Whether presence of advocate required at time of search proceedings under GST – Yes OR No
Recently in the case of Subhash Joshi & Anr. vs. Director General of GST Intelligence (DGGI) & Ors. before Madhya Pradesh High Court, whereas the petitioner is the manufacturer of sweet betel nut and which has all the necessary licenses and permissions for this purpose and is regularly paying the GST. The petitioner is operating from the rental premises of Shri Kishore Wadhwani On 20th June, 2020, by the impugned notice the factory premises of the petitioner has been sealed. Petitioner apprehends that since the action was initiated against Shri Kishore Wadhwani for evasion of tax, therefore, the premises of the petitioner has been sealed. According to the petitioner, on 20th June, 2020 he was out of station, and, therefore, the petitioner had sent the notice dated 26/6/2020 for demand of justice and, thereafter the present petition has been filed.
The petitioner submits that though the action relating to search and seizure u/S.67 of the GST Act has been taken, but the requisite procedure has not been followed.. He has further submitted that as per the requirement of Sec.67, two independent reputed witnesses of the locality are necessary, but the respondents (department ) want to carry out the search by keeping their own pocket witnesses.
Further the respondents has submitted that since the premises was found locked, they sealed the premises and thereafter carry out the search of the premises in the presence of the petitioner.The petitioner requested presence of an Advocate during search and seizure. The respondent (department ) submits that there is no provision in law allowing the petitioner’s prayer for presence of an Advocate during search and seizure. He has also submitted that the two independent witnesses will be kept as required by law and procedure prescribed in law will be duly followed in true letter and spirit.
After hearing both the parties and according to Sec.67 of the GST Act reads as under: –
“67. Power of inspection, search and seizure.—In terms of sub-section 10 of Sec.67, the provisions of search and seizure as contained in Cr.P.C are applicable. Sub-section (4) of Sec. 100 Cr.P.C provides as under:-
“(4) Before making a search under this Chapter, the officer or other person about to make it shall call upon two or more independent and respectable inhabitants of the locality in which the place to be searched is situate or of any other locality if no such inhabitant of the said locality is available or is willing to be a witness to the search, to attend and witness the search and may issue an order in writing to them or any of them so to do.”
From the above sub-section presence of two or more independent and respectable inhabitants of the locality is necessary as witness to the search. Since the search is yet to take place in the present case and the counsel for respondents (department ) has duly assured this court that the aforesaid provision will be complied with therefore no direction in this regard at this stage is required.
Further the petitioner has failed to point out any statutory provision in support of presence of the advocate during the search .
The court has relied on the similar case of Supreme court where the Supreme Court in the matter of Poolpandi and Others v. Superintendent, Central Excise & Ors. [1992] 3 SCC 259 wherein during the investigation and interrogation under the provisions of Foreign Exchange Regulations Act 1973 and Customs Act, a prayer was made for assistance of the lawyer. And the Hon. Supreme Court denied such a prayer
The same issue came up before the Delhi High Court in reference to the GST Act in the matter of Sudhir Kumar Aggarwal v. Directorate General of GST Intelligence 2019 SCC OnLine Del 11101 and the Delhi High Court placing reliance upon the earlier judgments of the Supreme Court has decided the matter.
Provisions of section 67 do not require presence of an Advocate at time of search proceedings and, thus, assessee’s request for same could not be allowed
Conclusion : Section 67 of the Central Goods and Services Tax Act, 2017/ Section 67 of the Madhya Pradesh Goods and Services Tax Act, 2017 – Search, seizure, etc. – Power of inspection, search and seizure – Whether in view of provisions of subsection (10) of section 67, presence of two or more independent and respectable inhabitants of locality is necessary as witness to search – Held, yes – Whether, however, there is no provision indicating that said search proceedings have to be carried out in presence of an Advocate and, thus, assessee’s request for same could not be allowed – Held, yes
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