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Gujarat HC castigates tax officials for ‘overreach’ and abuse of authority

Shishir Sinha New Delhi | Updated on November 26, 2019 Published on November 26, 2019

The Court observed that the entire exercise by officers from October 12 to 18 was without any authority of law and in flagrant disregard of the provisions of the Act and in total abuse of powers   -  Getty Images/iStockphoto

Officials had stayed unauthorisedly at assessee’s premises for days after search

Gujarat High Court has directed that strict action should be taken against Goods & Services (GST) officers who stay at assessee’s premises during a search without authority of law.

The Court was hearing a petition in which complainant had said that officials had stayed at his premise while conducting searches.

According to the Court, it was shocking to see that in a premises where there were three ladies, namely, the petitioner’s mother, wife and young daughter, male officers together with a CRPF officer have stayed from October 12-18, despite the fact that goods and articles had been seized on October 11, 2019.

Without authority

The Court further observed that the entire exercise carried out by the concerned officers from October 12 to 18 was without any authority of law and in flagrant disregard of the provisions of the Act and the rules and in total abuse of the powers vested in them under the Act.

It was also very critical of the inquiry reports submitted by Gujarat’s Chief Commissioner of State Tax.

The first report was submitted on October 20, and after Court’s instruction, a second report was submitted last week. According to the Bench, upon perusal of the report, it emerges that it is no better than the earlier report (October 20th) submitted by the Assistant Commissioner of State Tax, and does not meet with the directions issued by this court in letter and spirit.

Inquiry needed

“It appears that the Chief Commissioner of GST has taken a very lenient view in the matter and instead of examining the action of the concerned officers in the context of the relevant provisions of the Goods & Services Tax Act, has tried to justify the action of the concerned officers, which is required to be deprecated in the strictest terms,” it said.

“The manner in which the officers have conducted themselves by overreaching the process of law and acting beyond the powers vested in them under sub-section (2) of section 67 of the CGST Act needs to be deprecated in the strictest terms. Therefore, a proper inquiry needs to be made in respect of the action of the respondent officers of staying day and night at the premises of the petitioner without any authority of law,” a division bench of Justices Harsha Devani and Sangeeta K Vishen.

Welcome decision

According to Harpreet Singh, Partner with KPMG the ruling has rightly held that even the power of inspection, search and seizure is to be exercised within the contours of the law. “It is good to see that the High Court has appreciated the humane side of search proceedings and appreciated the fact that staying day and night at premises of the assessee without any authority of law is not permissible,” he said.

Rajat Mohan, Senior Partner with AMRG said “Departmental search and seizures are often touted as a tool of harassment and intimidation whereby officers are seen using the excessive force in flagrant disregard of the legal provisions, so as to gratify their collection targets.”

Published on November 26, 2019
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