Paresh Nathalal Chauhan vs. State Of Gujarat (Gujarat High Court)

(Image Credit: TOI)

C/SCA/18463/2019 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 18463 of 2019
================================

PARESH NATHALAL CHAUHAN
Versus
STATE OF GUJARAT
=====================================
Appearance:
MR CHETAN K PANDYA(1973) for the Petitioner(s) No. 1
MR MIHIR THAKORE, SR. ADVOCATE WITH MS MAITHILI MEHTA,
ASST. GOVERNMENT PLEADER(1) for the Respondent(s) No. 1,2
=====================================
CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI
and
HONOURABLE MS. JUSTICE SANGEETA K. VISHEN
Date : 24/12/2019
ORAL ORDER
(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. In this case, pursuant to an authorisation
issued under subsection
(2) of section 67 of the
Central Goods and Services Tax Act, 2017/Gujarat
Goods and Services Tax Act, 2017 (hereinafter
referred to as “the GST Acts”), a search came to
be conducted at the residential premises of the
petitioner herein, which went on from 11.10.2019
to 18.10.2019. The manner in which the search has
taken place, whereby a search for any goods
liable to confiscation or any documents or books
or things, has literally been converted to a
search for the taxable person and the search
party has camped in the residential premises of
Page 1 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
the petitioner for in all eight days, during
which period the family members of the petitioner
were at the mercy of the authorised officer and
were confined to the searched premises and kept
under surveillance and were not permitted to
leave the premises without the permission of the
authorised officer, has shocked the conscience of
this court. This court is, therefore, of the view
that it would be failing in its duty as a
sentinel on the qui vive if it were to turn a
blind eye to the violation of the legal and
fundamental rights of citizens by
authoritarianism and remain a mute spectator. It
is, in these circumstances, that the court has
thought it fit to comment upon the validity and
nature of the search proceedings.
2. On 25.10.2019 this court passed an order in
the following terms:
“1. Mr. Chetan Pandya, learned advocate for
the petitioner has tendered an affidavit of
Nathalal Maganlal Chauhan, the father of the
petitioner. The same is taken on record.
2. The learned Assistant Government Pleader
has submitted a confidential report of the
proceedings carried out by the respondents
at the premises of the petitioner pursuant
to the authorization issued in favour of the
second respondent under subsection
(2) of
section 67 of the Central Goods and Services
Tax Act, 2017 (hereinafter referred to as
Page 2 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
“the CGST Act”).
3. This court has perused the report in its
entirety. A perusal of the report reveals
that the concerned officers authorised to
carry out the search at the residential
premises of the petitioner had stayed there
from 11.10.2019 to 18.10.2019. A perusal of
the record of the proceedings of the case
reveals that on 11.10.2019 at 2:15, it has
been recorded that after searching the rooms
in the premises, the records of the accounts
were brought to the main room and gathered
there, which included the bank passbooks of
the family members as well as cheque books
and that verification thereof is continuing.
The proceedings thereafter do not reveal any
further search carried out at the premises
but reveal that the officers had stayed at
the premises and had examined the phone
calls that were received by the family
members and had recorded their phone calls.
They had also recorded statements of the
family members of the petitioner on
11.10.2019. The record further reveals that
the officers who had arrived on the previous
day as well as the panchas were relieved by
new set of officers and panchas and this
cycle continued till 18.10.2019. It appears
that thereafter they have been questioning
the family members of the petitioner on a
day to day basis till 18.10.2019.
4. Section 67 of the CGST Act, reads thus:“
67. Power of Inspection, search and
seizure.
(1) Where the proper officer, not below
the rank of Joint Commissioner, has
reasons to believe that–
(a) a taxable person has suppressed any
Page 3 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
transaction relating to supply of goods
or services or both or the stock of
goods in hand, or has claimed input tax
credit in excess of his entitlement
under this Act or has indulged in
contravention of any of the provisions
of this Act or the rules made thereunder
to evade tax under this Act; or
(b) any person engaged in the business
of transporting goods or an owner or
operator of a warehouse or a godown or
any other place is keeping goods which
have escaped payment of tax or has kept
his accounts or goods in such a manner
as is likely to cause evasion of tax
payable under this Act, he may authorise
in writing any other officer of central
tax to inspect any places of business of
the taxable person or the persons
engaged in the business of transporting
goods or the owner or the operator of
warehouse or godown or any other place.
(2) Where the proper officer, not below
the rank of Joint Commissioner, either
pursuant to an inspection carried out
under subsection
(1) or otherwise, has
reasons to believe that any goods liable
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
Page 4 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
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 said notice.
(4) The officer authorised under subsection
(2) shall have the power to seal
or break open the door of any premises
or to break open any almirah, electronic
devices, box, receptacle in which any
goods, accounts, registers or documents
of the person are suspected to be
concealed, where access to such
premises, almirah, electronic devices,
box or receptacle is denied.
(5) The person from whose custody any
documents are seized under subsection
(2) shall be entitled to make copies
thereof or take extracts therefrom in
the presence of an authorised officer at
such place and time as such officer may
indicate in this behalf except where
making such copies or taking such
extracts may, in the opinion of the
proper officer, prejudicially affect the
Page 5 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
investigation.
(6) The goods so seized under subsection
(2) shall be released, on a
provisional basis, upon execution of a
bond and furnishing of a security, in
such manner and of such quantum,
respectively, as may be prescribed or on
payment of applicable tax, interest and
penalty payable, as the case may be.
(7) Where any goods are seized under
subsection
(2) and no notice in respect
thereof is given within six months of
the seizure of the goods, the goods
shall be returned to the person from
whose possession they were seized:
Provided that the period of six months
may, on sufficient cause being shown, be
extended by the proper officer for a
further period not exceeding six months.
(8) The Government may, having regard to
the perishable or hazardous nature of
any goods, depreciation in the value of
the goods with the passage of time,
constraints of storage space for the
goods or any other relevant
considerations, by notification, specify
the goods or class of goods which shall,
as soon as may be after its seizure
under subsection
(2), be disposed of by
the proper officer in such manner as may
be prescribed.
(9) Where any goods, being goods
specified under subsection (8), have
been seized by a proper officer, or any
officer authorised by him under subsection
(2), he shall prepare an
inventory of such goods in such manner
as may be prescribed.
Page 6 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
(10) The provisions of the Code of
Criminal Procedure, 1973, relating to
search and seizure, shall, so far as may
be, apply to search and seizure under
this section subject to the modification
that subsection
(5) of section 165 of
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.”
5. Thus, subsection
(2) of section 67 of
the CGST Act empowers the authorised officer
to search and seize goods, documents or
Page 7 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
books or things. Subsection
(4) of section
67 empowers the officer authorised under
subsection
(2) to seal or break open door
of any premises or to break open any
almirah, electronic devices, box, receptacle
in which any goods, accounts, registers or
documents of the person are suspected to be
concealed, where access to such premises,
almirah, electronic devices, box or
receptacle is denied. Thus, the officers
concerned were authorised to seize such
books, goods, documents, or things which
were found at the premises. Subsection
(2)
of section 67 does not empower the officer
concerned to record statements of family
members through force or coercion or to
record their conversations in their mobile
phones. In exercise of powers under subsection
(2) of section 67 of the CGST Act,
it is not permissible for the authorised
officer to use coercive measures against
family members to find out the whereabouts
of the taxable person. It is shocking to see
that in a premises where there are three
ladies, namely, the petitioner’s mother,
wife and young daughter, male officers
together with a CRPF Officer have stayed
throughout day and night despite the fact
that the goods, articles and things were
already seized on 11.10.2019. The entire
exercise carried out by the concerned
officers from 12.10.2019 to 18.10.2019 was
totally 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. The
manner in which the officers have conducted
themselves by overreaching the process of
law and acting beyond the powers vested in
them under subsection
(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
Page 8 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
the respondent officers of staying day and
night at the premises of the petitioner
without any authority of law.
6. In the aforesaid premises, the first
respondent Commissioner of State Tax,
Ahmedabad shall carry out a proper inquiry
in the matter and submit a report before
this court on or before 13th November, 2019.
7. Stand over to 13th November, 2019.
8. Registry to forthwith forward a copy of
this order to the Commissioner of State Tax
as well as Chief Secretary of the State to
look into the matter and do the needful to
ensure that such incidents are not
repeated.”
3. Thereafter, on request made by the learned
Government Pleader, time was granted to place the
report in compliance with the above order and the
matter was adjourned to 20.11.2019.
4. On 20.11.2019, this court passed the
following order:
“1. Ms. Manisha L. Shah, learned Government
Pleader has tendered a report of inquiry
made by the Chief Commissioner of State Tax,
Gujarat State, Ahmedabad in compliance with
the directions issued by this court vide
order dated 25.10.2019.
2. Upon perusal of the report, it emerges
that it is no better than the earlier report
dated 20.10.2019 submitted by the Assistant
Commissioner of State Tax, and does not meet
Page 9 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
with the directions issued by this court in
letter and spirit. It appears that the Chief
Commissioner of G.S.T. 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.
3. The learned Government Pleader prays for
time to submit another report. At her
request, the matter is adjourned to 11th
December 2019.”
5. Thereafter, Mr. Mihir Thakore, Senior
Advocate, learned counsel appeared on behalf of
the respondents and submitted proposed
Departmental Instructions in the nature of
guidelines for conducting search under subsection
(2) of section 67 of the GST Acts. The
said guidelines did not address the concerns of
this court in the context of situations like the
one involved in the present case. Moreover, the
report, in compliance with the order dated
25.10.2019, was not yet submitted. Subsequently,
a report dated 19.12.2019 made by the Chief
Commissioner of State Tax, Gujarat State came to
be submitted, reference to which shall be made at
an appropriate stage.
