TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 1511
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....ted 11.04.2023 being issued from respondent no. 1 (vide Annexure-G to the writ petition). Aggrieved by the same, the present writ petition is filed. 2. The petitioner in the instant writ petition has prayed for the following reliefs: "WHEREFORE, it is respectfully prayed that, this Hon'ble Court be pleased to: i. Issue a writ of Certiorari or any other direction or writ for quashing the show cause notice dated 11/04/2023 issued by the Respondent 3 as showed in Annexure-G vide bearing no. GEXCOM/AC/FU/1423/2021-AE-OIO-COMMR-CGST-Bengaluru (NW) issued by the Respondent No. 1 in the interest of justice and equity in so far as petitioner concerned only. ii. Issue a writ of mandamus/order /direction/appropriate order directing the Respondent authorities to restore GST registration in the interest of equity and justice. iii. Further direct the respondents to refund the predeposit of Rs.50 Lakhs with interest from the date of deposit till date of refund interest of justice and equity. iv. Pass any order, or direction as deemed fit in the facts and circumstance of the case including cost in the interest of justice and equity." 3. However, in the course of the arguments....
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....ct and KGST Act. It is contended that as the inspection, search and seizure is not conducted by a proper Officer, the consequential show cause notice though issued by a proper Officer under Section 74 of the CGST Act and KGST Act has to be set aside and consequently, the respondents are also required to reimburse the sum of Rs. 50,00,000/- (Rupees Fifty Lakhs only) deposited by the petitioner. 5. Per contra, the learned counsel for the respondents, upon instructions, submits that though bulk of the investigation, inspection, search and seizure have been done by respondent no. 2, respondent no.3 has also recorded certain statement of the petitioner. He further submits that though in the show cause notice respondent no. 1 has relied upon the investigation, inspection, search and seizure done by respondent no. 2, as the show cause notice is issued by a proper Officer, the same cannot be set aside. 6. Thus, based on the submissions made by the learned counsel for the petitioner and the respondents, it has to be concluded that substantial portion of the investigation, inspection, search and seizure in respect of the case of the petitioner has been conducted by respondent no. 2 and onl....
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....s difficult upon any general principles to limit the omnipotence of the sovereign legislative power by judicial interposition, except so far as the express words of a written Constitution give that authority." Now, if the Evidence Act, 1872 which is a law consolidating, defining and amending the law of evidence, no provision of which is challenged as violating the Constitution - permits relevancy as the only test of admissibility of evidence (See Section 5 of the Act) and, secondly, that Act or any other similar law in force does not exclude relevant evidence on the ground, that it was obtained under an illegal search or seizure, it will be wrong to invoke the supposed spirit of our Constitution for excluding such evidence. Nor is it open to us to strain the language of the Constitution, because some American Judges of the American Supreme Court have spelt out certain constitutional protections from the provisions of the American Constitution. In M.P. Sharma v. Satish Chander, already referred to, a search and seizure made under the Criminal Procedure Code was challenged as illegal on the ground of violation of the fundamental right under Article 20(3), the argument being that t....
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....proper Officer, the respondents are entitled to use the same against the petitioner and therefore the show cause notice, as the same has been issued by a proper Officer, cannot be set aside. 10. Whereas the petitioner submits that in Pooran Mal's case, search and seizure was not ab initio void and the decision is rendered in respect of utilisation of the evidence conducted during an illegal search for the purposes of income tax and not GST. It is further contended that the said judgment has been delivered by the Apex Court in the light of the judgment of the Apex Court in A.K. Gopalan v. State of Madras [AIR 1950 SC 27] which held the field at that particular point of time, which is no longer a valid law. Reliance is placed by the petitioner on a Division Bench decision of this Court in C. Ramaiah Reddy v. Assistant Commissioner of Income-tax reported in [2012] 20 taxmann.com 781 (Karnataka) wherein under paragraphs 25, 60, 61 and 62 it has been held as under: "25. The obvious consequence is that the requirement about the existence of reason to believe, consequent upon the information in possession and concerned authority is not satisfied, the search cannot be said to be a s....
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.... passed in such proceedings would be non est and void ab initio. That is a ground available to the assessee to challenge the assessment order in an appeal. May be a procedural irregularity in conducting search and seizure may not vitiate the assessment order, but the very initiation of the proceedings if it is not in accordance with law, the initiation would be without jurisdiction, void and the consequent order would also be void. It is not a curable defect. It is not voidable at the option of the assessee. If he has not challenged the same by way of writ petition under article 226 of the Constitution, he would not lose his right to challenge the same in an appeal. There cannot be an estoppel against the statute. In this regard it is useful to notice the specific words used in sub-section (1) (b) of section 253, i.e, "an order passed by the Assessing Officer under clause (c) of section 158BC in respect of search initiated under section 132". The language used by the Legislature tends to show that this appeal provision specifically applies to an assessment order consequent to search initiated under section 132 of the Act. In interpreting fiscal statute, the court cannot proceed ....
