2021 (2) TMI 143 - HC - GST

Release of documents as mentioned in Form GST INS- 02 dated 06.02.2020 (Annexure-C), after retaining photocopies of the same within a time frame to be fixed by the Hon'ble Court - alternatively seeking to provide photocopies of all the documents as mentioned in Form GST INS-02 dated 05.02.2020 (Annexure-C) within a time frame to be fixed by this Hon'ble Court - HELD THAT - Once the show-cause notice is issued to the party concerned, the documents/records, which have not been relied upon, should be returned to the party. This is what even is suggested in the master circular dated 19.01.2017 which has been referred to in the representation - In the master circular, in clear terns, it has been stated that a show-cause notice and the documents relied upon in the show- cause notice, should be served on the assessee for initiation of the adjudication proceedings. However, the documents/records which are not relied upon in the show-cause notice, are required to be returned under proper receipt to the person from whom those are seized. This writ application is disposed off with a direction to the respondent No.2 to immediately look into the representation at Page-114, Annexure-P to this writ application and take an appropriate decision in accordance with law within a period of one week from the date of the communication of this order.

Summary

Issues:
1. Delay in returning seized documents to the writ applicants.
2. Failure to provide photocopies of the seized documents.
3. Request for mandamus to direct the Respondent No.3 to release the documents.
4. Non-response to requests for document return.
5. Allegation of documents not considered in the show-cause notice.
6. Legal obligation to return documents not relied upon in the show-cause notice.
7. Disposal of the writ application with a direction to respond within a week.
8. Requirement for cogent reasons if documents cannot be returned.

Analysis:
The writ applicants, a Company and one of its Directors, engaged in the business of dyes and chemicals, filed a writ application seeking the release of seized documents and photocopies thereof. The search and seizure by the DGGST officials at the firm's principal place of business and branch resulted in the seizure of various documents, including stock registers, invoices, and accounts. Despite more than ten months passing, the documents were not returned, nor were photocopies provided. A show-cause notice was issued under Section 67, and requests for document return went unanswered.

The counsel for the writ applicants argued that the demanded documents were essential for their business operations, audits, and tax filings. They contended that these documents were not considered in the show-cause notice, raising concerns about the fairness of the proceedings. Referring to past court orders and CBIC circulars, the court directed the Respondent No.3 to review the representation requesting document copies and make a lawful decision.

Highlighting the principle that documents not relied upon in a show-cause notice should be returned to the concerned party, the court emphasized the necessity of following the master circular's guidelines. Accordingly, the court disposed of the writ application, instructing Respondent No.3 to make a decision within one week based on the representation provided. The court urged for a resolution in compliance with the law to avoid further legal proceedings.

In case the Respondent No.3 determines that the demanded documents cannot be returned, they were mandated to provide valid reasons in writing to the writ applicants for appropriate legal action. The court permitted direct service of the order, ensuring prompt communication and compliance with the directives issued.

This judgment underscores the importance of procedural fairness in document seizure cases, emphasizing the obligation to return documents not utilized in legal proceedings and the necessity for timely and lawful decision-making by the concerned authorities.