2020 (1) TMI 329 - HC - GST

Service of notice - Section 74 read with Section 122 (1) of the CGST/SGST Act - demand of a tax/penalty from estimated turnover for the assessment years 2017-2018 and 2018-2019 - HELD THAT - Although belatedly, the petitioners have approached the 1st respondent with applications for supply of copies of the documents seized from their premises, and relied upon while issuing Ext.P1 notice to them - Inasmuch as the adjudication proceedings pursuant to Ext.P1 notice have not commenced, and a denial of the request of the petitioners for copies of the documents seized from their premises would tantamount to a violation of the rules of natural justice, the Writ Petitions are disposed off with the direction that the petitioners approaching the 1st respondent within a period of two weeks from today, the 1st respondent shall furnish to them copies of the documents seized from their premises, and reliance on which is placed in Ext.P1 notice, within a week from the date of the petitioners approaching the 1st respondent. Petition disposed off.

Summary

Issues:
Petitioners served with notices under CGST/SGST Act for tax/penalty demand; denied copies of seized documents; seeking direction for copies and opportunity to submit objections before adjudication.

Analysis:

Issue 1: Denial of copies of seized documents
The petitioners, in this case, were served with notices under Section 74 read with Section 122 (1) of the CGST/SGST Act for tax/penalty demand based on estimated turnover for specific assessment years. They contended that they were not allowed to obtain copies of the documents seized from their premises or given a chance to comment on them before the authorities proceeded with adjudication. The primary prayer in the writ petition was for a directive to the 1st respondent to provide copies of the documents relied upon in the notices and to allow the petitioners an opportunity to present their objections regarding the reliance placed on those documents before the adjudication process.

Issue 2: Judicial Directions
After hearing arguments from both the petitioners' counsel and the Government Pleader representing the respondents, the court acknowledged that the petitioners had belatedly requested the 1st respondent for copies of the seized documents mentioned in the notices. The court found that denying the petitioners access to these documents would violate the principles of natural justice. Consequently, the court issued specific directions to address this issue. Firstly, the 1st respondent was instructed to provide the petitioners with copies of the seized documents within a week of the petitioners' formal request within two weeks. Secondly, the petitioners were granted three weeks from receiving the copies to submit their objections regarding the reliance on those documents mentioned in the notices. Thirdly, the 1st respondent was directed to adjudicate on the matter within a month after the petitioners' objections were received and heard. Lastly, the petitioners were required to present a copy of the writ petition and the court's judgment to the 1st respondent for further action.

This judgment highlights the importance of upholding the principles of natural justice and ensuring that individuals subject to legal proceedings have a fair opportunity to review and respond to the evidence against them before any adjudication takes place.