Delhi High Court takes serious note on Coercion and threats by Tax Officials -Case of Digipro Import and Export Pvt. Ltd vs. UOI

Know in detail about the Delhi High Court Case: Digipro Import & Export Pvt. Ltd vs. UOI. Critical obloquies passed to convict the unlawful practice of the Department of receiving dateless cheques from the taxpayers during the visit/ inspection without even measuring the degree of responsibility evasion. The effort of the corrupt officers is to ‘negotiate’ the evaded service by coercion and threats. It is not the conduct of law but turmoil unleashed by possessors of the public department. It is an impairment of constitution that has to be halted. 

The Detail of Delhi High Court Case: Digipro Import & Export Pvt. Ltd vs. UOI

Five dateless cheques were presented in court worth the total amount of Rs 1.25 crores that were gathered from the Petitioner at the time of visit to his premises on March 10, 2017. The court asked Mr. Harpreet Singh, learned counsel appearing for the Respondents, mainly to present any provision under the CE Act (Central Excise Act 1944) or the directive made thereunder. Court also asked for any other notification or order, or circular that authorized the officers of the Dept to accumulate the “undated cheques” that may account for his responsibility to collect these dateless cheques during the survey, or visit or search. And Mr. Harpreet failed to produce or even mention any such document. Also, it was also shown in the affidavit that because the Petitioner indicated its issue in giving the remittance of the complete duty liability, on his insistence, the officer gave his consent to take the cheque without a date.

Court took strong notice of unlawful practice by Tax Officials to harass tax payers

This unlawful practice fostered by the Anti-Evasion Department of Central Excise needs an extensive investigation. The Court has all grounds to conclude that this has appeared to surface only because the Petitioner has appealed to the Court. This exercise is possibly being embraced in numerous situations that have not yet come to the attention of the Court. And in case, it continued, there could cause some severe implications.

Before anything else, it must be understood that the officers of the Anti Evasion Wing of the Central Excise Department have to operate within the limits of the law. Along with the CE Act, these officers are obliged by the rules and regulations legislated thereunder.

This is unquestionably unjust to the Assessee and is dangerous to public concern. It is not directive of legislation but lawlessness unleashed by possessors of the government department. These are not admissible in the system administered by the rule of law. It is the mutation into a system of rule by law, in fact, an insult of law. It must be ended.

High Court asks Commissioner of Excise to stop this illegal practice by his officials and submit the details in person to Court

The court said it would find a logical conclusion for this incident. The Cheques are instructed to be kept with the Registrar General of the Court in a sealed envelope. The Court also asked Commissioner of Central Excise, Delhi-II to file an affidavit explaining what actions he suggests to stop this illegal practice immediately and asked him to submit it in person. He is also directed to start an inquiry to find out which officers are involved in this unlawful practice. 

The court also instructed to send the copy of this order to the CVC (Central vigilance Commissioner) to check the severity of the problem. They will also receive a copy of the judgment of the court in Capri Bathaid Private Limited vs. Commissioner of Trade & Taxes Case.

The CVC perhaps was familiar with this practice being executed in a few Government Departments that have been assigned the responsibility of collecting the taxes and other duties and are conferred with inspection and seizure powers. These officers resort to the unlawful practice of collecting undated cheques and cash as well from the taxpayers and institutions who may have evaded the duties and tax payments.

This causes harm not only to Government but also innocent people who are being harassed by these officers to a great extent. It is a serious problem regarding the transparency and accountability of employees working in Government offices. Hence, it is critical for CVC now to provide clear instructions.