DGGSTI was justified in conducting search on premises of assessee based on requisite evidence indicating duty evasion: HC

No Comments

Facts:

M/s. Sanwaria Sweets Private Limited (“the petitioner”) filed a writ petition with prayer that search launched by Revenue namely, Directorate General of Goods and Services Tax Intelligence (“DGGSTI”) on the premises of the petitioner being contrary to provisions of Central Excise Act, 1944 and being without jurisdiction.

Further, it was prayed that all documents including original sale/title deeds of various immovable properties taken away during search be returned. Revenue argued that all the documents were handed over to the assessee against the clear receipt, while denying that search was conducted without “reason to believe”.

Issues Involved: 

  1. Whether search conducted by DGGSTI on premises of the petitioner was valid?
  2. Whether or not the concerned officer had “reason to believe” to conduct search on the premises of the petitioner?

Held:

The Hon’ble High Court for Rajasthan Bench at Jaipur vide D.B. Civil Writ Petition No. 2031/2018 held that in its earlier interim order it did not grant relief to the Petitioner and held that they were accused of a serious offence of evading Excise Duty of more than 63 crores and matter is now pending investigation. Additionally, out of the seized documents incriminating material was found which showed that petitioner was the real owner of the unregistered factory and actual beneficiary of the business.

In answer to second question, the Court observed that “reason to believe” cannot be scrutinised under “legal microscope” with an over-indulgent eye which sees no evil everywhere within the range of its eyesight. The writ petition was dismissed being devoid of merits.

Citation: [TS-359-HC-2019 (RAJ)-EXC]