BOMBAY HIGH COURT
WRIT PETITION NO. 8631 OF 2023
Chotu Lal …..Appellant
V/s
Union of India and Ors. …..Respondent
Honble Justice
K.R. Shriram and Jitendra Jain, JJ.
Date : 26/08/2024
Appearance:
Mr. Brijesh Pathak for the Petitioner.
Mr. Jitendra B. Mishra a/w. Ms. Sangeeta Yadav, Mr. Rupesh Dubey and Mr. Ashutosh Mishra for the Respondent.
Issues Involved :-
JUDGMENT
1. On 26th September 2023 the following order came to be passed :
Mr. Mishra, learned Counsel for the Respondents, has a serious objection to the Petitioner invoking the jurisdiction of this Court under Article 226 of the Constitution of India and seeking discretionary reliefs in relation to the attachment notice as issued under Section 83 of the CGST Act. Mr. Mishra submits that the Petitioner is a bogus person and a substantial amount of about Rs. 21 crores was deposited in his account which is attached by the Respondent. The Petitioner is stated to be a labourer and without having any source of business has invoked the jurisdiction of this Court under Article 226 of the Constitution of India for the relief as prayed for. It is his submission that the Petitioner has not approached this Court with clean hands and with appropriate disclosures. If that be the case, this Court would not entertain any frivolous and bogus pleas. The Respondent Revenue would be required to be granted an opportunity to place on record reply so that further appropriate orders can be passed after hearing the parties.
2. Let reply affidavit be filed within one week from today. Copy of the same be furnished to the Advocate for the Petitioner well in advance.
3. Stand over to 3rd October, 2023.
2 In the affidavit in reply filed through one Shrivastav Singh affirmed on 29th September 2023 on behalf of respondent nos. 1 and 2, paragraphs 12, 14 to 20 read as under :
12. A letter dated 10.01.2023 was received from Shri Chotu Lal inter-alia stating that he was carrying on business of trading of crypto-currencies which was done digitally and there was no restriction over the same; that the trading in crypto-currency did not fall within the purview of GST in any manner. Hereto annexed and marked as Ex “E” is the copy of letter dated 10.01.2023. The answering Respondent vide letter 20.01.2023 informed the Petitioner that the Principal Commissioner, CGST Delhi North-110002 has fixed a personal hearing on 30.01.2023 at 11.45 AM in respect of representation filed by him under Rule 159 (5) of the CGST Rules, 2017 against DRC-22 issued in respect of bank account No.098663300002462 with Yes Bank. Hereto annexed and marked as a Ex “F” is the copy of letter dated 20.01.2023.
14. In his representation filed under Rule 159 (5) of the CGST Rules, 2017 before the competent authority, the petitioner stated that he was carrying on business of trading of crypto currencies. Therefore, summon dated 18.01.2023 was issued to the Petitioner to appear in this office on 30.01.2023 alongwith documents in support of business activities resulting in the transactions [Credit of Rs.46.96 Crore and Debit entries of Rs.45.69 Crore within a span of 16 days from 05.01.2022 to 21.01.2022] in current bank account No.098663300002462 maintained with Yes Bank; Income Tax Returns filed by the Petitioner. However, Petitioner neither appeared against Summons nor appeared for Personal Hearing. He also did not submit any documents, Income Tax Returns etc. This office in absence of any communication from Petitioner`s end informed him vide this office letter dated 03.02.2023 that neither he appeared for personal hearing on the scheduled date nor any communication was received from his side, and in such circumstances, no further action could be taken on his representation. Hereto annexed and marked as an Ex “G” is the copy of summons 18.01.2023.
15. Another Writ Petition No.5796 of 2023 was filed by the petitioner before this Honble Court wherein he stated that he has waived of his right for personal hearing. The Writ was disposed by this Honble Court vide its Order dated 02.05.2023 directing the Respondents to decide the objection (s) filed by the petitioner within two weeks, without granting personal hearing, on merits. Hereto annexed and marked as an Ex “H” is the copy of Order dated 02.05.2023.
16. In compliance of this Honble Court`s Order dated 02.05.2023, the objections stated to be filed by Shri Chotu Lal, Proprietor of M/s Wisemax Enterprises has been decided by the competent authority on 16.05.2023. The decision of the competent authority vide this office letter dated 16.05.2023 was sent to the CGST Thane officers for delivery to Shri Chotu Lal, M/s Wisemax Enterprises, SH- 42/UB, Sai Krupa Mall, Opp. Raliway Station, LT Road, Dahisar West, Mumbai. However, no such firm or/and person was found to be operating from the above said address. The proceedings were recorded under Panchnama dated 01.06.2023. Further, upon telephonic verification the shop owner confirmed that the said shop was vacant since Sh. Veerpal Singh Banjara vacated the shop in around August, 2022. Hereto annexed and marked as an Ex “I” is the copy of Panchnama dated 01.06.2023.
