Petitioner complains that he had been subjected to harassment at hands of CGST Authorities who have searched them numerous times. He submits that in fact he had responded to summons issued in this regard, pursuant whereto statement of Petitioner company's director was also recorded. This search action was challenged by petitioner in writ petition before High Court. Said challenge was successful and consequently search action was quashed.
■■■ HIGH COURT OF DELHI RCI Industries & Technologies Ltd. v. Commissioner DGST, Delhi
Petitioner complains that he had been subjected to harassment at hands of CGST Authorities who have searched them numerous times. He submits that in fact he had responded to summons issued in this regard, pursuant whereto statement of Petitioner company's director was also recorded. This search action was challenged by petitioner in writ petition before High Court. Said challenge was successful and consequently search action was quashed. Petitioner's grievance is that now State GST Authority i.e. DGST has subjected Petitioner to yet another search action in relation to same period, despite Petitioner being earlier subjected to search action at hands of Central Authorities, which was impugned before High Court. It is argued that action of State authorities under DGST Act is illegal and unlawful and contrary to provisions of the CGST/DGST Act
Held
If an officer of Central GST initiates intelligence-based enforcement action against a taxpayer administratively assigned to State GST, officers of former would not transfer said case to their counterparts in latter department and they would themselves take case to its logical conclusion.
Under section 67 of the CGST Act, when an authorized officer carries out an inspection, search and seizure, same is on basis of satisfaction arrived at by proper officer not below rank of Joint Commissioner that reasons to believe as specified under said provision. Courts can interfere and hold exercise of power to be bad in law only if grounds on which reason to believe is founded have no rational connection between information or material recorded; or are non-existent; or are such on which no reasonable person could come to that belief. Where Appropriate authority had reasons, as per mandate of section 67(2) along with relevant Rules, for formation of belief to carry out search and applying test of reasonable man, it could not be said that there was no application of mind while issuing search warrant, hence search action taken against petitioner could not have been countermanded/revoked.
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