Missing Seized Documents Cannot Be Used in GST Proceedings: Telangana HC

Bengal Cold Rollers Private Limited Vs Assistant Commissioner (ST) (Telangana High Court)

In a significant ruling, the Telangana High Court held that documents seized by the GST Department but later found missing cannot be relied upon for adjudication. The case arose from GST proceedings where certain crucial records seized during a search were reported as untraceable, impacting the taxpayer’s ability to defend itself.

During the hearing, the Department admitted that several original files were not available and agreed to proceed only with the documents already on record. This admission became central to the Court’s decision.

Key Observations:

• The responsibility to safeguard seized documents lies entirely with the Department
• Missing or untraceable records cannot be used to determine tax liability
• Denial of access to such documents violates principles of natural justice

Court Directions:

• Unavailable seized documents must be excluded from consideration
• Adjudication can continue only on the basis of existing records
• The taxpayer must be given a fair opportunity to respond and be heard

Legal Impact: This ruling strengthens taxpayer protection in GST matters by ensuring that assessments are based only on verifiable evidence. It also reinforces accountability on tax authorities to properly maintain seized records.

Takeaway: If the Department fails to produce seized documents, no adverse inference can be drawn against the taxpayer—fair procedure and evidence transparency are mandatory.

FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT

Learned counsel Sri Pramod Singh appears for the petitioner.

Sri Swaroop Oorilla, learned Special Government Pleader for State Tax, appears for respondents No.1, 2 and 4 to 6.

2. Reference is made to the order dated 12.12.2025 passed in W.P.No.35740 of 2025 in the case of the same petitioner. Paragraphs 3 to 5 thereof are extracted hereunder for appreciating the controversy in the present writ petition preferred by the same petitioner in respect of the adjudication proceedings under show cause notices for the years 2019-20, 2020-21, 2021-22, 2022-23 and 2023-24 (up to December 2023):

“3. On an earlier date, when the matter was taken up, learned Special Government Pleader for State Tax was allowed time to obtain instructions on the question of scanned copies of certain documents, which were seized during investigation and which form part of inventory or Panchnama apart from other files, which have already been handed over. The Panchnama, on which both the parties rely, is at page Nos.115 and 116 of the Writ Petition. Relevant portion of the Panchnama is extracted hereunder:

4. Let it be indicated that the petitioner has received copies of the box files from Serial Nos.1 to 24 earlier as per its own case also. Its grievance was in relation to the office files from Serial Nos.1 to 11 except Serial Nos.2, 8 and 9. Petitioner also sought copies of the documents enumerated at internal page No.3 of page No.116 of the Writ Petition, which is extracted hereinabove.

5. Yesterday, when the matter was taken up, learned Special Government Pleader for State Tax submitted that the State Tax Department is ready with the photocopies and pen drive containing digital copies of the documents enumerated at page 115 of the Writ Petition under Office Files Serial Nos.1 to 11 leaving aside Serial Nos.2, 8 and 9, which the petitioner has already got, and 6 documents enumerated at page No.116 of the Writ Petition. He sought time to bring them on record with copies thereof through affidavit. It was also submitted that since the last date of passing of the order in respect of assessment year 2018-19 is 31.12.2025, the petitioner, having filed its reply in respect of the show cause notice for the said assessment year, may be directed to submit a supplementary reply-affidavit within a timeframe upon perusal of documents being supplied to it so that the State Tax Department is able to pass orders within the statutory period of limitation.”

3.The present writ petition raises a grievance that the respondents have failed to furnish the seized documents of the missing files to enable the petitioner to submit a detailed and effective reply for proper and unbiased adjudication after fair opportunity of hearing to the petitioner. In order to support the contention, learned counsel for the petitioner has relied upon paragraph 14 of the counter affidavit filed by the respondents in W.P.No.39343 of 2025 which related to claim of certain files in respect of adjudication proceedings for tax period 2018-19. The fact of the matter is that the documents seized by the respondents cover the tax periods from 2018-19 to 2023-24. The proceedings for the assessment year 2018-19 have concluded by passing an order in original dated 30.12.2025 and that is not the subject matter of challenge in the writ petition preferred by the petitioner. The counter affidavit filed in W.P.No.39343 of 2025 by respondent No.1 therein has, at paragraph 14, in so many words stated that the documents at serial Nos.1 to 6 of internal page 3 of the panchanama dated 26.12.2025 were missing, though the scanned copies of the same were available with the department and have been handed over to the petitioner while disposing of W.P.No.35740 of 2025.

4. The grievance of the petitioner is that in the absence of those missing files, the respondents cannot rely upon them in the adjudication proceedings for the assessment years 2019-20 to 2023-24, which is the subject matter of the present writ petition. Learned counsel for the petitioner submits that the missing files are relevant for a proper adjudication of the charges raised in the assessment proceedings for the aforesaid years.

5. Learned Special Government Pleader for State Tax states on instructions that those missing files, originals of which are not available with the department, will not be relied upon in the adjudication proceedings for the relevant years, whereas they would be relying upon the remaining file Nos.1 to 24, which were handed over to the petitioner before W.P.No.35740 of 2025 was disposed of on 12.12.2025.

6. In view of the statement made on instructions by the learned Special Government Pleader for State Tax, we are of the view that the grievance of the petitioner relating to adjudication proceedings relying upon certain seized documents, originals of which are missing with the department, has been duly addressed. The adjudication proceedings can go on on the basis of other available materials with the department, of course with due opportunity to the petitioner to furnish its reply and compliance of the opportunity of hearing in terms of the relevant provisions of the Telangana Goods and Services Tax Act, 2017.

7. The writ petition is accordingly disposed of. There shall be no order as to costs.

Miscellaneous applications pending, if any, shall stand closed.