SARTAJ ALI  Vs UNION OF INDIA & ANR.

W.P.(CRL) 2020/2020 Page 1 of 5
$~ Suppl. -25
* IN THE HIGH COURT OF DELHI AT NEW DELHI

+ W.P.(CRL) 2020/2020

SARTAJ ALI ….. Petitioner
Through Mr.Vijay Aggarwal with Mr.Syed
Urfee Haider, Advocates.

versus

UNION OF INDIA & ANR. ….. Respondent s
Through Mr. S.V. Raju, ASG with Mr.Ravi
Prakash, CGSC, Mr.Vinay Yadav,
Mr.Akshay Gadeock, Mr.Amit Gupta,
Mr.Sahaj Garg and Mr.R.Venkat
Prabhat, Advocates for UOI.

% Date of Decision: 19th January, 2021

CORAM:
HON’BLE MR. JUSTICE MANMOHAN
HON’BLE M S. JUSTICE ASHA MENON

J U D G M E N T
MANMOHAN , J: (Oral)
Crl.M.A.1684 1/2020 (exemption)
Allowed, subject to all just exceptions.
Consequently, present application stands disposed of.
Crl.M.A.16840/2020
1. The petition has been heard by way of video conferencing.
2. Present writ petition has been filed challenging the constitutional
validity of certain provisions of the Central Goods and Services Tax, Act,
2021:DHC:216-DB W.P.(CRL) 2020/2020 Page 2 of 5
2017.
3. This Court in a similar matter in Dhruv Krishan Maggu vs. Union of
India & Ors., W.P.(C) 5454/2020 has refused to pass any interim order
holding that it is not inclined to interfere with the investigation at this stage
and that too in writ proceedings. The relevant observations made by this
Court in Dhruv Krishan Maggu vs. Union of India & Ors. (supra) are
reproduced hereinbelow: –
(i) There is always a presumption in favour of constitutionality of an
enactment or any part thereof and the burden to show that there
has been a clear transgression of constitutional principles is upon
the person who impugns such an enactment. Further, laws are not
to be declared unconstitutional on the fanciful theory that power
would be exercised in an unrealistic fashion or in a vacuum or on
the ground that there is a remote possibility of abuse of power.
(ii) The Goods and Service Tax is a unique tax, ina smuch as the
power as well as field of legislation are to be found in a single
Article, i.e., Article 246 A. The scope of Article 246 A is
significantly wide as it grants the power to make all laws ‘with
respect to’ goods and service tax.
(iii) This Court is of the prima facie opinion that the pith and substance
of the CGST Act is on a topic, upon which the Parliament has
power to legislate as the power to arrest and prosecute are
ancillary and/or incidental to the power to levy and collect goods
and services tax.
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(iv) Even if it is assumed that power to make offence in relation to
evasion of goods and service tax is not to be found under Article
246A , then, the same can be traced to Entry 1 of List III. The term
‘criminal law’ used in the afore said entry is significantly wide and
includes all criminal laws except the exclusions.
(v) This Court, at the interim stage, cannot ignore the view is taken by
the Gujarat High Court with regard to application of Chapter XII
Cr.P.C. to the CGST Act.
(vi) In view of the Supreme Court judgment in Directorate of
Enforcement vs. Deepak Mahajan (supra) and the aforesaid
Gujarat High Court judgment, the arguments that prejudice is
caused to the petitioners as they are not able to avail protection
under Article 2 0(3) of the Constitution and/or the provisions of Cr.
P.C. do not apply even when CGST Act is silent, are untenable in
law.
(vii) Reliance on “no coercive orders” by counsel for the petitioners are
untenable as the Supreme Court in Union of India vs. Sapna Jain
& Ors. , SLP (Crl.) 4322 -4324/2019 dated 29th May, 2019 has
‘spoken its mind’.
(viii) This Court prima facie finds force in the submissions of the
learned ASG that the Central Tax Officers are empowered to
conduct intelligence -based enforcement action against taxpayers
assigned to State Tax Administration under Section 6 of the CGST
Act.
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(ix) What emerges at the prima facie stage is that it is the case of the
respondents that a tax collection mechanism has been converted
into a disbursement mechanism as if it were a subsidy scheme.
(x) In view of the serious allegations, this Court is not incl ined to
interfere with the investigation at this stage and that too in writ
proceedings. At the same time, i nnocent persons cannot be
arrested or harassed. Consequently, the applications for interim
protection are dismissed with liberty to the parties to a vail the
statutory remedies.
4. However, Mr. Vijay Aggarwal, learned counsel for petitioner states
that the order passed by this Court in Dhruv Krishan Maggu vs. Union of
India & Ors. (supra) is per incuriam as it is contrary to the Division Bench
judgment of this Court in Rajb hushan Omprakash Dixit vs. Union of
India & Anr. , 2018 (1) JCC 506 .
5. He further submits that subsequent to the Telangana High Court
judgment, the High Court of Punjab and Haryana in Akhil Krishan Maggu
& Anr. vs. Deputy Director, DGGI & Ors., C.W.P. No.24195/2019 (OM)
has refused to follow the Telangana High Court judgment and passed
interim orders.
6. However, this Court finds that another Division Bench of this Court
in Vakamulla Chandrashekhar vs. Enforcement Directorate & Anr.,
W.P.(Crl.) 852/2017 dated 08th May, 2017 had taken a diametrically
opposite view to the one enunciated in Rajbushan Ompraka sh Dixit vs.
Union of India & Anr. (supra). Moreover, the Supreme Court in The
Directorate of Enforcement vs. Karti P. Chaidambaram, TC (Crl.) No.003
2021:DHC:216-DB W.P.(CRL) 2020/2020 Page 5 of 5
of 2018 has transferred the reference made to a larger Bench of this Court to
itself. Consequently, as th ere are two contrary Division Bench judgments, it
cannot be said that the order passed by this Court in Dhruv Krishan Maggu
vs. Union of India & Ors. (supra) is per incuriam .
7. Further, the interim order passed by the High Court of Punjab and
Haryana in Akhil Krishan Maggu & Anr. vs. Deputy Director, DGGI &
Ors. (supra) is not binding o n this Court. Also as the Supreme Court in
Supreme Court in Union of India vs. Sapna Jain & Ors. , SLP (Crl.) 4322 –
4324/2019 has endorsed the Telangana High Court view, it cannot be urged
that this Court committed an error in law in not following the High Court of
Punjab and Haryana view.
8. Accordingly, on parity of reasoning, the application for interim relief
is dismissed in view of the order passed by t his Court in Dhruv Krishan
Maggu vs. Union of India & Ors. (supra) .

W.P.( Crl.) 2020/2020
9. List the matter before the roster Bench on 18th March, 2021 along
with the case of Dhruv Krishan Maggu vs. Union of India & Ors. (supra) .
10. The order be uploaded on the website forthwith. Copy of the order be
also forwarded to the learned counsel through e -mail.

MANMOHAN, J

ASHA MENON , J
JANUARY 19, 2021
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