6. Considering the action of the respondents of
Page 10 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
staying in the residential premises of the
petitioner, wherein five members, including three
female members, out of whom one was a young
unmarried girl, for a period of eight days,
despite the fact that the search was concluded on
the first day itself, the court was deeply
concerned about the matter, and more particularly
that such incidents should not be repeated.
Therefore, Mr. Tushar Hemani, Senior Advocate,
was requested to assist the court as an amicus
curiae.
7. Mr. Mihir Thakore, learned counsel for the
respondent State authorities, submitted that subsection
(2) of section 67 of the GST Acts
empowers the proper officer to search and seize
goods, documents, books or things secreted at a
place. Thus, an authorization is issued qua a
place and not a person. Referring to subsection
(10) of section 67 of the GST Acts, it was
pointed out that the same provides that the
provisions of the Code of Criminal Procedure,
1973 (hereinafter referred to as “the Code”)
relating to search and seizure apply to search
and seizure under that section. Reference was
made to the provisions relating to search and
seizure as provided in the Code, to submit that
the officers concerned had resorted to the powers
of search and seizure as contained therein.
Page 11 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
Insofar as the statements of the members residing
in the searched premises are concerned, reference
was made to section 161 of the Code.
7.1 However, the learned counsel, despite his
best efforts, could not justify the continued
stay of the search party in the searched premises
after the search was over on 11.10.2019. It was,
however, submitted that such action of the
officers, though not backed by any statutory
provision, was bona fide, and the reason why this
has happened is because of past precedents
inasmuch as such action was being taken earlier
under the Gujarat Value Added Tax Act, 2003
(hereinafter referred to as “the GVAT Act”). It
was urged that the respondents have already
framed guidelines laying down the procedure to be
followed while conducting search under subsection
(2) of section 67 of the GST Acts and
that the respondents are ready and willing to
incorporate such suggestions as may be made by
this court.
8. Mr. Tushar Hemani, learned amicus curiae,
invited the attention of this court to the
decision of the Supreme Court in District
Registrar and Collector, Hyderabad and Another v.
Canara Bank, (2005) 1 SCC 496, wherein the
Page 12 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
provisions for search and seizure under section
132(5) of the Income Tax Act, 1961 were construed
strictly on the ground that they were a “serious
intrusion into the privacy of a citizen”. The
court further held thus:
“35. The earliest case in India to deal with
“privacy” and “search and seizure”
was M.P. Sharma v. Satish Chandra in the
context of Article 19(1)(f) and Article
20(3) of the Constitution. The contention
that search and seizure violated Article
19(1)(f) was rejected, the Court holding
that a mere search by itself did not affect
any right to property, and though seizure
affected it, such effect was only temporary
and was a reasonable restriction on the
right. The question whether search warrants
for the seizure of documents from the
accused were unconstitutional was not gone
into. The Court, after referring to the
American authorities, observed that in the
US, because of the language in the Fourth
Amendment, there was a distinction between
legal and illegal searches and seizures and
that such a distinction need not be imported
into our Constitution. The Court opined that
a search warrant was addressed to an officer
and not to the accused and did not violate
Article 20(3). In the present discussion the
case is of limited help. In fact, the law as
to privacy was developed in later cases by
spelling it out from the right to freedom of
speech and expression in Article 19(1)(a)
and the right to “life” in Article 21.
36. Two later cases decided by the Supreme
Court of India where the foundations for the
right were laid, concerned the intrusion
into the home by the police under State
Page 13 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
regulations, by way of “domiciliary visits”.
Such visits could be conducted any time,
night or day, to keep a tab on persons for
finding out suspicious criminal activity, if
any, on their part. The validity of these
regulations came under challenge. In the
first one, Kharak Singh v. State of UP, the
U.P. Regulations regarding domiciliary
visits were in question and the majority
referred to Munn v. Illinois and held that
though our Constitution did not refer to the
right to privacy expressly, still it can be
traced from the right to “life” in Article
21. According to the majority, clause 236 of
the relevant Regulations in U.P., was bad in
law; it offended Article 21 inasmuch as
there was no law permitting interference by
such visits. The majority did not go into
the question whether these visits violated
the “right to privacy”. But, Subba Rao, J.
while concurring that the fundamental right
to privacy was part of the right to liberty
in Article 21, part of the right to freedom
of speech and expression in Article 19(1)
(a), and also of the right to movement in
Article 19(1)(d), held that the Regulations
permitting surveillance violated the
fundamental right of privacy. In the
discussion the learned Judge referred to
Wolf v. Colorado. In effect, all the seven
learned Judges held that the “right to
privacy” was part of the right to “life” in
Article 21.
37. We now come to the second case, Gobind
v. State of M.P. in which Mathew, J.
developed the law as to privacy from where
it was left in Kharak Singh. The learned
Judge referred to Griswold v. Connecticut
where Douglas, J. referred to the theory of
penumbras and peripheral rights and had
stated that the right to privacy was implied
in the right to free speech and could be
Page 14 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
gathered from the entirety of fundamental
rights in the constitutional scheme, for,
without it, these rights could not be
enjoyed meaningfully. Mathew, J. also
referred to Jane Roe v. Henry Wade where it
was pointed out (SCC p. 155, para 18) that
though the right to privacy was not
specifically referred to in the US
Constitution, the right did exist and
“roots of that right may be found in the
First, Fourth and Fifth Amendments, in
the penumbras of the Bill of Rights, in
the Ninth Amendment, and in the concept
of liberty guaranteed by the first
section of the Fourteenth Amendment”.
Mathew, J. stated that, however, the “right
to privacy was not absolute” and that the
makers of our Constitution wanted to ensure
conditions favourable to the pursuit of
happiness as explained in Olmstead v. United
States, US at p. 471; the privacy right can
be denied only when an “important
countervailing interest is shown to be
superior”, or where a compelling State
interest was shown. (Mathew, J. left open
the issue whether moral interests could be
relied upon by the State as compelling
interests). Any right to privacy, the
learned Judge said (see para 24), must
encompass and protect the personal
intimacies of the home, the family,
marriage, motherhood, procreation and childbearing.
This list was however not
exhaustive. He explained (see para 25) that,
if there was State intrusion there must be
“a reasonable basis for intrusion”. The
right to privacy, in any event (see para
28), would necessarily have to go through a
process of casebycase
development.
38. Coming to the particular U.P.
Page 15 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
Regulations 855 and 856, in question in
Gobind, Mathew, J. examined their validity
(see para 30). These, according to him, gave
large powers to the police and needed,
therefore, to be read down, so as to be in
harmony with the Constitution, if they had
to be saved at all. “Our Founding Fathers
were thoroughly opposed to a Police Raj” he
said. Therefore, the Court must draw
boundaries upon these police powers so as to
avoid breach of constitutional freedoms.
While it could not be said that all
domiciliary visits were unreasonable (see
para 31), still while interpreting them, one
had to keep the character and antecedents of
the person who was under watch as also the
objects and limitations under which the
surveillance could be made. The right to
privacy could be restricted on the basis of
compelling public interest. The learned
Judge noticed that unlike nonstatutory
regulations in Kharak Singh, here Regulation
856 was “law” (being a piece of subordinate
legislation) and hence it could not be said
in this case that Article 21 was violated
for lack of legislative sanction. The law
was very much there in the form of these
Regulations. Regulations 853(1) and 857
prescribed a procedure that was
“reasonable”. So far as Regulation 856 was
concerned, it only imposed reasonable
restrictions within Article 19(5) and there
was, even otherwise, a compelling State
interest. Regulations 853(1) and 857
referred to a class of persons who were
suspected as being habitual criminals, while
Regulation 857 classified persons who could
reasonably be held to have criminal
tendencies. Further Regulation 855 empowered
surveillance only of persons against whom
reasonable materials existed for the purpose
of inducing an opinion that they show a
determination to lead a life of crime. The
Page 16 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
Court thus read down the Regulations and
upheld them for the above reasons.
39. We have referred in detail to the
reasons given by Mathew, J. in Gobind to
show that, the right to privacy has been
implied in Articles 19(1)(a) and (d) and
Article 21; that, the right is not absolute
and that any State intrusion can be a
reasonable restriction only if it has
reasonable basis or reasonable materials to
support it.
40. A twoJudge
Bench in R. Rajagopal v.
State of T.N. held the right of privacy to
be implicit in the right to life and liberty
guaranteed to the citizens of India by
Article 21. “It is the right to be let
alone.” Every citizen has a right to
safeguard the privacy of his own. However,
in the case of a matter being part of public
records, including court records, the right
of privacy cannot be claimed. The right to
privacy has since been widely accepted as
implied in our Constitution, in other cases,
namely, People’s Union for Civil Liberties
v. Union of India, ‘X’ v. Hospital ‘Z’,
People’s Union for Civil Liberties v. Union
of India and Sharda v. Dharmpal.
49. While we are on (B), it is necessary to
make a brief reference to Section 93(1) of
the Code of Criminal Procedure, 1973 which
deals with power of the court to issue
“search warrants” (a) where the court has
“reason to believe” that a person to whom a
summons or order under Section 91 or a
requisition under Section 92(1) has been, or
might be, addressed, will not or would not
produce the document or thing as required by
summons or requisition, or (b) where such
document or thing is not known to the court
to be in the possession of any person, or
Page 17 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
(c) where the court considers that the
purposes of any inquiry, trial or other
proceeding under the Code, will be served by
a general search or inspection, it may issue
a search warrant; and the person to whom
such warrant is directed, may search or
inspect in accordance therewith and the
provisions contained in the Code. Under
Section 93(2), the court may, if it thinks
fit, specify in the warrant, the place or
part thereof to which only the search or
inspection shall extend; and the person
charged with the execution of such warrant
shall then search or inspect only the place
or part so specified. Under Section 93(2), a
warrant to search for a document, parcel or
other thing in the custody of the postal or
telegraph authority, has to be issued by the
District Magistrate or the Chief Judicial
Magistrate.
