Facts of the Case

The petitioners approached the Delhi High Court in writ proceedings arising from a Show Cause Notice dated 16 August 2022. The controversy before the Court concerned the availability and supply of documents connected with the Show Cause Notice, including seized documents treated as Relied Upon Documents (RUDs), other documents stated to be in the custody of the respondent/Revenue, and electronic devices requiring cloning before being returned to the petitioners’ authorised representative.

Pursuant to an earlier order dated 12 October 2022, counsel appearing for the respondent/Revenue returned with instructions and informed the Court regarding the steps proposed for supplying documents and dealing with seized electronic devices. The order records that the RUDs, namely seized documents appended to the subject Show Cause Notice, had already been furnished to the petitioners.

The Revenue further stated that where documents were not on record but remained in its custody, photocopies would be furnished with an endorsement clarifying that the photocopy of the relevant document was backed by a seized document in the custody of the Revenue. The Court specifically recorded that such endorsement should clearly reflect this position.

As regards electronic devices, the Revenue stated that they would be cloned and thereafter returned to the authorised representative of the petitioners. The date and time for carrying out this exercise were to be fixed and communicated in writing by email. The entire exercise was directed to be completed within four weeks.

Issues Involved

The principal issues arising in the proceedings were whether the petitioners should receive complete access to the documentary material relevant to the Show Cause Notice, including documents in the custody of the Revenue; whether photocopies of such documents should carry a clear endorsement linking them to seized originals in Revenue custody; whether seized electronic devices should be cloned and returned to the petitioners’ authorised representative; and what reasonable period should be granted for filing a reply to the Show Cause Notice after completion of the document-supply and cloning exercise.

The proceedings also involved the broader procedural question of ensuring an effective opportunity to respond to the Show Cause Notice after access to the relevant material and electronic devices had been facilitated.

Petitioners’ Arguments

The petitioners’ case, as reflected from the relief ultimately addressed through the Revenue’s statements and the Court’s directions, concerned access to documents and seized material necessary for responding effectively to the Show Cause Notice dated 16 August 2022.

The petitioners required the relevant documents in Revenue custody to be made available and sought appropriate handling of seized electronic devices. Once the Court recorded the directions concerning supply of documents, cloning and return of electronic devices, and the subsequent time allowed for filing the reply to the Show Cause Notice, learned senior counsel for the petitioners stated that the writ petitions could be closed.

It is important to clarify that the three-page order does not record a detailed merits-based argument on the substantive tax allegations contained in the Show Cause Notice. Therefore, no substantive tax defence should be attributed to the petitioners beyond what is actually reflected in the judicial order.

Respondent’s Arguments / Revenue’s Stand

The respondent/Revenue, through its counsel, made the following statements before the Delhi High Court:

  1. The Relied Upon Documents (RUDs), namely seized documents appended to the Show Cause Notice, had already been furnished to the petitioners.
  2. Documents not on record but in the custody of the Revenue would be supplied by way of photocopies.
  3. Such photocopies would carry an endorsement clarifying that the relevant photocopy was backed by a seized document held in the custody of the Revenue.
  4. The endorsement on the document should clearly disclose this position.
  5. The electronic devices would be cloned and thereafter returned to the authorised representative of the petitioners.
  6. The date and time for the cloning exercise would be fixed and communicated to the petitioners in writing through email.
  7. The Revenue’s statement was taken on record by the Court.

Court Order / Findings

The Delhi High Court disposed of the writ petitions by recording and acting upon the statements made on behalf of the Revenue and issued clear procedural directions.

The Court directed that the exercise concerning the relevant documents and cloning/return of electronic devices be completed within four weeks.

The Court further clarified that once the aforesaid exercise was completed, the petitioners would file their reply to the Show Cause Notice dated 16 August 2022 within six weeks thereafter.

In view of these directions, counsel for the petitioners stated that the writ petitions could be closed, and the Court ordered accordingly.

The Court additionally clarified that the petitioners would bear the costs of photocopying as well as cloning.

Important Clarification

This order should be understood as a procedural direction concerning access to documents, treatment of material in Revenue custody, cloning and return of seized electronic devices, and the timeline for replying to the Show Cause Notice.

The Delhi High Court did not adjudicate the substantive merits of the tax allegations in the Show Cause Notice in this order. Nor did the Court quash the Show Cause Notice. Instead, the proceedings were closed after recording the Revenue’s statements and establishing a structured timeline for completion of the document/electronic-device exercise and filing of the petitioners’ reply.

A particularly significant clarification is that where a document was not on record but remained in Revenue custody, the photocopy to be supplied was required to carry an endorsement making clear that it was backed by a seized document held by the Revenue. This ensured clarity regarding the source and custody of the underlying seized material.

The Court also expressly placed the cost of photocopies and cloning upon the petitioners.

Sections  Involved

The uploaded order does not expressly identify or adjudicate any specific section of the CGST Act, 2017, Central Excise Act, 1944, or another taxing statute as the determinative statutory provision in the operative directions. Accordingly, inserting a specific statutory section as though expressly decided by the Court would alter the meaning and scope of the order.

The legal subject matter, as actually reflected in the order, concerns:

Article 226 of the Constitution of India – writ jurisdiction of the High Court, reflected by the W.P.(C) proceedings.

Show Cause Notice proceedings – procedural opportunity to respond after completion of supply/access to relevant material.

Relied Upon Documents (RUDs) – seized documents appended to the subject Show Cause Notice.

Documents in Revenue custody – supply of photocopies with appropriate endorsement regarding the seized document backing them.

Seized electronic devices – cloning followed by return to the authorised representative of the petitioners.

Principles of natural justice and effective opportunity of response – relevant to the procedural context, although the order itself does not set out an elaborate doctrinal ruling under a specifically cited statutory section.

 Link to download the order - https://mytaxexpert.co.in/uploads/1783155994_870compressed.pdf

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