High Court condemns GST officials staying 8 days at searched residential house, says such action punishable with three years jail term under IPC
ABCAUS Case Law Citation:
ABCAUS 3234 (2020) (01) HC
Important case law relied upon by the parties:
Income Tax Officer v. Seth Brothers, (1969) 74 ITR 836 (SC)
Dr. Nand Lal Tahiliani v. Commissioner of Incometax, (1988) 170 ITR 592
GST officials staying 8 days at searched residential house illegal
In a recent order, the Hon’ble Gujarat High Court has condemned the action of the GST Officials being part of a search party having staying in the residential premises of the taxable person for eight days.
The Hon’ble High Court observed that during the said 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.
The Lordships were shocked to know the incident and stated that the Court would be failing in its duty 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.
In its previous order the Hon’ble High Court had observed that though section 67 of the CGST Act empowers the authorised officer to search and seize goods, documents or books or things, 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. However, Sub-section (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.
The Hon’ble High Court had observed that it is not permissible for the authorised officer to use coercive measures against family members to find out the whereabouts of the taxable person.
The Hon’ble High Court was shocked to see that in a premises where there were three ladies, namely, the petitioner’s mother, wife and young daughter, male officers together with a CRPF Officer had stayed throughout day and night despite the fact that the goods, articles and things had already been seized.
The Hon’ble High Court had held that the entire exercise carried out by the concerned officers 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.
According to the Hon’ble High Court, the manner in which the officers had conducted themselves by overreaching the process of law and acting beyond the powers vested in them under sub-section (2)
of section 67 of the CGST Act needs to be deprecated in the strictest terms.
The Hon’ble High Court had ordered that GST Commissioner shall carry out a proper inquiry in respect of the action of the GST officers of staying day and night at the premises of the petitioner without any authority of law.
Subsequently, the Hon’ble High Court out of the deep concerned about the matter, and more particularly that such incidents should not be repeated, appointed an amicus curiae to assist the court.
The Hon’ble High Court opined that the GST 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.
On a perusal of the contents of the panchnama, the Hon’ble High Court noted that it was evident that during the time the officers were present in the house, 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, had been interrogated even during night hours, and there was 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 appeared 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.
Also the Hon’ble High Court noted that there was 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 was stated as regards where the members of the search party stayed during the course of the day and where they slept at night.
The Hon’ble High Court also noted that while the authorisation issued was to search the premises mentioned in the authorisation, the entire search was converted to a search for the dealer. Also no summons was issued to the petitioner under section 70 of the GST Acts nor was it the case of the GST that he was summoned, but had not remained present. Moreover, even if the petitioner may have been intentionally avoiding the authorities, the same was 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.
The Hon’ble High Court stated that the GST 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.
Action of GST Officials punishable to 3 years jail term
The Hon’ble High Court pointed out that 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.
The Hon’ble High Court stated that in the present case, the unauthorised action of the concerned officers may tantamount to an offence under the Indian Penal Code. The Hon’ble High Court opined 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 appeared to be a specious plea, inasmuch as, even under the previous enactments such action was not permissible.
The Hon’ble High Court noted that the GST Commissioner in his report took the stand that in view of past precedent under the Gujarat Value Added Tax Act, 2003, the officers under the GST Acts had recorded statements of the family members of the petitioner. However, in the present case the authorisation was for search and seizure and not investigation.
The Hon’ble High Court stated that it is a matter of deep regret that the Chief Commissioner of State Tax had attempted to justify such wrongful action on the part of the officers 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.
The Hon’ble High Court stated that higher officer are expected to reprimand the subordinate officers for their unauthorised actions. But in this case, the higher ups, for reasons best known to them were trying to shield the actions of the subordinate officers though they were not in a position to show the relevant provisions of law under which such officers were empowered to act in this manner.
The Hon’ble High Court sound a word of caution to the authorities that protection under section 157 of the GST Acts for act which is done or intended to be done in good faith under the Act/rules might not be available for 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.
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