M/s Keshan Industries LLP V. Union of India

WP/22459/2023

AI Insights

The case involves M/s Keshan Industries LLP and its designated partner Vikash Kumar Keshan, who filed a writ petition against the Union of India and other respondents challenging the initiation of an investigation by the 2nd respondent (Commissioner for Central Tax, Central Excise and Service Tax, Medchal Commissionerate) while another investigation by the 3rd respondent (Additional Commissioner, (ST) (Grade-I), ENFT, Commercial Taxes Department) was already pending. The petitioners argued that the initiation of the 2nd respondent's investigation was illegal and arbitrary, violating Section 6(2)(b) of the CGST Act, 2017, as it pertained to the same issue under investigation by the 3rd respondent. The court, after considering the submissions and the scope of the investigations, concluded that the investigations were for different periods and thus not in violation of the cited section.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 739834 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 24-08-2023
• Assessment Year: misc
• Other Referred Cases: VGN Projects vs. Assistant Commissioner (State Tax)
• Laws Referred To: Article 226 of the Constitution of India, Section 6(2)(b) of the CGST Act, 2017
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: GADI PRAVEEN KUMAR; DOMINIC FERNANDES
• Assessee Lawyers: B ARJUN RAO
• Keywords: Arbitrary; Cash; Illegal; Investigation; Seizure; Silver bars; Writ of Mandamus; Violation of CGST Act
• Section: 226; 6(2)(b)

