2022 (4) TMI 1293 - HC - GST

GST Authorities Must Provide Adequate Reasons When Rejecting Requests for Investigation Statements Under CGST/SGST Act

K.E. Agro Products (P) Ltd. Lillykutty Mathew, Thomas Mathew Versus The State Tax Officer (IB) -I SGST Department, Thiruvananthapuram, The Deputy Commissioner (IB), The Commissioner Of State Tax

The HC disposed of writ appeals challenging rejection orders for copies of statements recorded during GST investigations. The court found the rejection ... Seeking grant of copy of statements recorded by the respondents in the course of investigation - reason for not giving the copies of the statements not produced - non collection of tax for outward supply of rice - violation of principles of natural justice - HELD THAT:- A perusal of Ext.P10 would show that the officer has not cited any reason for not giving the copies of the statements sought for by the appellants. But in the counter affidavit the contention taken is that Section 67(5) of the Act specifically provides that the Officer can deny issuance of copies of statement if the same is prejudicial to the investigation. The affidavit cannot supplement the reasons which are not there in the order. On going through the judgment of the learned Single Judge, the learned Single Judge has rightly exercised his jurisdiction and set aside Ext.P10 and directed the officer to pass fresh orders in the request submitted by the appellants for issuance of copies of the statements. The learned Single Judge has in fact gone a step ahead and discussed the relevant provisions of law under the Act and made passive observations which may be prejudicial to the appellants - In view of the matter, since the learned Single Judge has set aside Ext.P10 and directed re-consideration, the first respondent who is directed to re-consider the application has to independently consider the request made by the appellants in tune with the provisions of the Act untrammeled by the observations made by the learned Single Judge in the judgment under appeal. Appeals disposed off. Issues:Grant of copy of statements recorded in the course of investigation and non-collection of tax for outward supply of rice.Analysis:The judgment involved multiple writ petitions challenging rejection orders related to the grant of copies of statements recorded during an investigation and the non-collection of tax for outward supply of rice. The main issue revolved around the denial of the appellants' request for copies of statements recorded by the respondents during the enquiry. The Sales Tax Officer had issued summons to a Director of the company, and upon his appearance, a statement was recorded. The appellants sought copies of these statements and requested the transfer of enquiry files, which were denied without specific reasons provided in the rejection orders.The learned Single Judge, after considering the arguments, referred to relevant sections of the CGST/SGST Act, 2017, and found that the only reason for denying the copy requests was that they 'cannot be considered.' The Judge held that this reason was insufficient and ordered the first respondent to re-consider the applications for providing copies of the statements. The Judge also highlighted that an affidavit cannot introduce new reasons not present in the original order, citing legal precedents to support this conclusion.Furthermore, the Judge directed the first respondent to independently re-consider the appellants' requests without being influenced by the previous judgment's observations. The judgment emphasized the need for the first respondent to evaluate the applications in accordance with the provisions of the Act, considering the current stage of the investigation. The writ appeals were disposed of with directions for the first respondent to process the applications for statement copies and make final decisions, taking into account the ongoing investigation and without being swayed by the previous judgment's observations.In conclusion, the judgment addressed the issues of denial of statement copies during an investigation and the proper application of legal provisions under the Act. It emphasized the importance of providing adequate reasons for decisions and ensuring that re-consideration is done impartially and in line with statutory requirements, irrespective of previous judicial observations.