2024 (1) TMI 127 - HC - GST

Review petition - search and seizure - indulging in vexatious search in the premises of the petitioner-company - seeking to restrain the respondents from disposing of or tinkering with the documents taken away from the petitioner-company during search - HELD THAT - Recovery of certain materials during the course of search carried out in different premises, have also been taken into consideration. The material, prima facie, disclosing involvement of the present review petitioner has also been taken note of. All the materials which have been collected by the respondents during the course of search and other proceedings were noticed by the Court and only thereafter certain observations have been made. It is not a case where this Court has written any finding of guilt against the present review petitioner Natwar Lal Sharda. However, existence of material on record prima facie indicating involvement of the present review petitioner along with other Directors of the company and other persons have been considered while examining the allegations that the search carried out in the business premises of the company and its Director and family members was vexatious, malicious and without any material whatsoever. What weight is required to be given to those materials would be a matter to be considered in various proceedings drawn by the Department and in other criminal proceedings. This Court only examined the material on record to find out whether the search carried out in the premises of the company could be said to be vexatious. The writ petition has been dismissed.

Summary

Issues involved:
The judgment involves a review petition seeking to review an order passed in a civil writ petition, challenging a search conducted on the premises of a company, and questioning the involvement of an individual in alleged tax evasion.

Issue 1: Review of order dismissing writ petition challenging search and actions taken:
The petitioners filed review petitions seeking to review the order dismissing a writ petition challenging a search conducted on the premises of the petitioner-company. The petitioners prayed for recalling or modifying the order dated 12.02.2019, which dismissed the writ petition. The Division Bench concluded that the officials of the respondents acted bona fide during the search, based on the material collected.

Issue 2: Allegations of tax evasion and involvement of an individual:
A review petition was filed by an individual, claiming that findings were made against him in the writ petition challenging tax evasion, despite him not being a director of the company at the time of the search. The individual argued that the observations against him should be expunged as he had resigned from the directorship before the search was conducted. The individual was arrested but later granted bail in connection with the alleged tax evasion.

Issue 3: Arguments and submissions in the review petition:
The individual argued that the observations made against him were incorrect as he had resigned from the directorship before the search. He contended that he was not involved in the alleged tax evasion and that the observations could harm him in other proceedings. The respondents, on the other hand, argued that the observations were based on material on record indicating the involvement of the individual in the alleged tax evasion.

Issue 4: Consideration of material and conclusions in the judgment:
The Court considered various submissions and examined the material on record, including incriminating material collected by the Department. The Court noted the involvement of the individual in the company and the allegations of tax evasion against him. It was observed that the search conducted was not vexatious and that there was material indicating the involvement of the individual. The Court clarified that it did not make any finding of guilt but considered the material to assess the nature of the search.

Separate Judgment:
The judgment was delivered by the Division Bench of the High Court, consisting of the Acting Chief Justice and another Justice. The review petitions were dismissed as they failed to demonstrate any error apparent on the face of the record and were considered appeals in disguise.