THE STATE OF GUJARAT & ANR. versus PARESH NATHALAL CHAUHAN

Citation: [2024] 3 S.C.R. 1141 · Decided: 12-03-2024 · Supreme Court of India · Bench: PAMIDIGHANTAM SRI NARASIMHA · Disposal: Disposed off

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Judgment (excerpt)

* Author
[2024] 3 S.C.R. 1141 : 2024 INSC 277
The State of Gujarat & Anr. 
v. 
Paresh Nathalal Chauhan
(Civil Appeal No 4618 of 2024)
12 March 2024
[Pamidighantam Sri Narasimha* and Aravind Kumar, JJ.]
Issue for Consideration
Matter pertains to expunction of the observation by the High Court 
in an interim order that statutory protection contemplated u/s. 157 
of the GST Act, in the nature of a good faith clause, not available 
to the officers of the State conducting search as their conduct, 
“may not” justify protection.
Headnotes
Central Goods and Services Tax Act, 2017 – s. 157 – Protection 
of action taken under this Act – Interim order by the High 
Court, criticising the prolonged stay of the search party at 
the residence of the respondents as unauthorized and illegal 
– Observation by the High Court that statutory protection 
contemplated u/s. 157, in the nature of a good faith clause, may 
not be available to the officers of the State conducting search 
as their conduct, “may not” justify protection – Challenged to:
Held: Statutory functionary is equally entitled to take a defense of 
good faith – It is for the court to adjudicate and decide – High Court 
was not conducting a suit, prosecution, or other legal proceeding 
against a statutory functionary – High Court was conscious of 
the principles governing good faith clauses and thus, 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 – Observations were in the nature of advance rulings, 
because even before the initiation of a suit, prosecution or legal 
proceeding, the High Court expressed a tentative opinion – If 
such observations remain, they would affect the integrity and 
independence of that adjudication, compromising the prosecution 
and the defence equally – Observation of the High Court is 
expunged since the context as well as the conclusions of the High 
Court were wrong. [Paras 9-12]
1142
[2024] 3 S.C.R.
Digital Supreme Court Reports
Words and phrases – Good faith – Scope and ambit of:
Held: Good faith clauses in statutes, 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 suits, prosecution or legal proceedings against officials 
exercising statutory power– This immunity is limited – It is confined 
to acts done honestly and in furtherance of achieving the statutory 
purpose and objective – s. 3(22) explains ‘good faith’ as an act 
done honestly, whether it is done negligently or not – Good faith 
clause in a statute will be a defense – If successfully pleaded, 
it not only legitimises the action but also protects the statutory 
functionary from any legal action – If statutory functionary invokes 
the defence of good faith, it is for the court or a judicial body to 
adjudicate and determine whether the action was done in good 
faith or not – Such scrutiny or examination is done only in a 
proceeding against the statutory functionary, which would depend 
upon the facts and circumstances of each case – General Clauses 
Act,1897 – s. 3(22) – Central Goods and Services Tax Act, 2017 
– s. 157. [Paras 8, 9]
Case Law Cited
Goondla Venkateswarlu v. State of AP [2008] 12 SCR 
608 : (2008) 9 SCC 613; Army Headquarters v. CBI 
[2012] 5 SCR 599 : (2012) 6 SCC 228 – referred to.
List of Acts
Central Goods and Services Tax Act, 2017; General Clauses Act, 
1897.
List of Keywords
Expunction; Expunction of the observation by the High Court; 
Interim order; Statutory protection; Good faith clause; Statutory 
functionary; Tentative opinion; Rights and duties regime; Immunity 
to a statutory functionary; Defence of good faith.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No.4618 of 2024
From the Judgment and Order dated 24.12.2019 of the High Court 
of Gujarat at Ahmedabad in SCA No. 18463 of 2019
[2024] 3 S.C.R. 
1143
The State of Gujarat & Anr. v. Paresh Nathalal Chauhan
Appearances for Parties
Ms. Deepanwita Priyanka, Adv. for the Appellants.
Rahul Narayan, Ms. Harshita Malik, Advs. for the Respondent.
Judgment / Order of the Supreme Court
Judgment
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 respo

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