Bhima Enterprises Vs Joint Commissioner (Madras High Court)
The Madras High Court considered a writ petition concerning inspections conducted at the premises of a jewellery manufacturer and wholesaler registered on the GST portal. During a surprise inspection on 16.08.2023, jewellery and physical stock of gold bullion were seized. The petitioner explained the excess quantity identified by the department and alleged that it was compelled to pay tax of Rs.32,62,640/- on that date. A second inspection was conducted on 25.01.2024 pursuant to an authorization letter dated 24.01.2024. The petitioner’s statement was recorded and certain files and documents were taken. The petitioner challenged the authorization, contending that it breached the status quo order dated 23.11.2023 in W.P.(MD)Nos.27734 and 27735 of 2023. When the challenge was heard on 20.02.2024, the department submitted that the authorization letter had been withdrawn, and the writ petition was closed.
The Court discussed the principle concerning a dependent order and the effect of setting aside or withdrawal of the primary order. It also considered the respondents’ reliance on SNJ Breweries Private Limited Vs. Principal Director of Income Tax, 2024 SCC OnLine Mad 5606, regarding the admissibility of evidence obtained during an illegal search. However, the Court clarified that admissibility of evidence was not the issue before it. The question was whether the department could retain the files and documents taken on 25.01.2024.