17. I say that the Petitioner had not joined the investigation with the Department. A team of officers from CGST Delhi North was deputed to visit the residential premises of Shri Chotu Lal in Chhatarpura, Baran, Rajasthan alongwith team of local CGST officers of CGST Kota. A team of CGST officers of CGST Kota and CGST Delhi North visited the residential premises of Shri Chotu Lal at village Chhatarpura, Baran, Rajasthan on 29.05.2023. The Proceeding of visit were recorded under Panchnama dated 29.05.2023. Hereto annexed and marked as an Ex “J” is the copy of Panchnama dated 29.05.2023.
18. The Statement of Shri Chotu Lal under Section 70 of the CGST Act, 2017 was recorded on 29.05.2023 at his residence. Shri Chotu Lal in his statement dated 29.05.2023 inter-alia stated that his family is indulged in agriculture; that he is educated upto 10h standard; that he is unaware about any firm being run in his name in Mumbai; that he alongwith his cousin Shri Dileep Singh visited Mumbai in the year 2021; that he got opened a bank account in his name and for that he was given Rs. 10000/- in cash and after that he came back to his village Chhatarpura, Rajasthan; that he never undertook any work in the company Wisemax Enterprises; that he was shown the bank statement of M/s Wisemax Enterprises and he signed every page of the statement; that he is not much educated therefore he is unaware that as to who have made transaction of crores of rupees in bank account and why such transaction have been made in account opened by him; that Shri Dileep Singh Mob. 9179834985, resident of Barsati, District Guna, Madhya Pradesh could tell anything in this relation; that he truly stated that though in papers he is shown as Proprietor of M/s Wisemax Enterprises he has no relation with the said company and inward outward transactions of about Rs. 46.00 crores are not his; that on being asked about one person Veerpal Singh Banjara he stated that he only knew him to be from the village of Shri Dileep Singh and is his friend; that he does not know any one by the name of Shri Arpit Jain; that he truly states that he does not know how to operate computer; that he does not know what is cryptocurrency; that he has never sold or purchased anything like that; that he truly states that he never filed any court case in any Court in relation to Wisemax in Mumbai or any other place; that he admits his mistake that in greed of Rs. 10000/- only he opened a bank account in Mumbai and handed over to Shri Dileep Singh; that whatever money has come into the said account is not his; that he received many letters which were shown to Shri Dileep Singh who advised him to remain silent and stay at home.
19. These Respondents have sent copy of letter dated 10.01.2023 vide which objection under Rule 159 (5) had been filed, Account Opening Form of Bank Account and copy of Verification Form (found in the Writ Petition No.5796 of 2023) all bearing signatures of Shri Chotu Lal and Statement dated 29.05.2023 of Shri Chotu Lal for forensic examination with regard to matching of signature(s) on the said documents. Forensic Expert in its Examination Report(s) dated 22.06.2023 furnished report to the effect that the signatures on Statement dated 29.05.2023 and Bank Account Opening Form were of the same person. Whereas the signature (s) on letter dated 10.01.2023 vide which objection under Rule 159 (5) were filed and Verification Form (part of Writ Petition No.5796 of 2023/Page No.43 of the said Writ) were not matching with the signatures of Shri Chotu Lal. Hereto annexed and marked as an Ex “K” is the copy of letter dated 10.01.2023.
20. The Statement dated 29.05.2023 of Shri Chotu Lal and Forensic Examination Report(s) dated 22.06.2023 strengthens the suspicion that M/s Wisemax Enterprises is a dummy/shell company and its bank account is a benami account, not being run/operated/controlled by the purported Proprietor (Shri Chotu Lal) in whose name firm and bank account has been opened. Even the repeated Writ(s) are being filed before the Honble Bombay High Court to deliberately put obstacles in the ongoing investigations and to mask the actual beneficiaries of the account without proving the bonafide of business transactions before the investigating agency, business transactions which have resulted into credit of Rs.46.96 Crore and debit entries of Rs.45.69 Crore within a span of 16 days from 05.01.2022 to 21.01.2022. Hereto annexed and marked as an Ex “L” is the copy of Forensic Examination Report(s) dated 22.06.2023 and 23.06.2023.
(emphasis supplied)
3. There is no denial in the rejoinder except in paragraph 5 where it is stated as under :
5. At para 20, reference has been made to the statement recorded on 29.05.2023, in this regard, I submit that the officers of the GST appeared at my premises and made oral inquiries with me, in relation to my proprietary concern and also the transaction made therein. I informed the officers that the entries in the account were in relation to trading of crypto currencies and that the same was not taxable. The officers harassed me and abused me during the course of the interrogation and that my signatures were obtained on a prepared statement without explaining me the contents of the same. I signed the statement only because the officers threatened that upon my failure to sign the same, they would cause arrest. To buy peace, I unwillingly signed the statement prepared by them. I say that the contents of the statement are either known to me nor I agree to the contents of the same, upon reading the allegation and averments made in the Affidavit in Reply.
