Facts of the Case

The petitioner, M/S Vats Group India Pvt. Ltd., was subjected to search action by the Directorate General of GST Intelligence (DGGI), Regional Unit, culminating in a panchnama drawn up against it. The petitioner approached the Allahabad High Court seeking permission to file a reply to the panchnama in accordance with the applicable rules under the GST law. The matter was heard by a Division Bench and disposed of on 30.11.2023.

Issues Involved

  1. Whether the petitioner should be permitted to file a reply to the panchnama issued during the DGGI search action.
  2. Whether the department should be directed to adjudicate on the reply only after affording the petitioner an opportunity of hearing.

Petitioner's Arguments

  • The petitioner primarily prayed that it be permitted to file its reply to the panchnama issued during the search, in accordance with the applicable rules under the GST law.

Respondent's Arguments

  • Counsel for the Directorate General of GST Intelligence, Regional Unit, and the connected respondents appeared before the Court; the order records no specific opposition to the limited procedural relief sought by the petitioner.

Court Order/Findings

  • Without going into the merits of the case, the Court allowed the petitioner to file its reply to the panchnama within 15 days, in accordance with the applicable rules.
  • The department was directed to adjudicate on the reply only after granting the petitioner an opportunity of hearing, within two weeks of the reply being filed.
  • With these directions, the writ petition was disposed of without any finding on the merits of the search or the panchnama itself.

Important Clarification

  • A taxpayer subjected to a GST search is entitled to file a reply to the panchnama before the department proceeds to adjudicate on it.
  • Courts routinely dispose of such petitions procedurally, securing the taxpayer's right to reply and a hearing, without adjudicating the underlying merits of the search action.

Sections Involved

  • Search and seizure provisions under the Central Goods and Services Tax Act, 2017 — govern search, panchnama and subsequent adjudication procedure followed by the Directorate General of GST Intelligence.

Decision – In Favour of

Disposed of with directions, in part in favour of the Assessee — the petitioner secured the right to reply and a hearing before adjudication, though the Court expressed no view on the merits of the search.

Related Case Laws

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

Case Details

  • Court: Allahabad High Court
  • Case No.: WRIT TAX No. 1304 of 2023
  • CNR: Not available on record
  • Coram: Hon'ble Siddhartha Varma, J. and Hon'ble Shekhar B. Saraf, J.
  • Decision Date: 30.11.2023
  • Disposal Nature: Disposed of with directions

Link to Download the Order

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