2025 (5) TMI 1441 - SCH - GST

Tax Proceedings: Petitioner Wins Right to Document Access, Department Ordered to Return Certified and Original Files Within Two Weeks

HC upheld petitioner's procedural rights in tax proceedings, directing department to return certified copies of non-relied documents and originals of ... Miscellaneous application seeking Direction to release/ provide the original copy of documents seized by the Respondent from the premises of the Petitioner during various searches conducted - department has lost the original document - HELD THAT:- We dispose of these miscellaneous application(s) with a direction that so far as File nos. 11, 12 and 13 respectively are concerned since the original have been lost, the department shall furnish certified copies of those three files keeping all other contentions available to both the sides open in that regard. So far as original file Nos. 1-10 respectively are concerned the learned ASG very fairly submitted that the department is willing to hand over the same. The assessee has to collect the same from the concerned department. Pending application(s), if any, stand disposed of. 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered by the Court in the matter include:Whether the High Court's direction to return original documents seized during investigation but not relied upon in show cause notices was appropriate and should be upheld.The extent and nature of the petitioner's right to access original documents seized by the authorities, including the right to receive certified copies of lost originals.The procedural fairness in adjudication proceedings, specifically the petitioner's right to submit replies, cross-examine witnesses, and receive due opportunity of hearing.The validity and scope of the Court's clarification regarding the return of certified copies of documents not relied upon by the department, as opposed to the return of original documents with proper authentication.The procedural obligations of the department in handing over seized documents, including timelines and cooperation in assessment proceedings.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Appropriateness of High Court's Direction to Return Original Documents Not Relied UponRelevant legal framework and precedents: The Court considered principles of natural justice and procedural fairness in tax and revenue proceedings, which require that an assessee be given access to documents essential for preparing a reply to show cause notices. The right to inspect and obtain documents that form the basis of allegations is fundamental to ensuring a fair hearing.Court's interpretation and reasoning: The High Court's order directed the respondents to hand over all original documents seized but not relied upon in issuing show cause notices, so the petitioner could submit a comprehensive reply. The Court found this approach consistent with the principles of fair adjudication, enabling the petitioner to effectively challenge the case against him.Key evidence and findings: The seized documents were detailed in a seizure order under GST provisions, listing multiple files with page counts. The petitioner contended that originals with proper stamps of investigating officers and independent witnesses should be returned, emphasizing the authenticity and evidentiary value of originals over copies.Application of law to facts: The Court upheld the High Court's direction but clarified that the department should return certified copies of documents not relied upon rather than originals, balancing the department's interest in preserving evidence and the petitioner's right to access relevant material.Treatment of competing arguments: The petitioner sought restoration of the original High Court order without the Court's subsequent clarification, insisting on originals with proper authentication. The department argued for returning certified copies to maintain evidentiary integrity. The Court sided with the department's position, allowing certified copies for files whose originals were lost and originals for others, to be collected by the petitioner.Conclusions: The direction to return certified copies of non-relied documents and originals of others within a stipulated time was held appropriate, ensuring procedural fairness without compromising evidentiary safeguards.Issue 2: Petitioner's Right to Submit Reply and Cross-Examine WitnessesRelevant legal framework and precedents: Principles of natural justice mandate that an assessee be given a reasonable opportunity to respond to allegations, including access to documents and the right to cross-examine witnesses whose evidence is relied upon. This is essential for a fair adjudication under tax laws.Court's interpretation and reasoning: The High Court's order explicitly provided that after receipt of original documents, the petitioner could submit a reply within 30 days and that the authorities must adjudicate the case on its own merits, affording due opportunity of hearing. It further allowed the petitioner the right to cross-examine witnesses at appropriate stages upon moving suitable applications.Key evidence and findings: The show cause notices dated 08.06.2022 and 03.08.2022 were central to the proceedings, with