Case Law Details
Rimjhim Ispat Limited Vs State Of U.P. (Allahabad High Court)
Points that emerge for adjudication are whether the search and seizure under GST was carried out by observing the ‘substantive due process’ as well as the ‘procedural due process.’
As regards the substantive due process, which has to be followed before any search, can be carried out, is contained under sections 67(1) and 67(2) of the U.P. GST Act and prior to exercise of the said powers, it is essential that the officer authorizing the search should have ‘reasons to believe.’ The principles that are culled out from the catena of decisions referred above is that the ‘reasons to believe’ should exist and should be based on reasonable material and should not be fanciful or arbitrary. It is also established that this Court in exercise of its powers under Article 226 cannot go into the sufficiency of the reasons and should not sit as an appellate court over the reasons recorded. It is also well established that the reasons may or may not be communicated to the assessee but the same should exist on record.
Sri C.B. Tripathi, learned counsel for the respondent, during the course of arguments, had placed before us the part of the records wherein the officers concerned had recorded their ‘reasons to believe’ prior to authorizing the search, the ‘reasons to believe’ were based upon information received by the Department fortified by interception of the goods of the petitioner on 11.3.2018 wherein the e-way bill was found to be suspicious and it is based upon this perception a reason to believe was formed by the Department which led to the search on 13.3.2018.
The arguments raised by Sri Vinod Kumar Upadhya, Senior Counsel for the petitioner that the seizure of the truck on 11.3.2018 was set aside by this Court in Writ Tax No. 559 of 2018 vide its judgement and order dated 18.9.2018 is no doubt correct but however the judgement of this Court was given on 18.9.2018 and as on 13.3.2018, the Department had valid materials/reasons to authorize and to conduct search and seizure, the question regarding the sufficiency of material, as held by the Hon’ble Supreme Court cannot be gone into by this Court in exercise of its power under Article 226 and, thus, we are inclined to hold that the Department had ‘reasons to believe’ and, in pursuance of the said reasons, the search and seizure operations were carried as such the writ petition fails as regards in sufficiency of material for carrying out the search and seizure.
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