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....avention of the provisions of Section 132 of the Income-tax Act, still the materials seized was liable to be used subject to law before the income-tax authorities against the person from whose custody it was seized. There is no quarrel with the said legal proposition. In the first place, the provisions relating to the block assessment was not in the statute on the day the said judgment was delivered by the apex court. Secondly, prior to the incorporation of the provisions of block assessment for an assessment, search was not a condition precedent. It is in that context it was held even if search and seizure is illegal, the material recovered during such illegal search and seizure could be looked into for the purposes of assessment and act, but that is not possible, in case of block assessment. Even if a return is filed in pursuance of a direction issued under the said Chapter and the material secured during search and seizure which is declared as illegal is looked into, still the order of assessment passed in this proceedings would be a nullity because the very initiation of the proceedings is void. Those materials secured in the illegal search and seizure would certainly be made u....
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.... written Constitution give that authority." ........... In M.P. Sharma v. Satish Chander, already referred to, a search and seizure made under the Criminal Procedure Code was challenged as illegal on the ground of violation of the fundamental right under Article 20(3), the argument being that the evidence was no better than illegally compelled evidence. In support of that contention reference was made to the Fourth and Fifth amendments of the American Constitution and also to some American cases which seemed to hold that the obtaining of incriminating evidence by illegal seizure and search tantamounts to the violation of the Fifth amendment. The Fourth amendment does not place any embargo on reasonable searches and seizures. It provides that the right of the people to be secure in their persons, papers and effects against unreasonable searches and seizures shall not be violated. Thus the privacy of a citizen's home was specifically safeguarded under the-Constitution, although reasonable searches and seizures were not taboo. Repelling the submission, this Court observed at page 1096." A power of search and seizure is in any system of jurisprudence in overriding power....
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.... tax who is assigned that function by the Commissioner in the Board;" (ii) Section 3 of the CGST Act reads as under: "3. The Government shall, by notification, appoint the following classes of officers for the purposes of this Act, namely:- (a) Principal Chief Commissioners of Central Tax or Principal Directors General of Central Tax, (b) Chief Commissioners of Central Tax or Directors General of Central Tax, (c) Principal Commissioners of Central Tax or Principal Additional Directors General of Central Tax, (d) Commissioners of Central Tax or Additional Directors General of Central Tax, (e) Additional Commissioners of Central Tax or Additional Directors of Central Tax, (f) Joint Commissioners of Central Tax or Joint Directors of Central Tax, (g) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax, (h) Assistant Commissioners of Central Tax or Assistant Directors of Central Tax, and (i) any other class of officers as it may deem fit: Provided that the officers appointed under the Central Excise Act, 1944 (1 of 1944) shall be deemed to be the officers appointed under the provisions of this Act." (iii) Section 5 of the CGST Ac....
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....e to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things: Provided that where it is not practicable to seize any such goods, the proper officer, or any officer authorised by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer: Provided further that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act. (3) The documents, books or things referred to in subsection (2) or any other documents, books or things produced by a taxable person or any other person, which have not been relied upon for the issue of notice under this Act or the rules made thereunder, shall be returned to such person within a period not exceeding thirty days of the issue of the ....
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....f the said Code shall have effect as if for the word "Magistrate", wherever it occurs, the word "Commissioner" were substituted. (11) Where the proper officer has reasons to believe that any person has evaded or is attempting to evade the payment of any tax, he may, for reasons to be recorded in writing, seize the accounts, registers or documents of such person produced before him and shall grant a receipt for the same, and shall retain the same for so long as may be necessary in connection with any proceedings under this Act or the rules made thereunder for prosecution. (12) The Commissioner or an officer authorised by him may cause purchase of any goods or services or both by any person authorised by him from the business premises of any taxable person, to check the issue of tax invoices or bills of supply by such taxable person, and on return of goods so purchased by such officer, such taxable person or any person in charge of the business premises shall refund the amount so paid towards the goods after cancelling any tax invoice or bill of supply issued earlier. Power to summon person to give evidence and produce documents. 70.(1) The proper officer under this Act shal....
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....ervice of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. (6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. (7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-sectio....
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.... and not otherwise. In the instant case, admittedly, substantial part of the investigation including search and seizure of the materials has been done by respondent no. 2 who is not the proper Officer and under the circumstances, the said investigation, inspection, search and seizure in respect of the petitioner herein has to be considered ab initio void. When the same is considered as ab initio void, notice issued under Section 74 of the CGST Act based upon search, seizure and the statements recorded from the petitioner which has been relied upon, has to be considered illegal and that there is no satisfaction on part of the proper Officer for issuance of the notice under Section 74 of the CGST Act. If respondent no. 2 after investigation has transferred the case to respondent no.3, for issuance of notice under Section 74, respondent no.3 was required to redo the investigation and come to an independent conclusion as contemplated under Section 74 of the CGST Act and only thereafter a fresh notice requires to be issued. Respondent no. 1 cannot issue a notice under Section 74 on the 'borrowed satisfaction'. Under the said circumstances, the impugned notice is liable to be se....