GST Department ordered to provide certified copies of lost seized documents and other files to the assessee,

Department ordered to provide certified copies of lost seized documents and other files to the assessee, who must cooperate in assessment.

Issue:

When original seized documents are lost by the revenue, and the Supreme Court has already directed the return of certified copies of documents not relied upon, what are the appropriate directions for the revenue to provide the remaining necessary documents to the assessee to enable their cooperation in assessment proceedings.

Facts:

• This was a miscellaneous application filed by the petitioner-assessee.
• The main matter in the case had already been disposed of by the Supreme Court.
• The Supreme Court, in its order, had not disturbed the High Court’s original order and had directed the respondent authorities to return certified copies of documents that, according to them, were not relied upon for proceeding further. The Supreme Court also stated that upon receipt of these certified copies, the petitioner-assessee should file any necessary reply.
• However, the Supreme Court’s order in the miscellaneous application was passed without issuing notice to the respondent-assessee (likely meaning the revenue/department in this context).
• The High Court’s attention was drawn to the original Order of Seizure (under Section 67(2) of the CGST Act, 2017), which explicitly stated that the officer had reasons to believe that certain documents and books useful/relevant to proceedings were secreted and had seized them as per a provided list.
• It was revealed that “Three Original files” from this list had been lost by the department.

Decision:

The court held in favor of the assessee. It directed the department to furnish certified copies of the three lost original files. Furthermore, since the department was willing to hand over all other files, the assessee was directed to collect those from the concerned department. In turn, the assessee was also directed to extend full cooperation in the assessment proceedings.

Key Takeaways:

• Duty of Department to Preserve Seized Documents: The primary duty of the tax authorities is to preserve all seized documents and records. Loss of original documents is a serious lapse.
• Right to Documents for Defence: An assessee has a fundamental right to access and possess copies of documents seized from them, especially those that are relevant for defending their case in assessment proceedings.
• Consequences of Lost Documents: When original seized documents are lost, the department has an obligation to provide certified copies to the assessee to ensure due process and fair assessment. The assessee cannot be prejudiced by the department’s failure to preserve records.
• Balancing Interests: The court balanced the assessee’s right to access documents for their defense with the need for assessment proceedings to continue. It compelled the department to provide the necessary documents while requiring the assessee to cooperate.
• Section 67 (Search and Seizure): This section outlines the powers of inspection, search, and seizure. The seized documents are vital evidence for both the department and the assessee during subsequent proceedings.
• Cooperation in Assessment: The court’s direction for the assessee to extend full cooperation in assessment proceedings is standard when such relief is granted, ensuring that the process can move forward.
• Specific vs. General Directions: The order highlights the need for specific directions when documents are lost, going beyond general directives to ensure that the assessee actually receives the necessary information.
• “In favour of assessee”: The order is in favor of the assessee because it addresses their grievance regarding access to documents, which is crucial for their defense.