The withdrawal of an authorization letter for search and seizure by the authorities removes the legal basis for retaining any documents seized during that operation, requiring their immediate return to the owner.

Prayer:

Writ Petition filed under Article 226 of Constitution of India, to issue a Writ of Mandamus, directing the respondents to return all the files and documents to the petitioner taken on 25.01.2024 from the petitioner pursuant to the Authorization for Inspection issued by the first respondent in Form GST INS-01, dated 24.01.2024.

ORDER

The writ petitioner is engaged in jewellery business. They are a manufacturer as well as wholesaler. They had registered themselves on the GST portal. While so, on 16.08.2023, a surprise inspection was conducted on the petitioner's business premises. Jewellery and physical stock of gold bullion were seized. The petitioner explained as to why the quantity treated as excess by the department was not included in the book of accounts. The petitioner alleges that they were compelled to pay tax amount of Rs.32,62,640/- on 16.08.2023.

2.Yet another inspection of the petitioner's premises was held on 25.01.2024 on the basis of another authorization letter dated 24.01.2024. During the said inspection, the petitioner's statement was obtained. On the said date, certain files and documents were also taken from the petitioner. Contending that the issuance of the authorization letter dated 24.01.2024 was in breach of the status quo order dated 23.11.2023 made in W.P.(MD)Nos.27734 and 27735 of 2023, the petitioner filed W.P. (MD)No.3770 of 2024. When the said writ petition was taken up for hearing on 20.02.2024, the learned standing counsel for the department submitted that the authorization letter dated 24.01.2024 stood withdrawn. Recording the said submission, the writ petition was closed.

3.There is a category known as “dependent order”. If the primary order based on which the dependent order is made itself is set aside, the dependent order is rendered nugatory (vide AIR 1988 SC 897 (G.Ramegowda, Major, etc Vs. Special Land Acquisition Officer, Bangalore). This proposition of law was explained in Ajay Bensal Vs. Anup Metha (2007) 2 SCC 275 and Rikhabsao Nathusao Jain Vs. Corporation of the City, Nagpur (2009) 1 SCC 240). The gloss subsequently put on the original proposition was that not in all cases, the dependent order can be treated as void. It may have to be formally set aside. The doctrine must be applied having regard to the factual matrix obtaining in each case.

4.Relying on the decision of the Hon'ble Division Bench reported in 2024 SCC OnLine Mad 5606 (SNJ Breweries Private Limited Vs. Principal Director of Income Tax), the respondents argued that even if the search is held to be illegal, the evidence gathered in such a search can still be used and is admissible. A famous political leader was portrayed as a right person in a wrong party. When during a press conference at Chennai, this was put to him, he wittily responded that if the fruit is good, the tree must be okay. Law, however, adopts a more nuanced position. In Poorna Mal V. Director of Inspection of Income Tax (Investigation), New Delhi reported in (1974) 1 SCC 345, it was held that unless there is an express or necessary implied prohibition in the Constitution or other law, evidence obtained as a result of illegal search or seizure is not liable to be shut out. Instance of such prohibition can be found in Sections 24 to 26 of the Evidence Act, 1872. In Selvi Vs. State of Karnataka reported in 2010 7 SCC 263, it was observed that the doctrine of “exc