the petitioner's ability to reply and challenge evidence being critical for a fair process.Application of law to facts: The Court reinforced the petitioner's right to a fair hearing, including submission of replies and cross-examination, ensuring adherence to due process in administrative adjudication.Treatment of competing arguments: The department did not dispute these rights but emphasized procedural compliance and timelines. The Court balanced these interests by directing timely return of documents and expeditious filing of replies.Conclusions: The petitioner's procedural rights were upheld, with directions to facilitate effective participation in the adjudication process.Issue 3: Validity and Scope of Court's Clarification Regarding Return of Certified CopiesRelevant legal framework and precedents: The Court's inherent powers to clarify and modify interim orders to ensure justice were invoked. The balance between safeguarding evidence and enabling the petitioner's defense was key.Court's interpretation and reasoning: The Court clarified that while the High Court directed return of originals, the department was to return certified copies of documents not relied upon, preserving originals for evidentiary purposes. This clarification was intended to prevent misuse or loss of original evidence while allowing the petitioner access to necessary material.Key evidence and findings: The seizure order and the list of files, some of which originals were lost, informed the Court's decision to allow certified copies for those files and originals for others.Application of law to facts: The Court applied principles of evidence preservation and procedural fairness, ensuring that the petitioner's rights are not compromised while maintaining the integrity of the investigation.Treatment of competing arguments: The petitioner challenged the clarification, seeking restoration of the original order. The Court dismissed this, emphasizing the practical necessity of returning certified copies in lieu of lost originals.Conclusions: The clarification was upheld as a balanced approach, reconciling competing interests.Issue 4: Procedural Obligations and Timelines for Handing Over Documents and Cooperation in ProceedingsRelevant legal framework and precedents: Administrative law principles require timely compliance with court directions and cooperation in proceedings to avoid undue delay and prejudice.Court's interpretation and reasoning: The Court directed the department to hand over originals (or certified copies where originals were lost) within two weeks or one week as applicable. It also mandated the petitioner to collect documents promptly and cooperate fully in assessment proceedings without causing delay.Key evidence and findings: The department's willingness to hand over original files 1-10 and provide certified copies for files 11-13 was noted. The petitioner's cooperation was emphasized to ensure smooth adjudication.Application of law to facts: The Court's directions aimed at expediting the process, preventing procedural obstructions, and ensuring adherence to timelines.Treatment of competing arguments: Both parties agreed on the necessity of compliance and cooperation. The Court's directions balanced the interests of both sides.Conclusions: The Court's procedural directions were upheld as necessary for effective and fair adjudication.3. SIGNIFICANT HOLDINGS'We are not inclined to disturb the impugned order passed by the High Court, however with a clarification that the respondent authorities are hereby directed to return the certified copies of the documents which according to them are not relied upon for proceeding further and on receipt of the said certified copies from the department concerned within a period of two weeks the necessary reply, if any, be filed by the petitioner-assessee and upon receipt of the said reply necessary proceedings further make one.''As a consequence, we deem it appropriate to direct the Respondents to handover all the original documents to petitioner which have been seized by them and not relied on by Respondents while issuing Show Cause notices dated 08.06.2022 and 03.08.2022, so that the petitioner is enabled in submitting his reply.''Petitioner shall have the right to cross examine witnesses whose evidence has been relied upon in the show cause notices dated 08.06.2022 and 03.08.2022 at appropriate stage in adjudication proceedings and the petitioner shall be at liberty to move appropriate application at appropriate stage for exercising the said right, in the course of being afforded personal hearing.'Core principles established include the necessity of procedural fairness in revenue proceedings, the right of the assessee to access documents essential for defense, the balance between preserving evidence and enabling fair trial rights, and the obligation of parties to cooperate and comply with court directions within stipulated timelines.Final determinations on each issue affirmed the High Court's order with clarifications, mandated return of originals or certified copies as appropriate, upheld petitioner's procedural rights including reply and cross-examination, and imposed timelines for compliance and cooperation to ensure expeditious adjudication.