50. Section 165 of the Code deals with the
power of a police officer to search. Under
Section 165(1) he must have reasonable
grounds for believing that anything
necessary for the purpose of an
investigation into any offence, which he is
authorised to investigate, may be found in
any place within the limits of the police
station and that such thing cannot, in his
opinion, be otherwise obtained without undue
delay. He has to record the grounds of his
belief in writing and specify, so far as
possible, the thing for which search is
made. Section 166 refers to the question as
to when an officer in charge of a police
station may require another to issue search
warrant.
51. In the Income Tax Act, 1961 elaborate
provisions are made in regard to “search and
seizure” in Section 132; power to
requisition books of account, etc. in
Page 18 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
Section 132A;
power to call for information
as stated in Section 133. Section 133(6)
deals with power of officers to require any
bank to furnish any information as specified
there. There are safeguards. Section 132
uses the words “in consequence of
information in his possession, has reason to
believe”. (emphasis supplied) Section 132(1A)
uses the words “in consequence of
information in his possession, has reason to
suspect”. Section 132(13) says that the
provisions of the Code of Criminal
Procedure, relating to searches and seizure
shall apply, so far as may be, to searches
and seizures under Sections 132(1) and
132(1A).
There are also Rules made under
Section 132(14). Likewise Section 132A(
1)
uses the words “in consequence of
information in his possession, has reason to
believe”. (emphasis supplied) Section 133
which deals with the power to call for
information from banks and others uses the
words “for the purposes of this Act” and
Section 133(6) permits a requisition to be
sent to a bank or its officer. There are
other Central and State statutes dealing
with procedure for “search and seizure” for
the purposes of the respective statutes.”
8.1 It was submitted that “privacy” is a right
and that prolonged stay at the premises of the
petitioner was an invasion of the right to
privacy of the residents of such premises.
8.2 Reference was made to the decision of the
Supreme Court in the case of Income Tax Officer
v. Seth Brothers, (1969) 74 ITR 836 (SC), wherein
the court, in the context of section 132 of the
Page 19 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
Income Tax Act, 1961, has held that since by the
exercise of such power, a serious invasion is
made upon the rights, privacy and freedom of the
tax payer, the power must be exercised strictly
in accordance with law and only for the purposes
for which the law authorises it to be exercised.
8.3 Reliance was placed upon the decision of the
Allahabad High Court in the case of Dr. Nand Lal
Tahiliani v. Commissioner of Incometax,
(1988)
170 ITR 592 (Allahabad), wherein the court has
held that the dwelling house of a person is a
high fortress. Every householder, the good and
the bad, the guilty and the innocent, is entitled
to the protection designed to secure the common
interest against unlawful invasion of the house.
Ransacking of the house and the act of taking
away the property is an inroad on citizens’ right
of privacy, one of the values of civilization.
Any unwarranted intrusion of it cannot be
countenanced. Reasonable belief exists if the
information is not only trustworthy, but
reasonable and sufficient in itself to warrant
the conclusion that the provisions of section 132
were being violated. Because if the exercise of
power is bad or unlawful from its inception, then
it is not validated or changes character from its
success. It would not, therefore, be asking too
much from the authorities to comply with the
Page 20 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
basic requirements of the section before they are
permitted to invade the secrecy of one’s home.
8.4 The attention of the court was invited to the
provisions of section 132 of the Income Tax Act,
1961, to point out that clause (iia) of subsection
(1) thereof specifically permits search
of any person who has got out of, or is about to
get into, or is in the building or place, if the
authorised person has reason to suspect that such
person has secreted about his person any such
books of account, documents, money, bullion,
jewellery or other valuable article or thing, to
submit that there are no similar provisions in
the GST Acts, which permit search of a person.
Reference was made to clause (iib) of subsection
(1) of section 132 of the Income Tax Act, 1961,
which provides that the authorised officer may
require any person who is found to be in
possession or control of any books of account or
other documents maintained in the form of
electronic record, as defined in clause (f) of
subsection
(1) of section 2 of the Information
Technology Act, 2000, to afford the authorised
officer the necessary facility to inspect such
books of accounts or other documents, to submit
that there are no similar provisions under the
GST Acts.
Page 21 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
8.5 The learned amicus curiae submitted that
section 67 of the GST Acts, per se, does not
empower the authorised officer to record the
statement of any person, including the person in
whose name the authorisation has been issued. It
was submitted that rule 139 of the Central Goods
and Services Tax Rules, 2017 (hereinafter
referred to as “the CGST Rules”) and the
authorisation for inspection or search in FORM
GST INS1,
do not confer any such power on the
authorised officer under subsection
(2) of
section 67 of the GST Acts.
8.6 Next, it was submitted that the family
members of the dealer or person, whose premises
are searched, cannot be touched during the course
of search. It was contended that the provisions
of subsection
(2) of section 67 of the GST Acts
deal only with goods, documents, books or things
and do not confer any power on the authorised
officer to touch any other person present at the
searched premises, leave alone, take his phone
and copy it or use it.
8.7 Emphasis was laid on subsection
(4) of
section 132 of the Income Tax Act, 1961, to
submit that the same empowers the authorised
officer to examine on oath any person who is
found to be in possession or control of any books
Page 22 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
of accounts; whereas no such power is conferred
on the authorised officer under section 67 of the
GST Acts. It was submitted that under subsection
(2) of section 67 of the GST Acts, the authorised
officer does not have any power to record
statement/s of the person/s residing in the
premises inasmuch as this is not an inquiry or
investigation, but a search. Therefore, the
family members cannot be questioned about
anything.
8.8 It was further submitted that subsection
(2)
of section 67 of the GST Acts speaks of goods
liable to confiscation and documents or books or
things. The expression “books” is not defined in
the GST Acts, but finds place in subsection
(12A) of section 2 of the Income Tax Act, 1961
which says that “books or books of account”
includes ledgers, daybooks,
cash books, accountbooks
and other books, whether kept in the
written form or as printouts
of data stored in a
floppy, disc, tape or any other form of electromagnetic
data storage device. It was submitted
that, therefore, the expression “goods, documents
or things”, does not contemplate live things or
human beings and hence, the power of search is
restricted to four things, viz. goods liable to
confiscation, documents, books or things and that
none of the fiscal statutes even remotely
Page 23 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
contemplate search for a human being.
8.9 It was submitted that unless
specifically so authorised by the statute and the
authorisation, no power is conferred on the
search party to search a person. It was submitted
that section 70 of the GST Acts empowers the
proper officer to summon any person whose
attendance he considers necessary either to give
evidence or to produce a document or thing in any
inquiry in the same manner, as provided in the
case of a civil court under the provisions of the
Code of Civil Procedure, 1908. For issuing
summons, proper procedure must be followed by the
Department. Thus, in the absence of any summons
being issued under section 70 of the GST Acts, no
statement can be recorded under section 67 of the
GST Acts.
8.10 The attention of the court was invited
to the provisions of Order V of the Code of Civil
Procedure, which provides for issue and service
of summons as well as to the provisions of Order
XVI of the Code of Civil Procedure, which
provides for summoning and attendance of
witnesses, to submit that the same contemplate
reasonable time being provided to a person to
whom a summons is issued and hence, section 70 of
the GST Acts cannot be read with subsection
(2)
Page 24 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
of section 67 thereof and that both the powers
cannot be exercised concurrently.
8.11 It was pointed out that section 144 of
the GST Acts, which makes provision for
presumption as to documents in certain cases, is
in pari materia with subsection
(4A) of section
132 of the Income Tax Act, 1961. It was submitted
that accordingly, in the absence of any specific
provision empowering the authorized officer to
record statements and carry out investigation, no
powers can be conferred on a presumptive basis.
It was submitted that the family members of the
supplier / dealer are out of the purview of subsection
(2) of section 67 of the GST Acts, which
includes their mobile phones also.
8.12 Reference was made to subrule
(4) of
rule 112 of the Income Tax Rules, 1962, which
provides that if ingress into such building or
place cannot be so obtained, it shall be lawful
for the authorized officer executing the
authority, with such assistance of police
officers or of officers of the Central Government
or of both, as may be required, to enter such
building or place. It was submitted that,
therefore, assistance of police can be taken only
for the limited purpose of entry into the
premises.
Page 25 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
8.13 Lastly, it was submitted that a search
action is an invasion of the privacy of an
individual, and hence, search must be carried out
in a continuous manner and the Department cannot
carry out search action in bits and pieces as per
their convenience.
9. Mr. Mihir Thakore, learned counsel for the
respondent State authorities, submitted that the
right to privacy exists and is recognized under
article 21 of the Constitution of India and any
infringement of such right has to be supported by
a statutory provision. It was submitted that in
this case the overstay at the search premises was
because the search party was scrutinising the
phone calls recorded in the mobile phone of the
mother of the petitioner, as material relevant to
the search was contained therein. It was
submitted that under subsection
(2) of section
67 of the GST Acts, the authorized officer if he
has “reason to believe” that any goods,
documents, books or things are secreted in any
place, he can authorise any officer of central
tax/state tax, as the case may be, to search and
seize such goods, documents, books or things.
Accordingly, if the officer so authorised is of
the opinion that any information useful or
relevant to any proceedings under that Act is
Page 26 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
contained in a mobile phone, it is permissible
for him to look into its contents. It was
submitted that documents, books or things would
also include a mobile phone and that while a
person cannot be searched, anything that he has,
can certainly be seized and hence, there is no
infirmity in the action of the respondents in
seizing the mobile phone of the petitioner’s
mother and making a copy thereof.
