Case Law Details
Aimlay Private Limited Vs Commissioner of Central Tax (Delhi West) & Ors (Delhi High Court)
Department shall provide the copies of documents data derived from seized items during GST search and seizure proceedings and eized Documents Must Be Returned in 30 Days: Delhi HC
The Hon’ble Delhi High Court in the case of Aimay (P) Ltd. v. Commissioner of Central Tax, Delhi West [W.P. (C) No. 6836 of 2024 dated July 25, 2024] directed the Department to comply with the provisions of Section 67 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) by ensuring that the copies of the documents and data seized be provided to the Petitioner, and the documents, records, laptops, CPUS and Mobile Phones are seized only till the time they are required but the time period in any case shall not exceed the time period later than 30 days after issuance of notice.
Facts:
Aimay (P.) Ltd. (“the Petitioner”) filed a writ petition against orders dated April 16, 2024 and November 20, 2023 (“the Impugned Orders”) wherein the bank accounts of the Petitioner and its Director were attached. Further, it was prayed that, the Petitioner assets seized during search and seizure operations be released.
Issue:
Held:
The Hon’ble Delhi High Court in the case of W.P. (C) No. 6836 of 2024 held as under:
- Noted that, as per Section 67(3) of the CGST Act, all documents, books or things seized under Section 67 (2) of CGST Act, are required to be returned to the person from whom the same are seized within the period not exceeding 30 days from the date of issuance of the notice.
- Noted that, as per Section 67(5) of the CGST Act, the Petitioner is entitled to make copies of any documents seized during the course of investigation.
- Opined that, the Department may retain the documents, records, laptops, CPUS and Mobile Phones only till the time they are required but in any case shall not exceed the time period later than 30 days after issuance of notice.
- Directed that, the Department shall ensure that the copies of documents and data on devices available in the mobile phones, CPUs, laptops and other records, which were seized are made available to the petitioners.
Relevant Provisions:
Section 67 of the CGST Act
Section 67: Power of inspection, search and seizure.
(1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that––
(a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or
(b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act,
he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place.
(2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things:
Provided that where it is not practicable to seize any such goods, the proper officer, or any officer authorised by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer:
Provided further that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act.
(3) The documents, books or things referred to in sub-section (2) or any other documents, books or things produced by a taxable person or any other person, which have not been relied upon for the issue of notice under this Act or the rules made thereunder, shall be returned to such person within a period not exceeding thirty days of the issue of the said notice.
(4) The officer authorised under sub-section (2) shall have the power to seal or break open the door of any premises or to break open any almirah, electronic devices, box, receptacle in which any goods, accounts, registers or documents of the person are suspected to be concealed, where access to such premises, almirah, electronic devices, box or receptacle is denied.
(5) The person from whose custody any documents are seized under sub-section (2) shall be entitled to make copies thereof or take extracts therefrom in the presence of an authorised officer at such place and time as such officer may indicate in this behalf except where making such copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect the investigation.
(6) The goods so seized under sub-section (2) shall be released, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be.
(7) Where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized:
Provided that the period of six months may, on sufficient cause being shown, be extended by the proper officer for a further period not exceeding six months.
(8) The Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification, specify the goods or class of goods which shall, as soon as may be after its seizure under sub-section (2), be disposed of by the proper officer in such manner as may be prescribed
(9) Where any goods, being goods specified under sub-section (8), have been seized by a proper officer, or any officer authorised by him under sub-section (2), he shall prepare an inventory of such goods in such manner as may be prescribed.
(10) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure, shall, so far as may be, apply to search and seizure under this section subject to the modification that sub-section (5) of section 165 of the said Code shall have effect as if for the word “Magistrate”, wherever it occurs, the word “Commissioner” were substituted.
(11) Where the proper officer has reasons to believe that any person has evaded or is attempting to evade the payment of any tax, he may, for reasons to be recorded in writing, seize the accounts, registers or documents of such person produced before him and shall grant a receipt for the same, and shall retain the same for so long as may be necessary in connection with any proceedings under this Act or the rules made thereunder for prosecution.
(12) The Commissioner or an officer authorised by him may cause purchase of any goods or services or both by any person authorised by him from the business premises of any taxable person, to check the issue of tax invoices or bills of supply by such taxable person, and on return of goods so purchased by such officer, such taxable person or any person in charge of the business premises shall refund the amount so paid towards the goods after cancelling any tax invoice or bill of supply issued earlier.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This is an application filed by the petitioners seeking early hearing of the present petition.