Judgement Text

"[ 3386 ] HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY FOURTH DAY OF AUGUST TWO THOUSAND AND TWENTY THREE PRESENT THE HON'BLE SRI JUSTICE P. SAM KOSHY AND THE HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WRlT PETITION NO: 22459 OF 2023 Between: 1 M/s Keshan lndustries LLP, having its Registered office at Plot No.26/F, TSIIC lndustrial Park, Mupprreddypally - Village,- Toopran Mandal, lvledak District, Represented by its Authorised Signatory Piyush More 2. Vik'ash Kumar'Keshan, Designated Pirtn6r of M/s Keshan lndustries LLP, R/o' H.No. 10-02-274, Flat No.- 201, Mahalakshmi Fortune, West Merredpally Secunderabad-500026 ...pE.,oNER AND 1. Union of lndia. Department of Revenue, Rep. by its Secretary, Room No 48C North Block, New Delhi-1 10001 . 2. Commissioner for Cenkal Tax, Central Excise and Service Tax, Medchal Commissionerate, Medhcal GST Bhavan, H.No 1 1-4-649iB, Lakdikapul, Hydeerabad-50004. 3 A6drtional Commissioner, (ST) (Grade-l) ENFT., Commercial Taxes Department, Hyderabad, Telangana. ...RES'.NDENTS Petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to l. issue a order, direction, order or Writ moie particularly one in the nature of writ of mandamus, dectaring the action of the Respondent No.2 in initiating the investigation bearingFileNoGEXCOM/AE/INV/GST/I533/2023-AE-MDCL, datedl0-08- 2023 while another investigation is pending on the file of office of commissioner of state Tax, Nampally, Hyderabad i.e.. Respondent No.3 with regard to the same issue as illegal, arbitrary and in violation of Section 6 (2) (b) of the CGST Act,2017 ' ll, issue a writ or order in the nature of mandamus to return cash amount of Rs. 41,00,000/- and Silver weighing 6311.453 grams immediately to the Petitioner No.2. lll. issue a writ or order in the nature of mandamus, directing the Respondents to refund Rs. 2,00,00,000/- (Rupees two crores only) along with applicable interest to the petitioner f irm. I I i I lV. lssu: a ry I [er anrl f urthet order as this Honour':bl: r]oL rt may deem f it and proper in the circLtr tiln()es of the case lA NO: 1 OF 2023 Petrtion unde lle:tion 151 Ct)C praylng that in the oi 1)tlmstances stated in the affidavit filed n s116 r):)rt of tle pet ton the Hrgh court nrey t;e pleased to direct the RespondentNo:2)r€'tUrnCashamountofRs,400]](]/:rndSilverweighing 63ll.453gralllSnl.eclatelytothr-.lretitronerNo,2whicl.rretakenaWaybythe Respondent No.2 fr nr tre Petitioner No.2 on 1O-OB-2(23 perr(.lrng disposal of the writ petition in the rntere ;t of lustice lA NO: 2 OF 2023 Petitron unc€ l)e:tion 151 C[)C orayrng that in the r:i 'r;rtmstances stated in the affidavit filed in su p rrt of lhe peir orr the High cortrt n-rz y be oleased to Stay all further proceedr|g: n File No. GE)(COt ,4/AE/lNV/GS 7153:|,',:: 02:| AE-lvlDCL., dated- 1OlOBl2O23 initiated t,r the Responclent No 2 pending d spo:;: t rrf tl e Writ petition in the interest of justtce lA NO: 3 OF 202'j Petitton tl rra € affidavit filed n sttS Petitioners to file tl dated 23 06 202i, ts to partner of Pettt 11.08.2023 4) SLrr Summon issLred t( Petitioner No. 1 tr; s Counsel for the Pe lle:tror- -1 5'1 C['C oraying that in the r;i-r;rrmstances stated in the o:rrt of lhe petrttcn. the High Cour: may ll: p eased to permit the rs Alditional affiCavrt along with tl-e dc'cttrnents ie, 1) Summons ,;r. ecl on the Petitioner No. 1 , 2) Su mnrorr r: ateC 1 1 08.2023 issued :>.rer No. 1, 3) Reply by Petitrorrer to lre summon issued on rnrort issued to partner of Petitiorer Nc. 1 dated 16 08 2023, 5) rartne' of Pet t oner No 1 datec 17.At 2023 and 6) Reply by rr rnron da,ed 16.08 2023 and rece ve the sam -' on record itioners: SRI B. ARJUN RAO Counsel for Respo rrlent No. 1: SRI GADI PRAVEEN KUMAR (Dy SOLICITOR GENERAL OF lllDlA) Counsel for Respo',oent No. 2: SC FOR CENTRAL Tl'X Counsel for Respo rcertt No. 3: SRI DOMINIC FERNANDES The Court made th r lollowing: ORDER --7 THE HONOURABLE SRI JUSTICE P. SAM KOSHY AND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY Ii/rit Petition No.22459 of 2023 ORDER: p('titioncrs undcr Articlc 226 o{ the Constitution of Inclia scclring ,,, WriL oj Mct.n dctrnus hy declaring the action of 2,,d rcsllondcrlt in ir;itiating investigation bearing Itilc Nr_,.GFlXC()N1t I i l,lill //(iS'f/ 1533 /2023 AFI-MDCI-. cjate d (ir:rrcral ol lndir-r. lr>r' the l'' rcspondcnt; learne':d Slzuiclirrg investigatron 1S pe nding or1 ttre file of thc Otlice of Comrnissic,rr r: r ol !ltl'rLc '[ax, Nampaliy, Hydcrabac], i.c., thc 3',1 rcsponrl-'nt wittr rcgarcl 1.o the sarne issue as illcgal, arbitrary and in 'riolation of Section 6(2)(b) of Lhe Central Goods and Servii:cs '['ax Act, 201,7 lfor short, 'the Act') 09 I 1.O.OB ?.0'2:l Iirrrpugncct hercirr) while anothcr 2. I-lc-zrrd Mr'. il. ArjLrn Ilao, iearncd counsel for thc pc'.iri(incrs; Mr. (i. fit'avcc'n Kunrar, learned D]'. Solicitor The instanl Wrir Petition has been tilcd bv the I {r. Donrir c lrelnandes. lcirrncrl Govr_,t'itn ,'n( I)leadcr lor Commrrrr:ia .a)r, for ther il ,r r-r:spondcnt 3. Tlrr: c irllt:nge 1o tl-,(. sirirl pt-occcrltlqs li the gror-urcl ,rf t1-ic Conrllssiont:r of Stlr,, Iirx Nampally, 1 ,rrmarily on Hydcrabird _) rcl responrlenl ltcrCin) l-r: ,ini1 i tr.ro nitiated an