The Punjab and Haryana High Court dismissed a writ petition seeking quashing of panchnama and a direction to respondents, Union of India to return all the documents and records seized filed by Shri Vishnu Processors.
The petitioner is engaged in the supply of input to M/s W and M/s NMR. In an ongoing investigation upon M/s W and M/s NMR for availing ineligible drawback and IGST by way of accumulating ITC, a search was also conducted by the Director of Revenue Intelligence (DRI) in the factory premises of Petitioner leading to the seizure of their records and preparation of panchnama in relation to such search proceedings.
It has been contended on behalf of the petitioner that the panchnama should be quashed for the reason that the DRI had no jurisdiction to conduct the search at the petitioner’s premises since he is not the exporter, against whom investigation proceedings are ongoing. Additionally, the scope of such investigation against M/s W and M/s NMR can only be extended to the petitioner by the GST Department and not by the DRI.
The respondents on the other contend that the writ petition is not maintainable for the reason that the copies of records and documents for the release of which a direction has been sought have already been provided. Also, the search in the petitioner’s premises was valid for investigation against M/s W and M/s NMR since he was one of the suppliers to them.
The bench constituting Hon’ble Justices Ajay Tewari and Avneesh Jhingan while making a reference to Section 105 of the Customs Act, 1962 held that the provision is widely worded and does not provide for any qualification of being the ‘exporter’ or ‘importer’ to initiate search proceedings.
“The section is widely worded and search can be conducted if the Assistant or Deputy Commissioner of Customs has reasons to believe that there are any document or thing which in his opinion will be useful or relevant to any proceedings under this Act or secreted at any place. The section does not restrict the search only with regard to importer or exporter, the other premises can also be searched. The petitioner was a supplier/seller to the exporters at Ludhiana, there was an investigation that ineligible drawback, etc. had been claimed by procuring only the bills without there being the transfer of goods, this establishes the relevance of search with proceedings under the Act.”, the Court said.
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