2. For the reasons stated in the application, the same is
3. The petition is taken up for
4. The petitioners have filed the present petition, inter alia, praying as under:
“(a) to issue a writ of certiorari or any other appropriate writ, order or directions, quashing the order dated 16.04.2024 passed by the learned Commissioner of Central Tax, Delhi West [Respondent No.1] and consequently quashing of order dated 20.11.2023 passed by the learned Commissioner, Central Tax, Delhi West whereby he provisionally attached the current Bank Account No. 082805001395 of the petitioner no. 1 and Bank Account No. 082805002086 of the petitioner no. 2 and other bank accounts having same PAN maintained at ICICI Bank Ltd, Rohini, Sector-24, New Delhi [IFSC Code ICIC0000828];
(b) to issue a writ of mandamus or any other appropriate writ; order or directions to the respondents to return the assets including laptops, CPUs, Mobile Phones which were seized as per seizure memos dated 16.11.2023 at the officer and residential premises of the petitioners;
(c) pass any other or further order/orders which Your Lordships may deem fit and proper in the interest of justice.”
5. It is apparent from the above that the reliefs claimed by the petitioner in the present petition are three-fold. First, the petitioners challenge the orders dated 16.04.2024 and 20.11.2023 (hereafter the impugned orders), passed by the Commissioner, Central Tax, Delhi West [Respondent No.1 (hereafter the Commissioner)], provisionally attaching the bank accounts of petitioner no.1 and it’s Directors’. Second, the petitioners prays that directions be issued to the Commissioner for returning the petitioners’ assets, including laptops, CPUs, Mobile Phones etc., which were seized during the search and seizure operations conducted on 16.11.2023.
6. In so far as the petitioners’ challenge to the impugned orders freezing the bank account is concerned, this Court had by an order dated 20.03.2024 permitted the petitioners to make an application to the Commissioner to permit limited operations of their bank accounts to enable petitioner no.1 company to continue as a going concern. The representative of the petitioners was directed to appear before the concerned officer on 02.04.2024 at 02:30 PM for the said purpose.
7. In compliance with the said directions, the petitioners had appeared before the Commissioner and advanced submissions. Thereafter, the Commissioner passed a speaking order dated 16.04.2024 setting out in detail, its reasons for not acceding to the petitioners’ prayer and justifying the impugned orders for freezing the bank accounts in question.
8. In view of the above, learned senior counsel for the petitioners does not, at this stage, press any relief regarding the freezing of the bank
9. The second relief sought by the petitioners is regarding return of the laptops, CPUs, Mobile Phones and other documents, which were seized during the search and seizure operations.
10. Concededly, the petitioners are entitled to make copies under Section 67(5) of the Central Goods and Services Tax Act, 2017 (hereafter the CGST Act) and extracts of any documents seized under Section 67(2) of CGST
11. In terms of Section 67(3) of CGST Act, all documents, books or things seized under Section 67 (2) of CGST Act, are required to be returned to the person from whom the same are seized within the period not exceeding 30 days from the date of issuance of the notice.
12. The Commissioner had considered the said provisions and permitted the petitioners to obtain copies of the documents and data on the seized assets/devices on a mutually convenient date.
13. In these circumstances, the Commissioner may retain the documents, records, laptops, CPUS and Mobile Phones which were seized but only till the time, the same are required and in any event not later than 30 days after issuance of notice, as required under Section 67(3) of the CGST Act, 2017.
14. In the meanwhile, the Commissioner shall ensure that copies of the documents and data on devices available in the mobile phones, CPUs, laptops and other records, which were seized are made available to the
15. It is submitted on behalf of the petitioners that although the petitioners have provided a hard disk of 01 Terabyte, the respondents are compelling the petitioners to give further hard disks.
16. We request the Commissioner to examine this aspect and ensure that the copy of the data is not withheld from the petitioners.
17. Mr. Ojha, learned counsel appearing for the respondents, contests the said prayer. However, it is seen that the counter-affidavit filed by the respondents is not on record. The respondents shall ensure that the same is placed on record before the next date of hearing.
18. List for hearing on the aforesaid aspect on 20.08.2024, the date already fixed.
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