Analysis & Conclusion
The JHC has reproduced the GST Manuals and Circulars without addressing the crucial exception for the GST officers recording statements during office hours. This absence of consideration indicates a mechanical application of the rules rather than a thoughtful legal analysis. Furthermore, the complete closure of the proceedings against the Petitioner appears to be a disproportionate direction, particularly considering the denied bail of the Petitioner on 16.04.2024. A more targeted remedy, such as requiring only the after-hours statements to be re-recorded, could have been more appropriate. Additionally, the broad condemnation of recordings, without considering the exception for business hours, may discourage the tax officers from exercising their necessary discretion and hinder future investigations. Finally, the lack of substantial legal analysis and engagement with the arguments presented undermines the legitimacy of the decision and makes it ripe for challenge before the Apex Court.
End Notes
[i] 2024 SCC Online lhar 1956.
[ii] AIR 1963 SC 1295.
[iii] (2017) 10 SCC 1.
Authored by Aishwarya Pawar, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.
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