Stay at taxpayers premise without a law in place is violative of Article 21 of COI:PARESH NATHALAL CHAUHAN Versus STATE OF GUJARAT

Case Covered: PARESH NATHALAL CHAUHAN Versus STATE OF GUJARAT

PARESH NATHALAL CHAUHAN

Versus
STATE OF GUJARAT

Important Facts of the Case:

• Section 67(2) gives the right to search and seize “goods liable to confiscation or any documents or books or things”. But in this case family members were questioned for 8 days. This right is not given by the CGST Act to the officers.
• Under section 70 of the CGST Act, they had the right to summon them for questioning. 
• There is no provision in GST for such prolonged investigation.
• The act of officers is violative of Article 21 of the Constitution of India. It provides for the right to privacy. 

Important case covering the right under article 21 of the Constitution of India. The officers from the department resided for 8 days at taxpayers’ premises. It was not covered by any provision of GST as such. The verdict given by Honourable court is important as it states that it is against the right under article 21 of COI.

Important discussion in the proceedings:

Section 67(2) of CGST Act read with section 161 of criminal procedure:

“section   (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. Insofar as the statements of the members residing in the searched premises are concerned, reference was made to section 161 of the Code. “

Download copy of the order:

Observation of Honourable Gujrat High Court:

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 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 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