The GST officers have ordered a search of the petitioner’s manufacturing unit. The petitioner has challenged the impugned order. He further requested the presence of his lawyer, fearing coercion by the officials. The name of the case is, Subhash Joshi & another v. Director General of GST Intelligence & Others. WP no. 9184/2020; Madhya Pradesh High Court.
Brief Facts of the Case
The petitioner owns a sweet betel nut manufacturing unit in Indore. The premises belong to another, Mr. Kishore Wadhwani. The petitioner has no relation with the latter (lesser) apart from the lease contract.
On 20.06.2020, the GST authority issued a search notice on all properties of Mr. Wadhwani. The notice was on the ground of tax evasion. The petitioner was out of the station, and hence, the officials sealed the unit. The Central Goods and Services Tax Act, 2017 authorizes these acts.
The petitioner apprehends violation of requisite procedure under Section 67 of the GST Act. He seeks directions from the Court under Article 226 of the Constitution. He has requested the presence of his lawyers at the time of the search.
Submissions before the Court
The petitioner’s counsel has submitted the credentials of his client. The petitioner is a regular tax-paying citizen and has not evaded ever since. The Excise department had taken action against the petitioner in 2011. Yet, they did not discover any incriminating evidence.
Furthermore, the counsel challenged the non-compliance of the procedure laid under the GST Act. According to Section 67 of the GST Act, at least two reputed witnesses from the locality must be present during the search and seizure. The petitioner alleges that the respondents want to keep their own ‘pocket witnesses’.
Moreover, the petitioner alleges that the officials may carry out an unfair process. He also claimed that they might indulge in forceful confession. This further may lead to compromised law. And may also violate the fundamental rights enshrined in the constitution. Hence, the petitioner seeks the presence of an advocate to ensure the lawful execution of the order.
The respondents’ counsel has submitted the creditability of the executives. On 20.06.2020, the officials, following due procedure of law, sealed the premises. The officials informed the petitioner of the same. In the instance, the counsel assured the appointment of two independent witnesses. This will assure the spirit of the law.
The Court placed reliance on Poolpandi and others v. Superintendent, Central Excise, and others. The matter was under the Foreign Exchange Regulation Act, 1973, and the Customs Act. The Supreme Court had to decide if the suspect could fetch a lawyer’s help at the time of interrogation.
The apex court had asserted- “The purpose of the inquiry under the Customs Act and the other similar statutes will be completely frustrated if the whims of the persons in possession of useful information for the departments are allowed to prevail.”
The company of lawyers may encourage adoption of non- cooperative attitude towards the machinery of law. Thus, such a disassociation must not violate any legal right guaranteed by the constitution.
The Court also viewed the recent judgment by Delhi High Court. In Sudhir Kumar Aggarwal v. Directorate General of GST Intelligence, the parallel Court asserted- “ So far as apprehension of the petitioner that he may be physically assaulted or manhandled is concerned, it is a well-settled law now that no inquiry/investigating officer has a right to use any method which is not approved by law to extract information from a witness/suspect during the examination.”
Moreover, the Court has observed a discrepancy in the petitioner’s submission. The counsel failed to cite any statutory provision or legal right to support the argument.
The Court has considered the assurance of the respondents. The prospective search should be in accordance with the law. It has been well established that no violation of law shall have statutory immunity. The official will have to face consequences of their unlawful actions if any.
Justice Prakash Shrivastava and Justice Vandana Kesarkar have pronounced the order. In the light of submissions and observations, the Court has ordered no interference. The Court has relied on the assurance by the respondents. The search shall take place according to the due process of law. Hence, the direction is not required at this stage in the present matter.
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