2024 (2) TMI 121 - HC - GST

GST investigation documents cannot be disclosed until final adjudication as it would provide unfair advantage to accused

Jagannathdham Superstructures Pvt. Ltd., M/s. SN Jyoti Associates Pvt. Ltd., Shree Equipments and Engineers, Versus Deputy Director, Directorate General of Goods and Service Tax Intelligence, Bhubaneswar and Another, The Intelligence Officer, DG, GST Intelligence, Bhubaneswar and others, Assistant/Deputy Director, Directorate General of Goods and Service Tax Intelligence, Bhubaneswar and another

The HC dismissed a petition seeking certified copies of order sheets/note sheets and search warrants in a GST evasion investigation involving works ... Refusal to grant certified copies of the order sheet/note sheet and search warrant - Non-payment of GST - Works Contract Services - HELD THAT:- The process of investigation in tax evasion cases cannot be construed to be over in the event of issuance of Show Cause Notice by the competent authority and the investigative process can be said to be over only when the quantum of evasion has been quantified or it has been determined that there was in fact no evasion of taxes or contravention of law by the process of adjudication/appeal. Further, the question of launching of prosecution, which is in many cases is a natural extension of an investigation, still remains to be decided and if it were to be assumed that an investigation is deemed to be concluded on issuance of Show Cause Notice and that the order sheet/note sheet recorded in the case file were to be disclosed, the person against whom prosecution is proposed to be launched by the department would gain an unfair advantage. Mere issuance of SCN does not mean that the process of investigation has been concluded and a final decision has been arrived at, rather, it is only one of the steps to arrive at a final decision: As such any disclosure of information at this stage, as sought for by the petitioner, would impede the process of investigation which can be deemed to be complete only after the final decision/adjudication about the liability of the person under investigation has been made after the matter has gone through all the stages of appeals and revisions and a final decision about prosecuting or not prosecuting such person has been taken by the competent authority. This Court is not inclined to entertain the prayers of the Petitioners. Accordingly, this Court hereby allows the rejection letters issued by the Deputy Director, DGGI (Opposite Party No.1), refusing to grant certified copies of the order sheet/note sheet and search warrant. Petition dismissed. Issues Involved:1. Rejection of certified copies of the order sheet/note sheet and search warrant.2. Validity of show-cause notices for non-payment of GST on 'Works Contract Services.'Summary:I. Rejection of Certified Copies:The Petitioners challenged the rejection letters issued by the Deputy Director, DGGI, refusing to grant certified copies of the order sheet/note sheet and search warrant. The Petitioners argued that the search warrant is a statutory requirement and must be provided to enable the investigation team to search the premises. They contended that denying these documents violates the principles of natural justice and fair play, as these documents are crucial for filing an effective show-cause reply. The Petitioners also highlighted that the investigation had attained finality, and the documents sought are not 'internal official documents.'The Opposite Parties countered that the search warrant was shown and acknowledged by the concerned persons during the search, and there is no strict rule that copies must be provided. They argued that the investigation is not concluded merely by issuing a Show Cause Notice (SCN) and that disclosing the order sheet/note sheet could impede the investigation, reveal the identity of informants, and affect ongoing investigations.The Court held that the process of investigation is not deemed complete with the issuance of an SCN. Disclosure of the requested documents at this stage could impede the investigation and jeopardize future investigations. Therefore, the Court upheld the rejection letters issued by the Deputy Director, DGGI.II. Validity of Show-Cause Notices:The Petitioners also challenged the show-cause notices for non-payment of GST on 'Works Contract Services' issued by the Deputy Director, DGGI. The Court found that these show-cause notices were issued in accordance with the law.Conclusion:The Court dismissed the Writ Petitions, upholding the rejection of the certified copies and the validity of the show-cause notices. The interim order dated 11.01.2023 was vacated, and all connected Writ Petitions were dismissed.