A division bench of Gujarat High Court has directed the word of caution to authorities exercising powers under GST (Goods and Service Tax) Acts.
A search of the residential premises of the petitioner pursuant to an authorization issued under Section 67(2) of the Gujarat GST Acts, 2017 was conducted. The fact that the search stretched on for a period of 8 days (from 11.10.2019 to 18.10.2019) coupled with the fact that the search party was present with the petitioner for the aforementioned period in his residential premises is what has brought the case before the present Court.
To further state, the family members of the petitioner were confined to the searched premises and were kept under surveillance and were not permitted to leave the premises without the permission of the authorized officer. It has also been established that out of the 8 days, the search was concluded on the first day itself.
The petitioner based his argument on the right to privacy to contend that prolonged stay at the premises of the petitioner was an invasion of the right of the residents of such premises including the freedom of the taxpayer. Further, such a power must be exercised strictly in accordance with the law and only for the purposes for which the law authorizes it to be exercised. It has been submitted that contrary to the Income Tax Act which allows search of a person by an authorized person where he has a reason to suspect that such person has secreted about any books of accounts, etc., no such provision is present under the GST law. Further that under Section 67 of the GST Acts, the family members of the dealer whose premises are searched cannot be touched, his phone cannot be taken or used, neither can his statements be recorded since this is not an inquiry or investigation, but a search.
In an interim order, the Gujarat High Court has ordered an inquiry against Goods and Services Tax ( GST ) Department Officials illegally staying at the house of a taxable person without the authority of law.
The Bench constituting of Justices H. Devani and S.K. Vishen held that the provisions of the GST acts nowhere arm the officer, in whose favour the authorization is issued, to search for any person or to remain in the premises after the search is over.
According to the report submitted by learned Government Counsel, the carry out the search at the residential premises of the petitioner had stayed there from 11.10.2019 to 18.10.2019. A perusal of the record of the proceedings of the case reveals that on 11.10.2019 at 2:15, it has been recorded that after searching of the rooms in the premises, the records of the accounts were brought to the main room and gathered there which included the bank passbooks of the family members as well as chequebooks and that verification thereof is continuing.
The proceedings thereafter do not reveal any further search carried out at the premises but reveal that the officers had stayed at the premises and had examined the phone calls that were received by the family members and had recorded their phone calls. They had also recorded statements of the family members of the petitioner on 11.10.2019. The record further reveals that the officers who had arrived on the previous day, as well as the panchas, were relieved by a new set of officers and panchas and this cycle continued till 18.10.2019. It appears that thereafter they have been questioning the family members of the petitioner on a day to day basis till 18.10.2019.
The Bench observed that by doing so, the family members of the petitioner have been deprived of their personal liberty not only by being confined in the residential premises and being permitted to leave only with the consent of the authorized officer, and that too, at times with an escort; but also by an intrusion on their right to privacy by several strangers residing in their residential premises for eight days, that too, without any authority of law.
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