9.1 Reference was made to the provisions of
section 144 of the GST Acts which reads thus:
144. Presumption as to documents in certain
cases.— Where any document—
(1) is produced by any person under this Act
or any other law for the time being in
force; or
(ii) has been seized from the custody or
control of any person under this Act or any
other law for the time being in force; or
(iii) has been received from any place
outside India in the course of any
proceedings under this Act or any other law
for the time being in force, and such
document is tendered by the prosecution in
evidence against him or any other person who
is tried jointly with him, the court shall—
(a) unless the contrary is proved by
such person, presume—
Page 27 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
(i) the truth of the contents of
such document;
(ii) that the signature and every
other part of such document which
purports to be in the handwriting of
any particular person or which the
court may reasonably assume to have
been signed by, or to be in the
handwriting of, any particular
person, is in that person’s
handwriting, and in the case of a
document executed or attested, that
it was executed or attested by the
person by whom it purports to have
been so executed or attested;
(b) admit the document in evidence
notwithstanding that it is not duly
stamped, if such document is otherwise
admissible in evidence.
It was submitted that subsection
(2) of
section of the GST Acts has to be read with
section 144(ii) thereof, and hence, a mobile
phone can certainly be seized from the custody or
control of any person present at the searched
premises. Accordingly, the authorised officer has
the power to seize a mobile phone, which would
not violate the right of privacy of the concerned
person.
9.2 It was further submitted that if during the
course of search, the authorised officer finds it
necessary to record the statement of any person
Page 28 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
present at the premises, it is permissible for
him to issue a summons under section 70 of the
GST Acts to such person in the searched premises
and record his/her statement accordingly. He,
however, admitted that once the search is over,
the search party has to leave the premises and
they cannot prolong their stay to find out a
person. It was urged that the action of the
concerned officers carrying out the search was
bona fide and the prolonged stay at the searched
premises was in the light of the previous
precedents. Moreover, the efforts of the
concerned officers during the course of their
continuous stay to find out where goods,
documents, books or things were secreted were
successful inasmuch as on the last day of the
search, they could obtain information from the
mobile phone regarding where the other documents,
books or things were secreted. Therefore, such
overstay has yielded results. It was,
accordingly, urged that a lenient view be taken
as regards the prolonged stay of the search party
at the premises of the petitioner.
10. Before adverting to the submissions made by
the learned counsel for the respondent
authorities and the learned amicus curiae as
referred to hereinabove, reference may be made to
certain facts, as averred in the affidavit dated
Page 29 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
24.10.2019 made by Shri Nathalal Maganlal
Chauhan, the father of the petitioner, who has
inter alia stated that the officers who had come
to their flat for search were inquiring about the
petitioner’s presence till late in the evening
and thereafter, the officers were replaced by
others. It is further stated that out of five
family members, three members were female,
whereas all the three officers, including the
Gunman, were male, who had stayed back forcibly
at their residential premise and such episode
continued till 18.10.2019. It is inter alia
stated that during the course of the day,
statements of the family members were recorded
and their mobile phones were checked from time to
time. It is further stated that during the course
of the eight days of search, the family members
were more or less confined to the house and were
not allowed to go anywhere without their
permission. Various other submissions have been
made, but it is not necessary to refer to the
same at this stage.
11. In the aforesaid backdrop, reference may be
made to the relevant statutory provisions. Subsection
(2) of section 67 of the GST Acts makes
provision for search of such place where the
proper officer, not below the rank of Joint
Commissioner, has reason to believe that any
Page 30 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
goods liable to confiscation or any documents or
books or things, which, in his opinion, shall be
useful for or relevant to any proceedings under
the Act, are secreted. On forming such belief,
the proper officer may authorise in writing any
other officer of central tax/state tax to search
and seize or may himself search and seize such
goods, documents or books or things. Under subsection
(2) of section 67, the proper officer
authorises an officer of central tax/state tax to
search the premises and seize goods, documents,
books or things. Subsection
(4) of section 67
empowers the officer so authorised to seal or
break open the door of any premises or to break
open any almirah, electronic devices, box,
receptacle in which any goods, accounts,
registers or documents of the person are
suspected to be concealed. Subsection
(10) of
section 67 makes the provisions of the Code of
Criminal Procedure, 1973, relating to search and
seizure, so far as may be, applicable to search
and seizure under that section subject to the
modification that subsection
(5) of section 165
of the Code shall have effect as if for the word
“Magistrate”, wherever it occurs, the word
“Commissioner” were substituted.
12. The provisions relating to search and seizure
insofar as the same are relevant for the purposes
Page 31 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
of section 67 of the GST Acts are contained in
sections 93, 94, 99, 100, 102, 103 and 165 of the
Code, which read as under:
“93. When search warrant may be issued.—
(1)(a) Where any Court has reason to believe
that a person to whom a summons or order
under section 91 or a requisition under subsection
(1) of section 92 has been, or might
be, addressed, will not or would not produce
the document or thing as required by such
summons or requisition, or
(b) where such document or thing is not
known to the Court to be in the possession
of any person, or
(c) where the Court considers that the
purposes of any inquiry, trial or other
proceeding under this Code will be served by
a general search or inspection, it may issue
a search warrant; and the person to whom
such warrant is directed, may search or
inspect in accordance therewith and the
provisions hereinafter contained.
(2) The Court may, if it thinks fit, specify
in the warrant the particular place or part
thereof to which only the search or
inspection shall extend; and the person
charged with the execution of such warrant
shall then search or inspect only the place
or part so specified.
(3) Nothing contained in this section shall
authorise any Magistrate other than a
District Magistrate or Chief Judicial
Magistrate to grant a warrant to search for
a document, parcel or other thing in the
custody of the postal or telegraph
Page 32 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
authority.”
“94. Search of place suspected to contain
stolen property, forged documents, etc.—
(1) If a District Magistrate, SubDivisional
Magistrate or Magistrate of the first class,
upon information and after such inquiry as
he thinks necessary, has reason to believe
that any place is used for the deposit or
sale of stolen property, or for the deposit,
sale or production of any objectionable
article to which this section applies, or
that any such objectionable article is
deposited in any place, he may by warrant
authorise any police officer above the rank
of a constable—
(a) to enter, with such assistance as may be
required, such place,
(b) to search the same in the manner
specified in the warrant,
(c) to take possession of any property or
article therein found which he reasonably
suspects to be stolen property or
objectionable article to which this section
applies,
(d) to convey such property or article
before a Magistrate, or to guard the same on
the spot until the offender is taken before
a Magistrate, or otherwise to dispose of it
in some place of safety,
(e) to take into custody and carry before a
Magistrate every person found in such place
who appears to have been privy to the
deposit, sale or production of any such
property or article knowing or having
reasonable cause to suspect it to be stolen
Page 33 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
property or, as the case may be,
objectionable article to which this section
applies.
(2) The objectionable articles to which this
section applies are—
(a) counterfeit coin;
(b) pieces of metal made in contravention of
the Metal Tokens Act, 1889 (1 of 1889), or
brought into India in contravention of any
notification for the time being in force
under Section 11 of the Customs Act, 1962
(52 of 1962);
(c) counterfeit currency note; counterfeit
stamps;
(d) forged documents;
(e) false seals;
(f) obscene objects referred to in Section
292 of the Indian Penal Code (45 of 1860);
(g) instruments or materials used for the
production of any of the articles mentioned
in clauses (a) to (f).”
“99. Direction, etc., of search warrants.—
The provisions of Sections 38, 70, 72, 74,
77, 78 and 79 shall, so far as may be, apply
to all search warrants issued under Section
93, Section 94, Section 95 or Section 97.”
“100. Persons in charge of closed place to
allow search.—
(1) Whenever any place liable to search or
inspection under this Chapter is closed, any
Page 34 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
person residing in, or being in charge of,
such place, shall, on demand of the officer
or other person executing the warrant, and
on production of the warrant, allow him free
ingress thereto, and afford all reasonable
facilities for a search therein.
(2) If ingress into such place cannot be so
obtained, the officer or other person
executing the warrant may proceed in the
manner provided by subsection
(2) of
Section 47.
(3) Where any person in or about such place
is reasonably suspected of concealing about
his person any article for which search
should be made, such person may be searched
and if such person is a woman, the search
shall be made by another woman with strict
regard to decency.
(4) Before making a search under this
Chapter, the officer or other person about
to make it shall call upon two or more
independent and respectable inhabitants of
the locality in which the place to be
searched is situate or of any other locality
if no such inhabitant of the said locality
is available or is willing to be a witness
to the search, to attend and witness the
search and may issue an order in writing to
them or any of them so to do.
(5) The search shall be made in their
presence, and a list of all things seized in
the course of such search and of the places
in which they are respectively found shall
be prepared by such officer or other person
and signed by such witnesses; but no person
witnessing a search under this section shall
be required to attend the Court as a witness
of the search unless specially summoned by
Page 35 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
it.
(6) The occupant of the place searched, or
some person in his behalf, shall, in every
instance, be permitted to attend during the
search, and a copy of the list prepared
under this section, signed by the said
witnesses, shall be delivered to such
occupant or person.
(7) When any person is searched under subsection
(3), a list of all things taken
possession of shall be prepared, and a copy
thereof shall be delivered to such person.
(8) Any person who, without reasonable
cause, refuses or neglects to attend and
witness a search under this section, when
called upon to do so by an order in writing
delivered or tendered to him, shall be
deemed to have committed an offence under
Section 187 of the Indian Penal Code (45 of
1860).”
“102. Power of police officer to seize
certain property.—
(1) Any police officer may seize any
property which may be alleged or suspected
to have been stolen, or which may be found
under circumstances which create suspicion
of the commission of any offence.
(2) Such police officer, if subordinate to
the officer in charge of a police station,
shall forthwith report the seizure to that
officer.
(3) Every police officer acting under subsection
(1) shall forthwith report the
seizure to the Magistrate having
jurisdiction and where the property seized
Page 36 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
is such that it cannot be conveniently
transported to the Court or where there is
difficulty in securing proper accommodation
for the custody of such property, or where
the continued retention of the property in
police custody may not be considered
necessary for the purpose of investigation,
he may give custody thereof to any person on
his executing a bond undertaking to produce
the property before the Court as and when
required and to give effect to the further
orders of the Court as to the disposal of
the same:
Provided that where the property seized
under subsection
(1) is subject to speedy
and natural decay and if the person entitled
to the possession of such property is
unknown or absent and the value of such
property is less than five hundred rupees,
it may forthwith be sold by auction under
the orders of the Superintendent of Police
and the provisions of Sections 457 and 458
shall, as nearly as may be practicable,
apply to the net proceeds of such sale.”
