Facts of the Case

Tvl Meenakshi Marketing Pouch World, a dealer in mobile and computer accessories represented by its proprietor B. Bagada Ram and registered under GSTIN 33BNGPB1586C1ZI, was inspected by the Intelligence Wing of the Commercial Tax Department on 17.03.2021 and 18.03.2021. The inspection flagged omission of interstate inward supply, omission of outward supply, stock difference and purchase suppression, and a notice in Form DRC-01A dated 25.11.2022 was issued. The petitioner replied on 27.11.2023, referring back to an earlier reply dated 20.03.2023 to a DRC-01A notice dated 01.09.2022, in which he had specifically invoked Section 67(5) of the GST Act requesting copies of the seized documents. Without furnishing those documents or considering the representation, the respondent passed the assessment order dated 05.10.2023, which the petitioner challenged.

Issues Involved

  1. Whether the assessing authority was obliged under Section 67(5) of the GST Act to furnish copies of documents seized during inspection to the petitioner before passing the assessment order.
  2. Whether an assessment order passed without furnishing such copies, despite the petitioner having specifically raised the point, was liable to be set aside.

Petitioner's Arguments

  • Argued that Section 67(5) of the GST Act entitles the person from whose custody documents are seized to obtain copies or extracts before adjudication, except where this would prejudicially affect the investigation.
  • Pointed out that he had specifically raised this statutory entitlement in his reply dated 20.03.2023 to the earlier DRC-01A notice, putting the Department squarely on notice of the requirement.
  • Contended that despite this, the respondent proceeded to pass the assessment order without ever furnishing the seized documents, denying him a fair opportunity to respond to the discrepancies alleged.

Respondent's Arguments

  • The Government Advocate, appearing on notice for the respondent, fairly and candidly conceded that the documents required to be furnished under Section 67(5) of the GST Act had, in fact, not been provided to the petitioner before the assessment order was passed.
  • No further defence of the impugned order was advanced once this concession was made.

Court Order/Findings

  • Considering the submissions of both sides and the respondent's candid concession, the Court found that the mandatory documentary disclosure under Section 67(5) of the GST Act had not been complied with.
  • The impugned assessment order dated 05.10.2023 was set aside, with a direction to the respondent to furnish the documents required under Section 67(5) within four weeks.
  • Thereafter, the respondent was directed to provide the petitioner an opportunity and pass fresh orders in accordance with law, considering his representation, within a further four weeks.
  • No costs were imposed, and connected miscellaneous petitions were closed.

Important Clarification

  • Section 67(5) of the GST Act creates a mandatory right for a person whose documents are seized to obtain copies or extracts before adjudication, subject only to the proper officer's opinion that disclosure would prejudice the investigation.
  • An assessment order passed without furnishing such copies, despite the assessee having specifically flagged the requirement in an earlier reply, is liable to be set aside for want of procedural compliance, even without examining the underlying tax discrepancies on merits.
  • A candid departmental concession of non-compliance can lead to a quick, consent-style remand rather than prolonged adversarial litigation.

Sections Involved

  • Section 67(5), GST Act, 2017 — entitles a person from whose custody documents are seized to obtain copies or extracts, unless this would prejudice the investigation in the proper officer's opinion.
  • Form DRC-01A, GST Rules, 2017 — the intimation of tax ascertained as payable, issued to a taxpayer before formal proceedings, under which the discrepancies here were first communicated.

Decision – In Favour of

The writ petition was allowed, the assessment order was set aside, and the matter was remanded. The decision is in favour of the Assessee.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: Madras High Court, Madurai Bench
  • Case No.: W.P(MD)No.30294 of 2023
  • CNR: Not available on record
  • Coram: Hon'ble Mr. Justice B. Pugalendhi
  • Decision Date: 19.12.2023
  • Disposal Nature: Allowed - assessment order set aside, remanded

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