High Ground Enterprises LTD. vs. Union Of INDIA Through Secretary And Anr.

Held

The Court held that the Petitioner is entitled to copies of the documents seized. The Court reasoned that Section 67(5) of the CGST Act mandates that seized documents be retained only as long as necessary for examination and inquiry, and if originals cannot be returned, copies must be provided. The Court found the Respondents' reasons for refusal insufficient. The noting by the Proper Officer, stating that giving copies would "prevent investigation," was merely a reproduction of the section's language without specific justification. Furthermore, this note was created after the writ petition was filed, suggesting it was prepared retrospectively. The Court also noted the Respondents' affidavit omitted the fact that the Petitioner later cooperated with summons. The Court concluded that the refusal to provide copies was not justifiable, especially considering the time elapsed since the seizure (January 2019) and the demonstrated prejudice to the Petitioner's statutory compliance obligations. The legislative intent is to prevent needless harassment of businesses. Therefore, the Court directed the Respondent authorities to furnish copies of the seized documents within two weeks.

Facts

High Ground Enterprises Ltd. (Petitioner), a listed company, filed a writ petition challenging the refusal by the Director-General of GST Intelligence (DGGI) officers to provide copies of documents seized during a search on January 9-10, 2019. The DGGI initiated an inquiry based on intelligence regarding fraudulent input tax credit utilization. The Petitioner requested copies of seized documents on February 2, 2019, to comply with SEBI regulations for submitting financial results to the Bombay Stock Exchange and National Stock Exchange, facing penalties for non-compliance. The DGGI refused, citing potential prejudice to the ongoing investigation, arguing that handing over documents could lead to manipulation, alerting associates, or stalling progress. The Petitioner clarified they sought copies, not originals, to meet statutory obligations.

Key Issues

1. Whether the Petitioner is entitled to copies of documents seized by the Respondent authorities under Section 67(5) of the Central Goods and Services Tax Act, 2017, despite the Respondent's contention that it would prejudicially affect the investigation? Petitioner's Arguments: The Petitioner argued that Section 67(5) of the CGST Act creates a right to receive copies of seized documents, and withholding them causes grave prejudice, particularly in meeting statutory filing deadlines with stock exchanges. They contended that the refusal was unreasonable and that providing copies would suffice for their compliance needs without harming the investigation. Respondents' Arguments: The Respondents contended that handing over documents at this sensitive stage of the investigation would prejudice the inquiry. They argued that the Petitioner might manipulate or fabricate documents, alert associates, and stall the investigation. They also suggested that the Petitioner's Chartered Accountant could inspect the records instead of receiving copies and claimed that soft copies were already available with the Petitioner.