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IN THE HIGH COURT OF JUDICATURE AT MADRAS
ANITA SUMANTH, J.
Jayachandran Alloys (P) Ltd., Rep by its Managing Director, C Pradeep - Petitioner
Versus
Superintendent of GST & Central Excise, Head Quarters Preventive Unit, Salem - Respondent
Writ Petition No. 5501 of 2019, Writ Miscellaneous Petition No. 6251 of 2019
Decided On : 04-04-2019
GST - Power of inspection, search and seizure - Petitioner's request for copies of statements recorded from it as well other materials seized, with no response forthcoming from the department - Petitioner sought copies of the documents and records seized during the inspection as well as copies of statements recorded by the inspecting authorities, to grant opportunity to the petitioner and to pass an order of assessment in accordance with law - Held that the petitioner is entitled to a mandamus as prayed for in regard to supply of the documents and statements sought for by it in the light of the provisions of the Act.
Fact of the Case:
The petitioner is an Assessee before the respondent authorities, in terms of the provisions of the Central Goods and Services Tax Act, 2017, (in short 'CGST Act'). The CGST Act was implemented with effect from 01.07.2017 and provides for the assessment of turnover from sales and services as enumerated therein. Regular monthly returns have been filed by the petitioner and this is not disputed. While this was so, there appears to have been an investigation initiated by the respondents in the premises of the petitioner, commencing from 15.10.2018 and continuing on various dates thereafter. Seizures of voluminous documents and records have been effected. The petitioner has also been called upon to furnish various records and has done so, under letters dated 17.11.2018 and 22.11.2018.
Finding of the Court:
The petitioner is entitled to a mandamus as prayed for in regard to supply of the documents and statements sought for by it in the light of the provisions of the Act. The provisions of Section 67(5) of the CGST Act, extracted earlier, make it clear that the statute entitles the Department to refrain from handing over copies of documents seized where it believes that such furnishing may be prejudicial to its interest. However, there is no such averment in the counter in regard to the documents sought for by the petitioner. The main prayer of the petitioner is for furnishing of copies of documents and records seized from its premises on 15.10.2018, 16.10.2018 & 17.10.2018. Thus, if the Department was of the view that this prayer was not liable to be granted for reasons that the documents were sensitive or such production would prejudice its interests, it ought to have said so in counter. In the absence of any such averment I must only conclude that there is no such apprehension in the mind of the Department and the prayer of the petitioner is thus, liable to be accepted.
Issues: 1. Whether the petitioner is entitled to a mandamus as prayed for in regard to supply of the documents and statements sought for by it in the light of the provisions of the Act? 2. Whether the interim protection sought for to prevent the respondents from invoking the powers under Section 69 of the Act read with Section 132 thereof in respect of the petitioner is liable to be granted? 3. Whether the petitioner's request for a direction to the respondents to complete adjudication and make an assessment after following the due process of law is liable to be accepted?
Ratio Decidendi: The power of arrest under Section 91 of the Finance Act, 1994 ('the said Act') can be exercised without following the procedure as set out in Section 73A(3) and (4) of the said Act. The High Court has decided, after detailed discussion, that it is mandatory to follow the procedure contained in Section 73A(3) and (4) of the said Act before going ahead with the arrest of a person under Sections 90 and 91. We are in agreement with the aforesaid conclusion and see no reason to deviate from it.
Final Decision: Writ Petition is allowed. Connected WMP is closed, with no order as to costs.
(Prayer:- Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Mandamus directing the respondents to provide all the documents and records seized from the petitioner’s premises during the inspection conducted on 15.10.2018, 16.10.2018 and 17.11.2018 and including the statements recorded from the Petitioner’s staff and its Managing Director and also the statement recorded from the Managing Director of the Petitioner on 21.02.2019 and thereafter grant opportunity to the petitioner and pass assessment order in accordance with law.)
1. The petitioner is an Assessee before the respondent authorities, in terms of the provisions of the Central Goods and Services Tax Act, 2017, (in short 'CGST Act'). The CGST Act was implemented with effect from 01.07.2017 and provides for the assessment of turnover from sales and services as enumerated therein. Regular monthly returns have been filed by the petitioner and this is not disputed.
2. While this was so, there appears to have been an investigation initiated by the respondents in the premises of the petitioner, commencing from 15.10.2018 and continuing on various dates thereafter. Seizures of voluminous documents and records have been effected. The petitioner has also been called upon to furnish various records and has done so, under letters dated 17.11.2018 and 22.11.2018.
3. The list of documents submitted on 17.11.2018 is set out below:-
'JAYACHANDRAN ALLOYS PVT LTD
Following Original / Documents submitted to GST HPU Officers dt: 17/11/2018
S.No.
Name of the Register
Reports Date
From
To
1
Despatch Inspection Report
3/14/2018
4/21/2018
2
Lead Counting Note
9/25/2018
11/1/2018
3
Daily stock book
9/6/2018
11/17/2018
4
Vehicle Follow up chart
7/5/2018
9/20/2018
5
Daily stock book
5/30/2018
9/5/2018
6
Daily stock book
11/1/2017
2/18/2018
7
Despatch Inspection Report
5/31/2018
6/26/2018
8
Despatch Inspection Report
2/6/2018
3/13/2018
9
Battery Dimandle scrap Inward
2/11/2018
11/16/2018
10
Lead Outward Note
7/11/2018
11/17/2018
11
Lead Outward Note (security)
3/28/2018
11/17/2018
12
Lead Outward Note
11/1/2018
11/17/2018
13
JCA Ganeshapuram to JCG Perundhurai DC Material Register
10/12/2018
11/17/2018
14
Store Inward Note
7/1/2018
11/17/2018
15
Loading Log sheet
7/11/2017
8/21/2017
16
Daily stock book
4/25/2017
8/21/2017
17
Daily stock book
8/3/2017
7/9/2017
18
Lead Loading Log sheet
10/10/2017
12/26/2017
19
Lead Loading Log sheet
7/13/2018
9/5/2018
20
Export Inspection Report
3/23/2017
10/31/2017
21
Export Inspection Report
6/28/2018
11/11/2018
22
Vehicle Follow up chart
7/18/2017
5/2/2018
23
1 Box File
4. In letter dated 22.11.2018 addressed by the petitioner to the first respondent, acknowledged by the first respondent on the same date, the details of other documents and records supplied by the petitioner are mentioned, as follows:
'The total Nos. of documents submitted is 61 Nos. and the hard copy given to you is 56 Nos.
The total No. of pages given to you is 2935
The total No. of registers submitted is 34 Nos.'
5. Statements have been recorded from various persons including the Managing Director of the petitioner company on various dates in the course of proceedings as below:-
S.No.
Name of the Staff
Designation
Hearing Date
1
Mr.V.Saravanan
Billing Staff / Authorised Signatory
6.12.2018 & 7.12.2018
2
Mr.V.Vinothkumar
Stores Supervisor
6.12.2018 & 7.12.2018
3
Mr.D.Rathinamoorthi
Stores Supervisor
7.12.2018
4
Mr.S.Viveganandhan
Production Manager
17.12.2018
5
Mr.M.Mahendhiran
Despatch Supervisor
18.12.2018
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