New Delhi, (Asian independent) Amazon Wholesale (India) Private Limited, and Amazon Seller Services Private Limited have preferred a writ petition in Delhi High Court challenging the jurisdiction of Enforcement Directorate (ED) and its officers to investigate in matters that are “beyond the scope of power and remit of the ED” under the Foreign Exchange Management Act, 1999 (FEMA).
Amazon is challenging the ED investigation as it pertains to transactions that have no foreign exchange element, the ED is conducting a fishing and roving investigation and subjecting the petitioners to proceedings without any “legal basis/jurisdiction” and causing unnecessary harassment despite full co-operation by the petitioners.
The writ is to direct the respondents to forthwith withdraw and/or cancel the directive dated February 19, 2021 and all and any investigation/inquiry/summons or proceedings commenced by the ED.
Amazon has questioned the ED in a writ petition stating the ED does not possess the requisite jurisdiction, under Section 13 read with Section 37 of FEMA to investigate issues relating to people joining or leaving the legal team of Indian Amazon entities in India, payments made by an Indian resident entity in Indian rupees to Indian counsels law firms for services rendered in India and the same is not relevant to information relating to the Future Group transaction.
Amazon said the mandate to investigate given to ED under FEMA is exclusively established under Section 37 read with Section 13 of FEMA.
The ED is only empowered to investigate matters under FEMA, i.e. on the issues of foreign exchange. FEMA itself prescribes the mandate given to ED for investigation of contraventions under FEMA, Amazon said.
Similarly, the changes by way of people leaving the legal team of Indian Amazon entities has no relevance under FEMA. “The requirement to file details of legal fee over the last 10 years and details for employees leaving etc. is, thus, another evidence of a roving and fishing enquiry which ought not to be allowed by this Honourable Court,” Amazon said.
“In light of the above, the summons to the extent referred to above and the actions taken or proposed to be taken pursuant thereto are bad in law and will be based on an erroneous assumption of jurisdiction by ED,” Amazon said.
Amazon said it pertains to transactions that have no foreign exchange element.
