Delhi HC Directs GST Officers to Return or Share Data from Seized Phones & Laptops

Balaji Enterprises Vs Principal Commissioner (Delhi High Court)

The Delhi High Court, in Balaji Enterprises Vs Principal Commissioner, ruled that an assessee is entitled to receive copies of seized electronic devices and documents under the GST Act. This entitlement can only be denied if the proper officer records an opinion that providing such copies would prejudicially affect the ongoing investigation. The petitioner, M/s Balaji Enterprises, sought the return of electronic devices (including an iPhone, a Samsung Galaxy Z-Fold, pen drives, and a laptop) and various physical records seized from its premises on July 1, 2025, during an inspection.

The Statutory Provision and Entitlement

The court’s decision hinged on the interpretation of Section 67(5) of the Central Goods and Services Tax Act, 2017 (CGST Act). This section governs the rights of a person from whom documents or records are seized.

Section 67(5) states:

“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…”

The petitioner’s counsel argued that since the GST Department had already downloaded and cloned the data from the seized electronic devices (as noted in the panchnama), the devices should either be returned or, alternatively, complete copies of the seized data and documents should be provided.

Court’s Holding and Directions

The Delhi High Court affirmed the statutory right of the assessee to receive copies of the seized material. It clarified that while the right to copy is subject to the presence of an Authorised Officer, the denial of this right must be substantiated.

The court observed that the panchnama indicated that the GST Department had already retrieved and downloaded the data from the electronic devices into hard drives, suggesting that the cloning and data extraction were substantially complete.

To balance the rights of the assessee with the needs of the investigation, the court issued the following directions:

1. Grant of Copies: The proprietor of the Petitioner firm, Mr. Sandeep Singhal, was directed to appear in person before the GST Department. In the presence of an Authorised Officer, copies of the entire set of seized documents and data shall be provided to him.

2. Cooperation: The Petitioner was obligated to cooperate fully with the investigation.

This ruling underscores the legal principle that investigative agencies cannot retain seized data indefinitely or deny the assessee access to their own records, particularly when the seizure’s purpose—data extraction—has been largely accomplished, unless a formal, reasoned decision is made that providing the copies would genuinely prejudice the ongoing probe. The judgment ensures that the assessee has the necessary material to prepare their defense and effectively respond to the investigation.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. This hearing has been done through hybrid mode.

CM APPL. 62448/2025

2. Allowed, subject to all just exceptions. Application is disposed of.

W. P.(C) 15237/2025

3. The present petition has been filed by the Petitioner – M/s Balaji Enterprises, through its proprietor Mr. Sandeep Singhal, under Article 226 of the Constitution of India, inter alia, seeking return of the electronic devices, documents, records, books, etc., seized from the Petitioner vide seizure dated 1st July, 2025.

4. The copy of the panchnama dated 1st July, 2025 drawn at the office premises of Mr. Sandeep Singhal, at PD-99A, Ground Floor, Pitampura, Delhi-110034 (hereinafter, ‘panchnama’), would show that the seized goods are as follows: “

”

5. Ms. Chaudhary, ld. Counsel for the Petitioner submits that since the GST Department has already made copies of all the records, including the electronic gadgets, the devices should be returned. Alternatively, in the event the devices are not returned, copies of the data contained therein, along with the other documents, should be provided to the Petitioner.

6. It is further submitted by ld. Counsel that the Petitioner’s interest cannot be detrimentally affected by not even providing the copies of the data contained in seized documents and the electronic gadgets.

7. Mr. Harpreet Singh, ld. SSC for the Respondent submits that the Petitioner is not cooperating in the investigation and ought to appear for recording of his statement, as the GST Department wishes to confront him in respect of documents which have been seized.

8. The Court has considered the matter. Section 67 of the Central Goods and Services Tax Act, 2017 (hereinafter, ‘CGST Act’) vests the power of inspection, search, seizure and arrest with the GST Department.

9. Section 67(3), 67(4) and 67(5) of the CGST Act reads as under:

“Section 67. Power of inspection, search and seizure.

(3) The documents, books or things referred to in sub­section (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 subsection (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…”

10. In terms of Section 67(3) of the CGST Act, the documents or other gadgets etc., produced by a taxable person, if not relied upon by the GST Department, are to be returned within a period of 30 days.

11. Additionally, Section 67(5) of the CGST Act clearly provides that in respect of documents that are seized, the person from whom the seizure is made shall be entitled to make copies thereof, in the presence of an Authorised Officer.

12. At this stage, it is submitted on behalf of the GST Department that Section 67(5) of the CGST Act has a caveat that such entitlement shall not extend to circumstances where providing copies would be prejudicial to the investigation.

13. A perusal of Section 67(5) of the CGST Act clearly shows that copies of the seized data cannot be denied to the Petitioner. However, such copies can be made in the presence of an Authorised Officer, unless it is recorded in writing, that providing copies would be prejudicial to the investigation.

14. The panchnama in this case records as under:

“The afore-detailed 11 electronic devices were put up before us which were found to be packed in envelopes, which were opened before us in the presence of advocate Sh. Kushagra Verma and Sh. Santosh Kumar. Forensic Expert from M/s Omnicomp, New Delhi, hired by the DGGI officials. Thereafter, the devices were opened and the contained data in the above listed devices was retrieved and downloaded from the aforesaid devices in Hard Drives with master Copy S.No. WX42AC4RTNPK and Working Copy S.No.-WX42AC4RTER9, which was found to be concerned for the ongoing investigation. The printout of cloning & data extraction report for the devices was taken out and each page was duly signed by Sh. Santosh Kumar, Forensic Expert, advocate Sh. Kushagra Verma and we had signed on each page of the report along with the master Copy which was sealed in front of us.”

15. Thus, it is evident from the foregoing that the GST Department has downloaded the data and cloning has also been completed, although some part of it may still be outstanding.

16. Be that as it may, in order to resolve this issue, it is directed that Mr. Sandeep Singhal, the proprietor of the Petitioner, shall appear in person before the GST Department and in the presence of an Authorised Officer, copies of the entire set of documents and data shall be provided to him.

17. Needless to add, the Petitioner would be duty bound to cooperate in the investigation.

18. Accordingly, the present petition is disposed of in the above terms. All pending applications, if any, are also disposed of.