investiEl:rt io / er-ir1uir,1, on lltc santc seI iri f,r,rt ; c,rr-lie r to the proce cclinq,. r Irzru,t.r 1lr, tl-r: -2,,,1 rcspond(,iti . t( ]l(.i, the sarne being irr vio rrticn ol Secti-rn ()(2)(bt of th,. , c:t 4. Learnc I counscl [or- t]ri. l)ctitloncr i !Ll.c Ll (' attenlion of the (.lo-rr lo Annexurr, l).7 ritrtcd 1.1 .102 3. u'hereby L) ii the 3.r r-csl) ,r rdenl. had callcci upon thc pe ii tt.)n(rrs seeking lor cerlilin ilfc,rmation rr::r1ing to cn bt.cr_'.t- r:r.r so as to substar tiriLr . ris; contentiln that thc St ite arr:lir ritie s have alread.y u-titi rt,:d proceecltngs on thc samc sct ,:,[-lz cts. There have becn f r,: ttLer subsr:rlucnt corrcsp( r'r(lr:1 ,:t i lso issued tl-re 1''r r es;pondcnt s,'ckiltg furtl- cr < li Lr.il:cations / informa'ior-r / documcnts ir-r Ann,,xLlr. I, g, dated 20.05.2O2..). IL is subseqtrcrrtl.l, thzrr the 2,: I r(..i1)( nclent had bv ,: .1.' PSK.J & t,NA.J lvp ll li9 l0?:l now initiated proceedings against the petitioners on the allegation of petitioners having r.iolated the provisions of the Act, and for which a raid rvas r:onducted on O9.OA.2O23. In the search and seizure proceedings, many incriminating materials were found including cash amount of {.41 lakhs and (28 Silver Bars rneighing 6,311.453 gms. and a Panchnama in this regard was also prepared. Pursuant to the search and seizure proceedings, the petitioners thereafter is said to have paicl an amount of {.2 crores. Meanwhile, the 2nd petitioner r,i'as also arrested. It is this initiation of proceedings on the seizure of cash and silver bars from the premiscs of petitioners which has been assailed by the petitioners in the present writ petition. 5. The primary contention of learned counsel for the petitioners is that the respondents have been conducting arr enquiry for the saftle subject matter and thus it is hit by provisions of Section 6(2)(b) of Lhe Act 6. Having heard the contention of learned counsel for the petitioners, it would be relevalt at this stage to take note of i I l i I l':(.l ,r . , ..1 1 l) r: l.lit) l0ll pro isc) to tir:ction $(21(1ll c,f the r c1. u'lrici'r j:; rclrodlrced as .l undcr \"ie,:tior 6(2)(b, iL:here a prop 'r olf c,'t t.trier the C,?nt.ra. jcods ond ,je;L;lce Tctr:. Act l'tt: i'Lttitlted dlLA pracea ir gs; ott a sub-iect nTatter, tlo 1;t cx ectll. t91s :;ltcLLl be iti.tiate, bg tht: prope,' cfftcer uncler lhts 4'r rrl lt.r' .sarne st r bj t: r:1 t i att.e r.'' procee (11ngr ce ing initiated against the o,::itiorrcrs on the same subje t rrratler 7, A plai r reading of thc aforesaid p;.or i:;io .r v'oulcl reflect thart th e bz - ol- parallel proceedirlgs is orrlv in he et,eut of parallel prc :r'erlings initiatr:d on t.hc sar:rc sr. rjr't t ma1 ter 8. On th ) previous d,atr: of hearir-ig t,-r.s Co:rt, in very categolical errrs, directe:d the learned jt:rnrlinq Cour-rscl for the 2\". res .rondent to lincl o:ut uheth(r r\"h(-'lc is a parallel 9 . NIr. I r rr.inic Fernzmdes. learned Govc : 1m cnt Picader for Commt rr:izrl tax, acpearing for hr: -cspondent, submitted :lat on instnrctions he has bcc : inbrmed that tl-re invcslig ,r1 ion e nquirl r,,'hich has be ':t-r <:or'ductccl bv the 2''d respon [r,:nl is for tlie period bctrr t:r:t r , pril, 2O2O :.1 ==ry._-\"7 f PSK.J & LNA.J p ttl i9 102-r I on rards and thc sztrne is specifically irt respect of. violation under the provisions or the Act. He further submitted that, so far as seizure of cash ol t.4l lakhs is concerned, the said aspect had already been rcrerrecl ro the Income Tax Department who in turn may be taking appropriate proceedings in respect of the said cash amount received. He lurther submitted that or-rcc u,hcn the document seized speaks of the proceedings initiatcd by the 3,a respondent to be that of the period betu,een ,, pril, 2020 to March,2023, that itself establishes the fact that therc were no further proceedings drawn by the 3,..r respondent lor thc subsequent period. In the circumstances the 2nd r.espondent is not precluded or barred under Section 6(2)(b) from initiating proceedings for a subsequent pcriod where the respondents have received inforination of tht: pctitioners having violated the provisions of the Act ar-rd have also evaded payment of tax payable under the Act. 10. Learned Standing Counsel lor the 2nd respondent, on the other hand, also opposing the petition, submitted that if at all if the contention of the pctitioners is that of the _ -zY.r ---r.--E ,:: --.- / t'.r. .,. l. r L t \":ii, ll|ll - p1'o('('c(lin! g,-'ttr-l!l o 'or lappcd. thc 1r rti i:rrt r-s iravc all remcrrl', irv i alrle to Lhr:n. to entcr- :il)llc;-r1rr nc,r br'lirr-c the authoriti,:s :',rr:cenr,'d and arpprisc thc ,rrr'lLorLtir s <'onccrrred of thc srrr r also thc l't r( )v(-'ry, ol (28) Silver Bars bi. fiLing a1>propriate olr.1t r'1rr,r.r sr in this rcg:rrd zrnd rv'ricl-r t -re r<:sponcl:nt-authoritics slr:t,l dr.rlv r:onsicier. The pctitrr' 1orri, zrs sr-tch. are liot rc lt.irlc:l tr letiliopers g,oulc be a 1 libsrty to r.arsc all ()l)l(.( tr( 's bt:lolc thr l.cl rcsporrdt:r-it : a tcl thc 2', rcspon,l.nl (,ll duc vcrif.czrtion of lacts sh,at. ve.ily whcthr:r- 1,hcr. ,,-. pr *rllr-'l rlroceeclings initiated by th,: 3.,r rcsJro.clc.t ()r' ltot rrrrl tt l D) i I I I i "