Mumbai: Bombay high court (HC) has issued contempt notices to two state tax officials who allegedly unlawfully arrested a businessman in a Rs 9.5 cr GST fraud case. The state tax authorities arrested the businessman on Dec 20 despite issuing him summons a day earlier, asking him to be present on Dec 30 to record his statement.
The businessman, Mishal Shah, was released on bail by the lower court, where he was produced after his arrest. The lower court stated: “Under the facts and circumstances of the case, in my view the arrest is hasty and illegal and so arrest is illegal”, following the high court’s ruling. Shah, represented by advocate Prasannan Namboodiri, told HC that his arrest was to intimidate and penalise him for approaching the court.
Justices M S Sonak and Jitendra Jain issued show cause notices to assistant commissioner of Sales Tax, Chandar Kamble and joint commissioner Prerna Deshbhratar’s authorisation. Kamble told HC that he carried out the arrest on the authorisation of Deshbhratar. HC has sought their response by Jan 15, 2025.
The HC order reads, “At least prima facie, we think that this amounts to interference with the administration of justice and consequently, might amount to a contempt of court. Yesterday(Dec 19) the matter was argued. Chandar Kamble was present in court at the time of arguments. Based on his understanding of the proceedings, it is possible that this action was taken.”
Citing the HC observation on Friday, advocate Sujay Kantawala represented Shah before lower court informed about the HC order. The lower court released Shah on bail the same day.
The GST fraud case pertained to suspicious transactions from 2018-19, where it was alleged that Shah wrongfully claimed input tax credit of Rs 9.5 crore using invoices from Manidhari Trading Co, Karnataka, which allegedly issued bills without actual supply of goods and services. Authorities claimed the company was a non-existent entity that fraudulently obtained registration to evade taxes.
Officials noted dubious documentation of 199 truck deliveries in 2018-19.State tax officials recorded Shah’s statement on Nov 28, and froze his bank account, and were to question him and his wife. Shah challenged the account freezing, in HC. On Dec 19, Kamble attended the HC hearing that was adjourned for a day. That evening, he issued summons to Shah for Dec 30. However, Kamble arrested him on Dec 20 at 7.55 am, before the scheduled HC hearing, prompting HC to issue the contempt notices.
