The finance ministry on Monday moved the Supreme Court against a Delhi High Court ruling that had slammed it for arresting a senior official of online travel portal Makemytrip for alleged service tax evasion and also permitted the department to prosecute its own officers for “unwarranted arrest.”
A bench headed by chief Justice TS Thakur posted the matter for hearing on Tuesday after Attorney General Mukul Rohtagi sought urgent hearing, saying, “told there was no wrongdoing on the department’s part in arresting top brass and the actions taken were within the purview of the law.”
Early in 2016, the director general of Central Excise Intelligence (DGCEI) while addressing an investigation had arrested MK Pallai, vice president finance at Makemytrip and demanded an initial deposit for tax arrears allegedly amounting to over R70 crore.
The government has challenged the September 1 judgement of the HC that held that the DGCEI was not entitled to arrest any offender without first issuing the show cause notice, considering the explanation and passing the adjudication order. Holding “unwarranted” arrest without show cause notice for alleged service tax evasion as “unconstitutional,” the HC on September 1 had set aside arrest of a senior official of online travel company Makemytrip and directed the department to refund R70 crore deposited by it within four weeks.
Slamming the DGCEI for acting with undue haste and in a reckless manner for arrest of a senior official of Makemytrip , it said that the department didn’t follow the procedure laid down under the law.
