The Gujarat High Court directed the GST authorities to release the seized documents, if can not be returned then assign cogent reasons.
The writ applicant M/s Universal Dyechem Pvt. Ltd. is a Company engaged in the business of manufacturing and trading of dyes and chemicals. The principal place of business of the firm is at Jodhpur (Rajasthan).
The firm also has a branch at Surat. The respondent authority and other officers of the DGGST conducted search and seizure at the principal place of business at Jodhpur on 14th February, 2020.
An order of seizure of certain documents came to be passed in Form GST INS-02. The search proceedings were also initiated at Surat Branch of the firm on 6th February, 2020. The Directors of the firm were also issued summons under Section 70 of the Act for the purpose of their interrogation.
Mr. Gatani, the counsel for writ applicants submitted that in the course of the seizure proceedings, various documents like stock register, sale and purchase invoices, bills, books of accounts, ledger accounts etc. were seized.
Mr. Gatani added that it has been more than ten months that such documents are not being returned. Neither photocopies of the same are being provided to the writ applicants. It appears that a show-cause notice has also been issued pursuant to the search proceedings under Section 67.
The division bench of Justices J.B.Pardiwala and Ilesh Vora held that once the show-cause notice is issued to the party concerned, the documents/records, which have not been relied upon, should be returned to the party. This is what even is suggested in the master circular dated January 19, 2017.
In the master circular, in clear terns, it has been stated that a show-cause notice and the documents relied upon in the show- cause notice, should be served on the assessee for initiation of the adjudication proceedings. However, the documents/records which are not relied upon in the show-cause notice, are required to be returned under proper receipt to the person from whom those are seized.
Therefore, the court directed the respondent authority to immediately look into the representation to this writ application and take an appropriate decision in accordance with law within a period of one week from the date of the communication of this order.
The court said that in the event if the Respondent is of the view that such documents, as demanded by the writ applicants, cannot be returned, then he shall assign cogent reasons for such decision and communicate the same in writing to the writ applicants so that they can take necessary recourse available to them in law.
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