Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
2024 INSC 277
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. /2024
ARISING OUT OF SLP (C) NO. 666 /2021
THE STATE OF GUJARAT & ANR. …. APPELLANT(S)
VERSUS
PARESH NATHALAL CHAUHAN …RESPONDENT(S)
J U D G M E N T
PAMIDIGHANTAM SRI NARASIMHA, J.
1. Leave granted.
2. We are called upon to expunge a portion from the interim order of
the High Court and dispose of the appeal as it is represented to us that
the respondent is not interested in initiating proceedings against the
officers in the present matter. We have accepted the request and hereby
dispose of the appeal.
3. The portion sought to be expunged is the observation of the High
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Court that the good faith clause in Section 157 of the GST Act , may
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“ 157. Protection of action taken under this Act.— (1) No suit, prosecution or other legal
Signature Not Verified
proceedings shall lie against the President, State President, Members, officers or other
employees of the Appellate Tribunal or any other person authorised by the said Appellate
Tribunal for anything which is in good faith done or intended to be done under this Act or
the rules made thereunder.
(2) No suit, prosecution or other legal proceedings shall lie against any officer appointed
or authorised under this Act for anything which is done or intended to be done in good
faith under this Act or the rules made thereunder. ”
Digitally signed by
RAVI ARORA
Date: 2024.04.06
11:05:22 IST
Reason:
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not be available to the officers of the State as their conduct, according
to the High Court, “may not” justify protection. We have expunged that
portion of the order because the context as well as the conclusions of
the High Court are wrong. We will explain this after indicating the
relevant facts.
4. This civil appeal arises out of an interim order passed by the High
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Court of Gujarat in a writ petition filed by the respondent seeking a
direction for protection from arrest under section 69 read with section
132 of the GST Act. The High Court is still examining the writ petition,
but by the interim order impugned herein, it criticised the prolonged
stay of the search party at the residence of the respondents as
unauthorized and illegal. We need not deal with the merits of the issue
as the matter is still pending before the High Court, more so when the
respondent has submitted that he is not interested in proceeding
against the officers and seeks a quietus to the issue.
5. In fact, while issuing notice in the appeal on 16.07.2021, this
Court passed the following order. The order is indicative of the limited
scrutiny sought to be made by this Court and it is evident from the
following:
“ Without in any manner condoning the conduct of the officers which
has been commented upon, what persuades us to issue notice is the
fact that there are observations to the effect that the statutory
protection available to the officers would not be a defence in case
proceedings were to be initiated against those officers by the original
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In Special Civil Application No. 18463 of 2019, order dated 24.12.2019.
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petitioners or their family members and such an observation has been
made in the absence of the officers.
Issue notice limited to the aforesaid aspect returnable in six weeks. ”
6. The relevant portion in the order of the High Court that the
statutory protection should not be made available to the officers is in
paragraph 28 and it is relevant for us to extract the same.
“ 28. Lastly the court may sound a word of caution to the authorities
exercising powers under the GST Acts. Sub-section (2) of section 157
of the GST Acts says that no suit, prosecution or other legal
proceedings shall lie against any officer appointed or authorized under
the Act for anything which is done or intended to be done in good faith
under the Act or the rules made thereunder. An action like the present
one which is not contemplated under any statutory provision and
which infringes the fundamental rights’ of citizens under article 21 of
the Constitution of India may not be protected under this section. An
action taken may be said to be in good faith if the officer is otherwise
so empowered and he exceeds the scope of his authority. However, in
a case like the present one where the authorization was for search
and seizure of goods liable to confiscation, documents, books or things
and the concerned officer converted it into a search for a person and
in investigation, which is not otherwise backed by any statutory
provision, it may be difficult to accept that such action was in good
faith. Protection of such action under section 157 of the GST Acts may
unleash a regime of terror insofar as the taxable persons are
concerned. ”
7. In the above-referred paragraph, the High Court was of the view
that the protection contemplated under section 157 of the GST Act,
which is in the nature of a good faith clause, “may not” be available to
the officers. This is the issue with which we are concerned, and we will
dwell upon it.
8. A good faith clause, explained in the vocabulary of the rights and
duties regime , can be said to be a provision of immunity to a statutory
functionary. Such provisions are in recognition of public interest in
protecting a statutory functionary against prosecution or legal
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proceedings. This immunity is limited. It is confined to acts done
honestly and in furtherance of achieving the statutory purpose and
objective. Section 3(22) of the General Clauses Act, 1897 best explains
‘good faith’ as an act done honestly, whether it is done negligently or
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not . Good faith clauses in statutes providing immunity against suits,
prosecution or other legal proceedings against officials exercising
statutory power are therefore limited by their very nature, that far , and
no further . The scope and ambit of good faith has been explained in a
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number of decisions of this Court, which need not be elaborated herein
again.
9. A good faith clause in a statute will therefore be a defense. If
successfully pleaded, it not only legitimises the action but also protects
the statutory functionary from any legal action. If a statutory
functionary invokes the defence of good faith in a suit, prosecution or
other legal proceedings initiated against him, it is for the court or a
judicial body to consider, adjudicate, and determine whether the claim
that the action was done in good faith is made out or not. Such a
scrutiny, enquiry, or examination is done only in a proceeding against
the statutory functionary. This Court has held that the scrutiny
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Section 3(22) of the General Clauses Act, 1897 defines ‘good faith’ as follows:
“ 3. Definitions .—In this Act, and in all Central Acts and Regulations made after the
commencement of this Act, unless there is anything repugnant in the subject or context,—
(22) a thing shall be deemed to be done in “good faith” where it is in fact done honestly,
whether it is done negligently or not;”
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See Goondla Venkateswarlu v. State of AP , (2008) 9 SCC 613, paras 22 and 23; Army
Headquarters v. CBI (2012) 6 SCC 228, paras 69-78.
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whether the act is done in good faith or not would depend upon the
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facts and circumstances of each case.
10. It is in the above referred context that we have examined the
observations made by the High Court in Paragraph 28 extracted
hereinabove. The High Court was not conducting a suit, prosecution,
or other legal proceeding against a statutory functionary. We have no
doubt that the High Court was conscious of the principles governing
good faith clauses and therefore couched its displeasure and distress
by stating that such officials “may not” be protected or that it “may be
difficult” to accept the contention of good faith. We are of the opinion
that these observations are in the nature of advance rulings. This is
because even before the initiation of a suit, prosecution or legal
proceeding, the High Court expressed a tentative opinion. If such
observations remain, they will affect the integrity and independence of
that adjudication, compromising the prosecution and the defence
equally.
11. We say no more than reiterate that a citizen of this country has a
right of accountability, for which he is entitled to initiate and adopt
such legal remedies as are available to him, and in such proceedings
the statutory functionary is equally entitled to take a defense of good
faith. It is for the court to adjudicate and decide.
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See, for example, Army Headquarters (supra), paras 76-78.
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12. In view of the above, we expunge paragraph 28 and dispose of the
appeal.
……..………………………………. J.
[Pamidighantam Sri Narasimha]
……….…………………………. J.
[Aravind Kumar]
New Delhi;
March 12, 2024
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