“103. Magistrate may direct search in his
presence.—
Any Magistrate may direct a search to be
made in his presence of any place for the
search of which he is competent to issue a
search warrant.”
“165. Search by police officer.—
(1) Whenever an officer in charge of a
police station or a police officer making an
investigation has reasonable grounds for
believing that anything necessary for the
purposes of an investigation into any
offence which he is authorised to
investigate may be found in any place within
the limits of the police station of which he
Page 37 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
is in charge, or to which he is attached,
and that such thing cannot in his opinion be
otherwise obtained without undue delay, such
officer may, after recording in writing the
grounds of his belief and specifying in such
writing, so far as possible, the thing for
which search is to be made, search, or cause
search to be made, for such thing in any
place within the limits of such station.
(2) A police officer proceeding under subsection
(1), shall, if practicable, conduct
the search in person.
(3) If he is unable to conduct the search in
person, and there is no other person
competent to make the search present at the
time, he may, after recording in writing his
reasons for so doing, require any officer
subordinate to him to make the search, and
he shall deliver to such subordinate officer
an order in writing, specifying the place to
be searched, and so far as possible, the
thing for which search is to be made; and
such subordinate officer may thereupon
search for such thing in such place.
(4) The provisions of this Code as to search
warrants and the general provisions as to
searches contained in section 100 shall, so
far as may be, apply to a search made under
this section.
(5) Copies of any record made under subsection
(1) or subsection
(3) shall
forthwith be sent to the nearest Magistrate
empowered to take cognizance of the offence,
and the owner or occupier of the place
searched shall, on application, be
furnished, free of cost, with a copy of the
same by the Magistrate.”
Page 38 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
13. Sections 93 and 94 of the Code are more or
less similar to subsection
(2) of section 67 of
the GST Acts and provide for the contingencies
when a search warrant can be issued and the scope
of powers of search and seizure. Section 95
relates to powers of search in case of the
specific instances set out therein. Section 100
of the Code casts an obligation upon the persons
in charge of a closed space to allow search. Subsection
(3) of section 100 provides that where
any person in or about such place is reasonably
suspected of concealing about his person any
article for which search should be made, such
person may be searched and if such person is a
woman, the search shall be made by another woman
with strict regard to decency. Thus, for this
limited purpose, search of a person is permitted
under subsection
(3) of section 100 of the Code.
14. Chapter XVII of the GST Rules bears the
heading – “Inspection, Search and Seizure” and is
comprised of rules 139 to 141, which read as
under:
“139. Inspection, search and seizure.33.
Where the proper officer not below the
rank of a Joint Commissioner has reasons to
believe that a place of business or any
other place is to be visited for the
Page 39 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
purposes of inspection or search or, as the
case may be, seizure in accordance with the
provisions of section 67, he shall issue an
authorisation in FORM GST INS01
authorising
any other officer subordinate to him to
conduct the inspection or search or, as the
case may be, seizure of goods, documents,
books or things liable to confiscation.
(2) Where any goods, documents, books or
things are liable for seizure under subsection
(2) of section 67, the proper
officer or an authorised officer shall make
an order of seizure in FORM GST INS02.
(3) The proper officer or an authorised
officer may entrust upon the owner or the
custodian of goods, from whose custody such
goods or things are seized, the custody of
such goods or things for safe upkeep and the
said person shall not remove, part with, or
otherwise deal with the goods or things
except with the previous permission of such
officer.
(4) Where it is not practicable to seize any
such goods, the proper officer or the
authorised officer may serve on the owner or
the custodian of the goods, an order of
prohibition in FORM GST INS03
that he shall
not remove, part with, or otherwise deal
with the goods except with the previous
permission of such officer.
(5) The officer seizing the goods,
documents, books or things shall prepare an
inventory of such goods or documents or
books or things containing, inter alia,
description, quantity or unit, make, mark or
model, where applicable, and get it signed
by the person from whom such goods or
documents or books or things are seized.
Page 40 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
140. Bond and security for release of seized
goods.(
1) The seized goods may be released on a
provisional basis upon execution of a bond
for the value of the goods in FORM GST INS04
and furnishing of a security in the form
of a bank guarantee equivalent to the amount
of applicable tax, interest and penalty
payable.
Explanation.For
the purposes of the rules
under the provisions of this Chapter, the
applicable tax shall ― ‖ include central tax
and State tax or central tax and the Union
territory tax, as the case may be and the
cess, if any, payable under the Goods and
Services Tax (Compensation to States) Act,
2017 (15 of 2017).
(2) In case the person to whom the goods
were released provisionally fails to produce
the goods at the appointed date and place
indicated by the proper officer, the
security shall be encashed and adjusted
against the tax, interest and penalty and
fine, if any, payable in respect of such
goods.
141. Procedure in respect of seized goods.(
1) Where the goods or things seized are of
perishable or hazardous nature, and if the
taxable person pays an amount equivalent to
the market price of such goods or things or
the amount of tax, interest and penalty that
is or may become payable by the taxable
person, whichever is lower, such goods or,
as the case may be, things shall be released
forthwith, by an order in FORM GST INS05,
on proof of payment.
(2) Where the taxable person fails to pay
the amount referred to in subrule
(1) in
respect of the said goods or things, the
Page 41 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
Commissioner may dispose of such goods or
things and the amount realized thereby shall
be adjusted against the tax, interest,
penalty, or any other amount payable in
respect of such goods or things.”
15. Considering the provisions referred to
hereinabove, it is apparent that the officer who
is armed with a search warrant is authorised to
search the premises referred to in the warrant of
authorisation and to seize goods, documents,
articles or things, which are useful for or
relevant to any proceedings under the GST Acts.
The provisions nowhere arm the officer, in whose
favour the authorisation is issued, to search for
any person or to remain in the premises after the
search is over, or to monitor what the persons
residing in the premises are doing and to reside
in the premises. In fact, no provision under the
Code permits even the Investigating Officer to
continuously stay inside the residential premises
to apprehend an accused as and when he returns
home. The powers vested in the officer armed with
a search warrant are limited to searching the
entire premises. Once the premises are searched,
the search party would have to leave the premises
and cannot wait there indefinitely for days on
end under the expectation that the person whom
they are searching for may return home or may
contact his family members.
Page 42 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
16. In the facts of the present case, the
authorised officer was authorised to search only
the premises. The nature of the search conducted
by him is discernible from the panchnama of the
search proceedings drawn by the authorised
officer in the presence of panchas, a copy
whereof has been produced for the perusal of this
court. In terms of the panchnama, on 11.10.2019,
in the afternoon, the officers searched the
residential premises of the petitioner; and the
books of accounts and other documents which they
found were brought to the main room, which
included the bank passbooks
and cheque books,
etc. of the family members. At about 4:02 pm, the
officers asked the parents of the petitioner to
present the petitioner; whereupon they had made a
phone call to him and stated that he was not
picking up the phone. Thereafter, they recorded
statements of the parents of the petitioner in
questionanswer
form. It is recorded in the
panchnama that at 4:45 pm, upon asking the mother
of the dealer (petitioner) to keep the dealer
present and upon making her to listen the
recording of her phone call, she behaved in an
inappropriate way and said that every mother lies
to protect her son and that even if she lies,
what is wrong with it. It is further recorded
that the dealer’s mother, in his presence as well
Page 43 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
as in the presence of panchas and officers, said
that every person sitting there must have done
something wrong. Thus, the dealer’s mother
conduct was uncooperative. At 5:14 pm it is
recorded that Alpesh Wadher of Hollywood Shoes
having remained present, a team with one officer
and panchas set off to the dealer’s shop for
investigation. At 6:10 pm, it is recorded that
the officer along with the panchas returned and
they had brought along with them passbooks
related to the bank and Shri H.T. Barad an
officer of the office was informed about the
documents which were found there. It is further
recorded that an expert was called to obtain a
mirror image of the calls made from the phone of
the petitioner’s mother, which was found at the
said premises and a master copy thereof was
prepared in a Sandisk Pen Drive 16 GB, which was
sealed in the presence of panchas and a working
copy was made in a pen drive. At 7:10 pm it is
recorded that the petitioner’s father and mother
informed that they wanted to visit a friend of
their son in case they can get any information
from there and hence, they had asked permission
to go there and hence, they had taken the
petitioner’s daughter and panchas with them and
gone near Jivraj Park where her maternal uncle
(maternal aunt’s husband) Hareshbhai Vandhra was
residing and he informed that on that day in the
Page 44 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
morning at 9:00 am, Pareshbhai Chauhan had come
to him to take a bag which he had given.
Thereafter, he did not have any contact with him
and if he is able to contact him in any manner,
he would try to bring him home. At 8:05 pm, it is
recorded that during the course of search for the
dealer, the dealer’s mother was not feeling well
and had stated that on account of tension her
entire body was aching and hence, they had
informed an officer there to take her to the
hospital along with panchas, whereupon she had
refused to go and had said that she was worried
that her son may take a wrong step. At 8:45 pm it
is recorded that at the dealer’s place the
statement of his mother in question – answer
form and the statement in question – answer form
of Alpesh Wadher who was running Hollywood shoes
was recorded. [Thus, despite the fact that the
petitioner’s mother, an elderly lady, was
suffering from ill health at 8:05 pm, her
statement came to be recorded by 8:45 pm.] At
9:35 pm it is recorded that another officer came
to relieve the officer who was present at the
premises and he was acquainted with the
proceedings conducted throughout the day and was
told that in case the dealer comes at night, his
statement should be recorded.