4. In fact in the petition at paragraph 3 it is stated that petitioner had made a representation dated 17th January 2023 objecting to the provisional attachment of petitioner’s Bank account with Yes Bank Limited being Account No.098663300002462 (the said Account) and respondent no.2 has failed to consider the same. In the affidavit in reply, it is stated that petitioner had filed a representation dated 10th January 2023 under Section 159 (5) of the CGST Rules, 2017 and notice of personal hearing to petitioner was also issued in respect of representation filed by petitioner under Section 159 (5) of the CGST Rules, 2017. It is also stated that petitioner was also issued summons dated 18th January 2023 to appear on 30th January 2023 alongwith documents in support of business activities resulting in the transactions in the said Account but petitioner neither appeared against summons nor appeared for personal hearing or submitted any documents or income tax returns. Therefore, another letter dated 3rd February 2023 was issued to petitioner recording his non appearance for personal hearing and in view of his non appearance or any communication from his side, no further action would be taken on his representation. Copy of the communication is also annexed to the affidavit in reply. Still there is not even a denial by petitioner to any of these allegations. That would only lead to a conclusion that petitioner has suppressed these facts in the petition filed.
Moreover, in the affidavit in rejoinder, petitioner has stated that some officers of GST appeared on 29th May 2023 and after making oral inquiries harassed and abused him and his signatures were obtained on a prepared statement without explaining the contents of the same. It is stated that petitioner has signed only because he was threatened that he would be arrested if he failed to sign. Even these facts have been suppressed in the petition. If what petitioner states was true, he would have infact recorded the events soon after 29th May 2023 or atleast would have stated so in the petition which has been affirmed on 9th June 2023.
5. Further, we may note that in the cause title of the petition, petitioner is stated to be 22 years old and the petition was filed on 9th June 2023. Petitioner has signed in Hindi and there is no endorsement of anyone having read or translated the contents. We are satisfied that petitioner does not understand English and we say this because in the verification clause, petitioner states his age is 24 years and Mr. Pathak has signed.
Further, in the verification clause, it says “solemnly declared at Mumbai”, whereas the notary public is from Palghar.
In the verification clause and in the cause title, the address given is SH-42/UB, Sai Krupa Mall, Opp. Railway Station, L.T. Road, Dahisar (W), Mumbai – 400 068. We have to note here that in the affidavit in reply, at paragraph 16, it is stated that on 1st June 2023 when the CGST officers from Thane went to serve the decision dated 16th May 2023 of the Competent Authority for delivery to petitioner, M/s. Wisemax Enterprises at the address given in the cause title, i.e., SH-42/UB, Sai Krupa Mall, Opp. Railway Station, L.T. Road, Dahisar (W), Mumbai – 400 068, no such firm or/and person was found to be operating from the said address and this has been recorded under Panchnama dated 1st June 2023. We should also note that in the affidavit in reply it is stated that upon telephonic verification the shop owner confirmed that the said shop was vacant since Sh. Veerpal Singh Banjara vacated the shop in around August 2022. This averment in the affidavit in reply has not been denied in rejoinder.
In the petition, petitioner’s signature at the bottom of the petition and in the verification clause is in Devanagari script but in page 335 of the affidavit in rejoinder, which has been affirmed before the Section Officer, High Court, Bombay, petitioner, i.e., Chotu Lal, has signed in English. Mr. Pathak has no explanation for this even though Mr. Pathak has identified Chotu Lal and has also signed both petition as well as affidavit in rejoinder. For ease of reference, the portion of verification clause, where petitioner has signed in Devanagari script and page 335 of the affidavit in rejoinder, where petitioner has signed in English, are scanned and reproduced hereinbelow :
6. In rejoinder, petitioner has stated that his permanent address is at Rajasthan and at the time of filing rejoinder he is at Mumbai whereas in paragraph 1 of the petition he has stated that he is carrying on business at the address mentioned in cause title which is at Dahisar, Mumbai. This contradiction coupled with what is stated by respondents in their reply on petitioner being non-genuine goes on to indicate that petitioner is playing fraud not only on the Revenue but also on this Court and, therefore, we are not inclined to exercise our discretionary jurisdiction in the present matter.
7. In the circumstances, in our view, this is not a case where we should exercise our jurisdiction under Article 226 of the Constitution of India.
8. Petition dismissed.
9. The whole thing appears to be a fraud and the Authorities are directed to seriously investigate everybody involved in filing of this petition as well as Writ Petition No. 5318 of 2022, Writ Petition No.11252 of 2022 and Writ Petition No.5796 of 2023 to arrive at the truth behind the whole fraud and take necessary legal action against all involved including for aiding and abetting forgery, fraud etc.
10. Petitioner shall also pay a sum of Rs.5 lakhs as costs to respondent no.2 by way of cheque drawn in favour of advocate for respondent no.2 and this amount shall be paid within 30 days from today.