The Patna High Court has held that the GST inspection was carried out without any independent witnesses and even the order of seizure is invalid due to tampered/interpolated documents.
The bench of Justice P. B. Bajanthri and Justice Alok Kumar Sinha has observed that the inspection was carried out without any independent witnesses and even the order of seizure is invalid due to tampered/interpolated documents, on both these counts they are against the provision as contained under Section 67 of the BGST/CGST Act, 2017 read with Section 100 of the Code of Criminal Procedure, 1973.
The Officer, Ms. Kumari Anu Soni had conducted the inspection of the petitioner’s establishment in
the capacity of Assistant Commissioner, State Tax and had prepared the order of seizure. The original order of seizure had been tampered/interpolated.
In the seizure order Details of Goods Seized, the words ‘As Per Physical Verification’ were not mentioned but in the original order of seizure the words ‘As Per Physical Verification’ had been inserted/interpolated by Ms. Kumari Anu Soni who had signed and prepared the order of seizure.
The court ordered for personal appearance of Ms. Kumari Anu Soni, who is now posted as Deputy Commissioner of State Tax. While physically appearing before the Court when she was confronted with the above factual position she admitted that she had entered the words ‘As Per Physical Verification’ in the original order of seizure. She also admitted to having done this tampering/interpolation in the original order of seizure when the present case was pending and the entire matter was subjudice. After having accepted her mistake she begged for an apology.
The Court directed Kumari Anu Soni to file her personal affidavit admitting to have tampered/interpolated i.e. the order of seizure and to give an undertaking that she will not commit such mistake in future. During the course of the day, a personal affidavit was filed by Kumari Anu Soni (Deputy Commissioner of State Tax).
Although the conduct of Kumari Anu Soni is a serious misconduct for which we could have ordered for initiating disciplinary proceeding against her but given the fact that she had no previous experience of search and seizure and she being a young officer the court took a lenient view in the matter by admonishing her, henceforth if she commits a misconduct of this nature then, taking a serious view of the matter, she should be subjected to a disciplinary proceeding for being appropriately punished by disciplinary authority or court of law.
The petitioner has challenged the demand letter issued by the department which is purported to have been issued under Section 74 (9) of BGST/CGST Act, 2017 demanding tax, interest and penalty to the tune of Rs.4432250.25 under CGST and, Rs.4432250.25 under BGST, totalling to Rs.8864550.50 for the period April, 2023 to January, 2024.
The petitioner has assailed the demand contending that it is based on an inspection/search carried out on 18.01.2024 of the petitioner’s establishment, which as per the petitioner is in complete violation of the provision contained in Section 67(10) of BGST/CGST Act, 2017 read with Section 100(4) of the Code of Criminal Procedure, 1973 because as per the petitioner the inspection/search was made in absence of two independent witnesses.
As per the petitioner, the search/inspection was also in violation of Instructions No. 01/2020-21 GST-Investigation dated 02.02.2021, CBIC GST.
Investigation Wing wherein in para 2(vii) it has been mandated “that the search authorisation shall be executed before the start of the search and the same shall be shown to the person In-charge of the premises to be searched and his or her signature with date and time shall be obtained on the body of the search authorisation. The signature of the witnesses with date and time should also be obtained on the body of the search authorisation”. Since as per the petitioner the search/inspection was in violation of Section 67(10) of BGST/ CGST Act, 2017 therefore the demand dated 09.05.2024 based on such inspection was not proper and thus fit to be set-a-side.
The court noted that since as per the petitioner the search/inspection was in violation of Section 67(10) of BGST/ CGST Act, 2017 therefore the demand based on such inspection was not proper and thus fit to be set-a-side.
The court held that the order of seizure had been admittedly tampered/interpolated by Ms. Kumari Anu Soni who is the maker of the said document, further makes the order of seizure totally invalid and unreliable.
Case Details
Case Title: M/s Sri Sai Food Grain and Iron Stors Versus The State of Bihar
Case No.: Civil Writ Jurisdiction Case No.13674 of 2024
Date: 25-04-2025
Counsel For Petitioner: Justice P. B. Bajanthri
Counsel For Respondent: Justice Alok Kumar Sinha
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