16.1 At 9:15 on the next morning, it is recorded
Page 45 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
that at night, the family members again tried to
contact the dealer on his mobile phone, but his
phone was found to be switched off. Thereafter,
the family members were again interrogated for
some time and later, they were allowed to go to
sleep. It is further recorded that on the next
day, at 7:00 am, the son had gone to school.
[Thus, it appears that even after 9:35 at night
the family members of the petitioner were
interrogated.]
16.2 At 10:05, it is recorded that the
Investigating Officer of the earlier day having
returned and having relieved the panchas and
officer R.B Dodiya, the new officer and panchas
have arrived at the spot. At 01:55 pm, it is
recorded that during the course of search, they
recorded the statements of the dealer’s wife
Shrimati Mamtaben and her daughter Honey in
questionanswer
form and asked them as to where
the dealer was and as to whether they had any
news about him. However, they had informed that
till then, they had no news about the dealer. At
8:05 pm, it is recorded that after resting his
(the petitioner’s) father’s statement was
recorded in question – answer form. Moreover
during the said search different officers has
recorded statements of Pareshbhai’s father
Nathalal Chauhan in question – answer form and
Page 46 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
had questioned him as to where the Pareshbhai
was; and different officers had recorded
statements of the Pareshbhai’s wife, his
mother/father and inquired as to whether or not
they had any talk with the Pareshbhai and upon
Officer Shri B.H. Modi arriving to relieve them,
the officers of that morning as well as the
panchas were being relieved and the charge of the
search was handed over to the new officer. It is
further recorded that at night, the family
members of the dealer again tried to contact the
dealer via mobile phone, but the dealer’s phone
appeared to be switchedoff.
Thereafter, after
some interrogation, as they needed to rest at
night they had gone to sleep. [Thus, the family
members were interrogated even at night time.]
16.3 On 13.10.2019, at 12:55 pm, it is
recorded that the officers who were present at
night were relieved and the daytime
officer took
charge. It is further recorded that they had
offered personal search of those officers to
Pareshbhai’s mother and father, but they had not
accepted such offer and upon asking them as to
whether they had received any news about
Pareshbhai at night, they had informed that they
did not have any news. At 2:10 pm, it is recorded
that the family was permitted to rest postlunch.
At 3:25 pm, it is recorded that the Pareshbhai’s
Page 47 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
father’s medicines were finished and hence an
inspector was sent with him to purchase the
medicines. At 6:10 pm, it is recorded that
Pareshbhai’s wife and daughter Honey had gone to
the market in the presence of panchas to fetch
vegetables and clothes given for ironing and had
returned in half an hour along with those things.
At 6:30 pm, it is recorded that upon asking the
Pareshbhai’s family members as to whether there
was any news about him, but they had said that no
information was received. Thereafter, without
recording the time, it is recorded that another
officer A.B. Parmar had arrived to relieve the
officer who was at the spot during daytime and
the charge was handed over to him. At 10:30 pm,
it is recorded that the dealer’s mother sought
permission to go downstairs,
and she was
permitted to go and she returned after 15 minutes
with vegetables (potatoes). It is further
recorded that she had become emotional about her
son and hence, they consoled her and explained to
her that this is part of a Government inquiry and
after pacifying her, advised her to rest
peacefully.
16.4 On 14.10.2019, it is recorded that the
dealer’s father sought permission to go downstairs
to fetch milk and such permission was
granted. At 8:45 am, the dealer’s mother sought
Page 48 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
permission to go to the temple and such
permission was granted. At 10:45 am, the dealer’s
mother sought permission to go to some place for
returning the clothes brought for Navratri
celebrations, which was granted and she returned
after 15 minutes. It is recorded that on
14.10.2019, the Investigating Officer Shri Rabari
had presented himself and had taken charge of the
proceedings.
16.5 The proceedings of the other days are
similar in nature and do not reflect search of
any kind having been carried out, but show that
the officers have remained in the house and have
kept surveillance over the members of the house.
All that is recorded is when, where, why, at what
time and for how long any family member went out
of the premises and that time and again the
family members were asked as to whether they had
any information about the petitioner. It also
appears that every time when a family member left
the premises, he/ she was required to inform the
concerned officer the reason why he/she wanted to
go out and such member was required to take the
permission of the officer concerned. Several
times, it has been recorded that liquor bottles
were found at the premises during the course of
search and that the family members were
interrogated in respect of the same and as to
Page 49 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
whether they had a permit to keep such liquor
bottles and the fact regarding Anandnagar Police
Station being informed about the same and
recording of an offence by the Police Station and
the action taken by it etc.
16.6 On 17.10.2019 at 11:10 am it is recorded
that the officers who were present at the
premises at night are relieved and the daytime
officer has taken charge. It is further recorded
that upon asking the family members of Pareshbhai
as to whether they had any news about him, they
had said that they did not have any news about
him and upon the request of Pareshbhai’s family
members, his mother was permitted to go to the
temple and his daughter was permitted to go for
her job. At 12:30 pm (presumably in the afternoon
of 18.10.2019) it is recorded that night time
officer of 17.10.2019 has been relieved and the
day time officer has taken charge.
16.7 On a perusal of the contents of the
panchnama, it is evident that during the time the
officers were present in the premises, the
movements of the family members were restricted
and they were required to take permission of the
officers concerned if they had to go out of the
house. The family members, including female
members, have been interrogated even during night
Page 50 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
hours, and there is nothing in the panchnamas, to
show the presence of any female officer during
the night time. Moreover, on each day, in the
morning shift and night shift, there were two
different panchas from different localities
residing in the premises and it also appears that
an SRP constable was also present throughout.
Thus, the family members of the petitioner were
constrained to put up with different sets of
strangers in their residential premises
throughout the day and night for eight days.
16.8 While it is an admitted position that
the officers along with the panchas and the SRP
constable were inside the residential premises
during the course of the entire search, in the
entire panchnama, there is no mention as to what
the officers and panchas and SRP constable did
inside the residential premises of the petitioner
throughout the day, except for having recorded
the statements of the family members of the
petitioner at different times of the day. Nothing
is stated as regards where the members of the
search party stayed during the course of the day
and where they slept at night.
16.9 It may be noted that on 18.10.2019, this
court passed an order in the following terms:
Page 51 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
“Mr. Chetan Pandya, learned advocate for the
petitioner has vehemently assailed the action
of the respondents by submitting that the
officers of the respondents have camped
inside the house of the petitioner since
11.10.2019 wherein his family members are
residing and that the family members of the
petitioner are virtually under house arrest.
Issue notice returnable on 21st October, 2019.
Direct service is permitted today.”
16.10 Thereafter, on 18.10.2019, at 4:30 pm,
it is recorded that at the site upon hearing the
recording from the mobile phone of Pareshbhai’s
mother, in her recording (7.10.2010, 6:52 pm) of
4 minutes 13 seconds it could be heard that the
office record was kept at Harishbhai’s house,
after which it was transferred to the house next
door where a single person was residing which was
being said by his wife, and his mother was saying
that the record which was inside the house was
kept at Munni’s house (Pinkyben Gohil). Hence,
officer A. L. Rabari obtained summons and went to
the said place to record statement.At 5:20, it is
recorded that at the search place, as
Pareshbhai’s wife was required to go to fetch
vegetables and get the grains ground at the flour
mill, with the consent of the officer she was
given permission to fetch such things and she had
Page 52 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
gone and returned in 0:45 minutes (time 5:20
pm.). Lastly, at 7:40 it is recorded that upon
the officer of the search premises Shri A. L.
Rabari returning from the said place along with
one panch whom he had taken, he had informed that
he had gone with a summons to the address – 102,
Mira Madhav Apartment, First Floor, in the lane
of Ashapura Mataji Temple, Vejalpur, Ahmedabad to
Hareshbhai Vandra’s place and after serving
summons on him it was explained to him and his
statement was recorded and he was made to hear
the recording found at the searched place in the
context of which he had stated that the books of
account were kept in the house next door to the
office, which was informed to the higher officer
and after obtaining a warrant from the head
office they had come to that place and after
showing them the said documents they had returned
(time 7:40 pm).
16.11 It is further recorded that after coming
to the searched place, upon asking the family
members of Pareshbhai Chauhan as to whether they
had received any news about Pareshbhai, they had
stated that till then they had not received any
news about him. Since the books of accounts of
Pareshbhai Chauhan’s office were found from some
other place, the higher officer was informed
about it. The intention behind staying at that
Page 53 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
place and searching the place was that Pareshbhai
remains present and produces the books of
accounts. Out of which, a part of his accounting
record having been found from some other place,
the higher officer was informed and after
recording the last statement of Pareshbhai
Chauhan’s father Nathabhai Chauhan, the search of
the residential premises was completed at 9:15
hours at night.
17. This, in sum and substance is the nature of
the proceedings conducted by the respondents from
11.10.2019 to 18.10.2019 at the residential
premises of the petitioner.
18. The entire action of the search party after
the first day, i.e. from 12.10.2019 to
18.10.2019, was, therefore, illegal, invalid and
not backed by any provision of the GST Acts.
Moreover, it is only after this court issued
notice on 18.10.2019, that the search was brought
to an end on the ground that from the recording
of the petitioner’s mother of 7.10.2019, they
could find out the place where certain accounting
record was secreted. In this regard, it may be
noted that from the contents of panchnama of the
search proceedings as recorded hereinabove, it is
apparent that the authorised officer on day one
of the search itself, that is on 11.10.2019, had
Page 54 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
got a mirror copy of the data contained in the
mobile phone of the petitioner’s mother copied in
a pen drive which was sealed in the presence of
panchas and a working copy thereof was also made
in a pen drive. Therefore, the details contained
in the mobile phone of the petitioner’s mother
were already available with the respondents. For
the purpose of hearing what was recorded therein,
there was no necessity of staying at the searched
premises. Moreover, from the contents of the
panchnama, there is nothing whatsoever to
indicate that at any point of time any member of
the search party or the authorised officer was
hearing the recording. The only reason why the
search party remained back appears to be to
intimidate the family members of the petitioner
to extract information about the petitioner or
records of his business, and to either coerce the
petitioner to return home or to apprehend him if
he returns home.
19. From the facts recorded in the panchnama, it
is abundantly clear that while the authorisation
issued to the officer concerned was to search the
premises mentioned in the authorisation, the
entire search was converted to a search for the
dealer, namely the petitioner herein. One
relevant fact which is to be kept in mind in this
context is that, admittedly, no summons was
Page 55 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
issued to the petitioner under section 70 of the
GST Acts nor is it the case of the respondents
that he was summoned, but had not remained
present. While the petitioner was not present at
the premises when searched, there could be a
reasonable explanation for his absence. Moreover,
even if the petitioner may have been
intentionally avoiding the authorities, the same
is not a valid ground for converting the search
proceedings to a search for the petitioner, more
so, when no such power is vested in the
authorities.
20. Moreover, as is evident from the contents of
the panchnama, the members of the petitioner’s
family were literally under house arrest and were
not permitted to leave the premises without the
permission of the authorised officer and at times
without being escorted by a member of the search
party. It may be noted that there is no provision
under the GST Acts which empowers the authorised
officer to confine family members of a dealer in
this manner and to interrogate them at all times
of the day and even late at night as has been
done in this case. Even the elderly lady was not
spared and despite not being well was
interrogated at night, that too, without any such
powers being vested in the authorised officer. As
rightly pointed out by the learned amicus curiae,
Page 56 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
the only power to record statements is traceable
to section 70 of the GST Acts which requires the
concerned officer to issue summons to the person
whose statement is sought to be recorded by
following due procedure in accordance with law,
and thereafter record his statement. But in this
case all statutory requirements are thrown to the
winds and in flagrant violation of the powers
vested in them, the concerned officers have
resided in the residential premises of the
petitioner for eight days and confined and
intimidated his family members. Thus, apart from
the illegality of the continuation of the search
proceedings, the conduct of the search officers
in confining the family members of the petitioner
to the house and of interrogating them time and
again is nothing but a blatant abuse of powers.
Since, the continued stay at the premises of the
petitioner after 11th October, 2019 was not for
search of the premises but to search for the
petitioner and to obtain further information
about where else he could have secreted
documents, books or things relevant for any
proceedings under the GST Acts, such continued
stay was totally unauthorised as it was not
backed by any statutory provision. As discussed
hereinabove, the powers conferred by subsection
(2) of section 67 of the GST Acts is to search
for goods liable to confiscation, documents,
Page 57 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
books or things which in the opinion of the
proper officer shall be useful for or relevant to
any proceedings under that Act.
21. From the contents of the panchnama as
referred to hereinabove, it is evident that the
concerned officers remained at the residential
premises of the petitioner with a view to extort
confessions from the family members of the
petitioner regarding the presence of the
petitioner and the place where the petitioner
might have secreted the documents regarding his
business dealings. Section 348 of the Indian
Penal Code provides that whoever wrongfully
confines any person for the purpose of extorting
from the person confined or any person interested
in the person confined, any confession or any
information which may lead to the detection of an
offence or misconduct or for the purpose of
constraining the person confined or any person
interested in the person confined to restore or
to cause the restoration of any property or
valuable security or to satisfy any claim or
demand or to give information which may lead to
the restoration of any property or valuable
security, shall be punished with imprisonment of
either description for a term which may extend to
three years and shall also be liable to fine. In
the present case, it appears that the respondent
Page 58 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
authorities had wrongfully confined the family
members of the petitioner in the residential
premises with a view to extort information from
them about the whereabouts of the petitioners or
the place where he might have secreted documents
relevant for any proceedings under the GST Acts.
Thus, the unauthorised action of the concerned
officers may tantamount to an offence under the
Indian Penal Code. In the opinion of this court
what is not permissible in law cannot be done
under the guise of discharge of statutory
functions. The plea that the concerned officers
were acting on the basis of past precedent also
appears to be a specious plea, inasmuch as, even
under the previous enactments such action was not
permissible. Besides, no instance has been
pointed out to show that at any point of time, a
search case was converted to a search for a
person and the officers concerned resided in
residential premises of a dealer in the manner
that has been done in this case. The action of
the respondents, therefore, cannot be
countenanced.
22. Besides, the GST Acts are new enactments.
Officers acting under the relevant provisions are
required to study the scope of their powers under
the statutory provisions under which they are
acting and cannot act on the basis of
Page 59 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
presumptions or past precedents under a previous
enactment. If the common man is supposed to know
the law and face penalty for any infraction
thereof, the officers enforcing such provisions
are required to be well versed with the statutory
provisions and the scope and limits of their
power and cannot take shelter behind ignorance of
law to justify their illegal actions.
23. As noticed earlier, it has come on record
that throughout the search, an SRP constable was
present in the residential premises of the
petitioner. As pointed out by learned amicus
curiae, the assistance of the police can be taken
for the purpose of entry into the premises if
there is some reason to believe that there may be
any kind of obstruction in conducting the search.
In the present case, there is nothing on record
to indicate that there was any resistance by the
family members during the course of search
warranting the presence of an SRP constable
during the entire search proceedings. Therefore,
it appears that the idea behind taking assistance
of the SRP constable appears to be to intimidate
and shame the family members, more so, in view of
the prolonged presence of the search party at the
residential premises of the petitioner. On behalf
of the respondents, it has been stated that the
officers concerned had asked the SRP constable to
Page 60 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
stand outside the premises, but it was the
petitioner’s father who requested that he may
remain inside the premises. In the report dated
19.11.2019 submitted by the Chief Commissioner of
State Tax, it has been stated that “From the
statement of SRP Constable Shri Savansinh Dabhi
it is seen that on very first day SRP Jawan was
requested by Nathalal Chauhan, father of the
petitioner to stay within the residence as his
staying outside the residence gate will give
impression to their neighbours and will tarnish
their image.” It cannot be gainsaid that
presence of a person in uniform outside the house
throughout the day, more so, when the family
members of the petitioner were literally under
house arrest, would cause a loss of reputation
and raise many questions in the neighbourhood. It
would be with a view to salvage their prestige
and reputation that the petitioner’s father would
have made a request that such person remain
inside the house rather than outside. It may be
noted that even the police, during the course of
investigation, do not have the powers to reside
at any residential premise and the officer
concerned is required to carry out investigation
and thereafter, leave the premises. The action of
the respondents in continuing to reside at the
residential premises of the petitioner without
any valid reason despite the fact that search was
Page 61 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
concluded is unwarranted and uncalled for. It may
be that ultimately, the respondents might have
been able to extract some material from the
conversation recorded in the mobile phone
regarding where some books of account and other
documents were secreted, but the end does not
justify the means and does not validate the
unauthorised and illegal action of the concerned
officers. The Allahabad High Court in Dr. Nand
Lal Tahiliani v. Commissioner of Incometax
(supra) has held that the dwelling house of a
person is a high fortress. Every householder, the
good and the bad, the guilty and the innocent, is
entitled to the protection designed to secure the
common interest against unlawful invasion of the
house. Ransacking of the house and the act of
taking away the property is an inroad on
citizens’ right of privacy, one of the values of
civilization. Any unwarranted intrusion of it
cannot be countenanced. Reasonable belief exists
if the information is not only trustworthy, but
reasonable and sufficient in itself to warrant
the conclusion that the provisions of section 132
were being violated. Because if the exercise of
power is bad or unlawful from its inception, then
it is not validated or changes character from its
success. It would not, therefore, be asking too
much from the authorities to comply with the
basic requirements of the section before they are
Page 62 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
permitted to invade the secrecy of one’s home.
24. At this juncture, reference may be made to
the report dated 19.12.2019, that came to
ultimately be submitted by the Chief Commissioner
of State Tax pursuant to the directions issued by
this court vide order dated 25.10.2019. The
relevant extracts whereof are reproduced
hereunder:
“Prior to 01/07/2017, the search and seizure
proceedings were carried out under the
provisions of Section 67 of the Gujarat
Value Added Tax Act, 2003. As per the
provisions of section 67(7), the provisions
of the Code of Criminal Procedure, 1973
relating to search are applicable to the
search proceedings under the Gujarat Value
Added Tax Act, 2003. As per section 88 of
the said Act, the Commissioner is empowered
to authorise any officer or person
subordinate to him to investigate offences
and can exercise the power conferred by the
Code of Criminal Procedure, 1973. The
provision of section 88 of the said Act is
reproduced below.
“(1) Subject to such conditions as may
be prescribed, the Commissioner may
Page 63 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
authorise either generally or in respect
of a particular case or class of cases
any officer or person subordinate to him
to investigate all or any of the
offences punishable under this Act.
(2) Every officer or person so
authorised shall in the conduct of such
investigation, exercise the powers
conferred by the Code of Criminal
Procedure, 1973 upon an officer incharge
of a police station for the
investigation of a cognizable offence.”
In view of the above, search, seizure
and investigation proceedings were carried
out under the provisions of Section 67(4)(5)
(7) and Section 88 of the said Act read with
the relevant provisions relating to search
and investigation of Code of Criminal
Procedure, 1973. Hence, accordingly under
the VAT regime, the investigation was
carried out and statement of witnesses were
recorded during the search proceedings. The
departmental authorities continued in that
belief after implementation of the Gujarat
Goods and Services Tax Act – 2007 and have
been recording statements of concerned
person during the course of search and
seizure proceedings. The reasons for such
continuation of that belief is also that
under the Gujarat Value Added Tax Act, 2003,
Page 64 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
search, seizure and investigation can be
initiated even today in respect of certain
commodities still covered under the Gujarat
Value Added Tax Act, 2003 as well as for pre
01/07/2017 transactions.
After introduction of the Gujarat Goods
and Services Tax Act 2017,
the department
had carried out search and seizure
proceedings in number of cases under the
Gujarat Goods and Services Tax Act – 2017 in
exercise of the power conferred under
section 67 of the said Act till date. As per
the provisions of section 67(1) of the
Gujarat Goods and Services Tax Act – 2017,
the provisions of the Code of Criminal
Procedure, 1973, relating to search and
seizure, apply to search and seizure under
the said Section. For the sake of
convenience section 67(10) of the Gujarat
Goods and Services Tax Act – 2017 is
reproduced here in below.
“The provisions of the Code of Criminal
Procedure, 1973, (2 of 1974) relating to
search and seizure, shall, so far as may
be, apply to search and seizure under
this section subject to the modification
that subsection
(5) of section 165 of
the said Code shall have effect as if
for the word “Magistrate”, wherever it
Page 65 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
occurs, the word “Commissioner” were
substituted.”
The said provision coupled with the last
para of form GST INS1
specified in rule
139(1) which is reproduced as below, has
been relied upon to record statements of
persons present in the premises where search
is conducted.
“Any attempt on the part of the person
to mislead, tamper with the evidence,
refusal to answer the questions relevant
to inspection/ search operations, making
false statement or providing false
evidence is punishable with imprisonment
and /or fine under the Act read with
section 179, 181, 191 and 418 of the
Indian Penal Code.”
Taking into consideration the above
provisions, the departmental authorities
have been recording statements during
search. Further, for the purpose of
ascertaining truth and real facts of the
case, investigation is carried out as was
done under the Gujarat Value Added Tax Act,
2003. In this case also the authorised
officers have followed the past precedents
considering that they have the power or
investigation and acted accordingly in good
faith.
Page 66 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
So far as the issue of prolonged search
in the instant case is concerned, I say that
I have narrated all the reasons for such
prolonged search in my report of inquiry
dated 19/11/2019. I reiterate that the
longer stay at the residential premise of
the tax paper is not desirable and requires
to be avoided as far as possible. I say that
the time to complete search proceedings of
the case depends on the facts and
circumstances of the case which vary from
case to case. It is noteworthy that
collection, interpretation, corelation
and
confrontation of the materials found during
the search are required to be done prior to
seizure, in order to have complete idea
about the nature of transactions and its
implication. This process itself requires
considerable time depending upon the volume
and nature of incriminating data found. In
the present case, in the effort to recover
incriminating documents which were secreted
by the petitioner as per the information and
in order to get a complete idea of the
implication of digital data found in the
form of prerecorded
call recordings, the
authorized officers decided to stay for a
longer period acting in good faith and in
Page 67 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
the interest of the Government revenue.
Looking to the longer stay during search
and seizure proceedings in the instant case
and considering the provisions of law, it
has been decided that henceforth all search
and seizure proceedings at residential
premise should be completed as soon as
possible and in case of noncompletion
within twentyfour
hours, stringent watch on
such proceedings will be kept by higher
authorities and a permission if higher
authorities shall be obtained. Departmental
instructions shall be followed during the
search and seizure proceedings at the
residential premises which have been issued
vide letter outward no 2336 dated 09/12/2019
to the field formation. The department is
open to issue such further instruction for
search and seizure proceedings at
residential premises as may be required.”
25. Thus, the stand of the Chief Commissioner in
the above report is that in view of past
precedent under the Gujarat Value Added Tax Act,
2003, the officers under the GST Acts have
recorded statements of the family members of the
petitioner. On a perusal of the contents of the
report it appears that according to the Chief
Page 68 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
Commissioner under the GVAT Act, statements of
persons present at the search premises were being
recorded. The Chief Commissioner has placed
reliance upon the provisions of section 88 of the
Gujarat Value Added Tax Act, 2003 which relates
to authorisation to investigate; overlooking the
fact that in the present case the authorisation
was for search and seizure and not investigation
inasmuch as recording of statements under section
161 of the Code finds place in Chapter XII
thereof which pertains to “Information to the
police and their powers to investigate” and not
under the provisions of the Code relating to
search and seizure. Be that as it may. At best,
giving benefit of doubt to the concerned
officers, such defence may be accepted, namely
that they were under the impression that
statements of family members could be recorded
during the course of search. That however, does
not justify the stay at the residential premises
of the petitioner for eight days, despite the
fact that the search for documents, books and
things was over on the very first day. Moreover,
even after the search was over, it was always
open for the concerned officers to summon any of
the family members of the petitioner under
section 70 of the GST Acts if they wanted to
record their statements or confront them with any
material found during the course of search. In
Page 69 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
the opinion of this court, the last part of the
report flies in the face of the panchnama of the
search proceedings, wherein there is not even a
whisper regarding any collection, interpretation,
corelation
and confrontation of the materials
found during the search. All that is stated is
that the statements of the family members
regarding the whereabouts of the petitioner were
recorded at different times of the day in
question answer
form and time and again they
were asked as to whether they had any information
about the petitioner. The statement in the report
to the effect that in the effort to recover
incriminating documents which were secreted by
the petitioner as per the information and in
order to get a complete idea of the implication
of digital data found in the form of prerecorded
call recordings, the authorized officers decided
to stay for a longer period acting in good faith
and in the interest of the Government revenue,
also does not inspire confidence, inasmuch as
there is nothing recorded in the panchnama to
show that the concerned officers were examining
the prerecorded
call recordings. Also statements
of the family members appear to have been
recorded either in the morning or afternoon or at
night and at times only once in a day. At all
other times, the only query put to them is as to
whether they had any news about the petitioner.
Page 70 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
One fails to understand as to what the officers
concerned were doing at the residential premises
of the petitioner for a whole week, along with
two panchas and an SRP Constable when the search
was concluded on day one. Such action on the part
of the respondents is abhorrent and cannot be
countenanced. No provision of the Code of
Criminal Procedure, for investigation, search or
seizure, empowers a police officer to remain a
moment longer at any premises once the search is
over. At this juncture, it may be apposite to
note that the Supreme Court in Incometax
Officer
v. Seth Brothers (supra) has held that since by
the exercise of powers of search and seizure a
serious invasion is made upon the rights, privacy
and freedom of the taxpayer, the power must be
exercised strictly in accordance with the law and
only for the purposes for which the law
authorises it to be exercised. In the facts of
the present case, the power under subsection
(2)
of section 67 of the GST Acts has not only not
been exercised strictly in accordance with law,
but has also not been exercised for the purposes
for which the law authorises it to be exercised,
namely that though the power was to be exercised
for carrying out search and seizure of goods
liable to confiscation, documents, books or
things at the place in respect of which the
authorisation of search was given, the search was
Page 71 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
converted to a search for the dealer and into an
investigation to find out other places where
documents, books or things could have been
secreted, which was beyond the scope of the
powers vested in the authorised officer.
26. Article 21 of the Constitution of India reads
thus:
“21. Protection of life and personal liberty–
No person shall be deprived of his life or
personal liberty except according to
procedure established by law.”
In the facts of the present case, the family
members of the petitioner have been deprived of
their personal liberty not only by being confined
in the residential premises and being permitted
to leave only with the consent of the authorised
officer, and that too, at times with an escort;
but also by an intrusion on their right to
privacy by several strangers residing in their
residential premises for eight days, that too,
without any authority of law. One shudders to
think of the plight of one’s own grown up
unmarried daughter if she were in the place of
the petitioner’s daughter. But unfortunately, the
respondents have no regrets! All that is stated
is that longer stay at the residential premise of
Page 72 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
the tax payer is not desirable and requires to be
avoided as far as possible.
27. It is a matter of deep regret that the Chief
Commissioner of State Tax has attempted to
justify such wrongful action on the part of the
officers of the department by placing reliance
upon the provisions relating to power of
investigation under an earlier enactment to
justify the actions of the concerned officers who
were exercising powers of search and seizure
under section 67(2) of the GST Acts. One would
expect the higher officer to reprimand the
subordinate officers for their unauthorised
actions. But in this case, the higher ups, for
reasons best known to them are trying to shield
the actions of the subordinate officers though
they are not in a position to show the relevant
provisions of law under which such officers were
empowered to act in this manner. All that the
court can say at this stage is that the reports
submitted of the Chief Commissioner in response
to the orders dated 25.10.2019 and 20.11.2019, do
not meet with the standards expected from an
authority of his stature.
28. Lastly the court may sound a word of caution
to the authorities exercising powers under the
GST Acts. Subsection
(2) of section 157 of the
Page 73 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
GST Acts says that no suit, prosecution or other
legal proceedings shall lie against any officer
appointed or authorised under the Act for
anything which is done or intended to be done in
good faith under the Act or the rules made
thereunder. An action like the present one which
is not contemplated under any statutory provision
and which infringes the fundamental rights of
citizens under article 21 of the Constitution of
India may not be protected under this section. An
action taken may be said to be in good faith if
the officer is otherwise so empowered and he
exceeds the scope of his authority. However, in a
case like the present one where the authorisation
was for search and seizure of goods liable to
confiscation, documents, books or things and the
concerned officer converted it into a search for
a person and an investigation, which is not
otherwise backed by any statutory provision, it
may be difficult to accept that such action was
in good faith. Protection of such action under
section 157 of the GST Acts may unleash a regime
of terror insofar as the taxable persons are
concerned.
29. It is clarified that this court does not
condone any alleged illegal acts on the part of
the petitioner and in case he has indulged in any
illegalities, the law should take its own course.
Page 74 of 75
Downloaded on : Sat Feb 08 12:29:53 IST 2020
C/SCA/18463/2019 ORDER
However, the court found it necessary to pass the
present order to curb any further abuse of powers
in this manner by the authorities under the GST
Acts.
30. Before parting, this court would like to
record its deep appreciation for the extremely
valuable assistance provided by Mr. Tushar
Hemani, the learned amicus curiae.
31. Let the matter be listed for hearing on
merits on 23.01.2020.
(HARSHA DEVANI, J)
(SANGEETA K. VISHEN, J)