Seizure and Retention of Documentary Records and CPU prevented from Contesting GST Demand: Calcutta HC Directs Return of Items [Read Order]

It was contended that the impugned order confirming tax demand on allegations of suppression violated principles of natural justice.

The Calcutta High Court recently granted relief to an assessee, holding that the continued seizure and retention of records and computer CPU by the Goods and Services Tax (GST) authorities deprived the assessee from meaningfully contesting the tax demand raised on allegations of short-payment and suppression.

The High Court accordingly directed the authorities to return the seized materials before proceeding further.

A writ petition was filed by M/s Priti Builders, challenging an order dated December 18, 2024 passed under Section 74 of the West Bengal GST Act, 2017 and the CGST Act, 2017.

Priti Builders contested the impugned order confirming tax demand on allegations of suppression was passed in violation of principles of natural justice.

The facts portray that GST authorities conducted a search and seizure operation at the assessee’s principal place of business on January 25, 2024, during which documents, books of accounts and the CPU of the assessee’s computer system were seized. Subsequently, the assessee was served an intimation under Section 74(5) alleging short payment of tax, followed by a show cause notice under Section 74(1) of the Act.

Though the assessee attempted to procure copies of the seized documents and return of the CPU to effectively contest their case, the GST authorities were unwilling to comply with the same. Thereafter, a final order was passed confirming the demand, leading to this writ.

Debasish Ghosh appearing for the petitioner reiterated their pleas and highlighted that the petitioner was unable to frame its defence appropriately and to meaningfully participate in the adjudication proceedings.

Tanmoy Chakraborty appearing for the State contended that though the petitioner had been provided opportunities of hearing, the petitioner was not in attendance. It was further stated that a letter had been issued by the Commissioner of Revenue, West Bengal GST directing the petitioner to file a petition and appear before the authority to retrieve the original documents and seized CPU.

Justice Om Narayan Rai noted that it was undisputed that the seized documents and CPU had not been returned to the assessee.

Observing that the non-availability of the seized records deprived the assessee of a fair opportunity to contest the proceedings and further impeded their right to file an effective appeal, the Court directed that the impugned order not be effectuated.

Justice Rai further directed that the GST authorities return the seized documents or copies thereof and the CPU and issued directions for the same, and to thereafter conclude the proceedings afresh after granting the assessee a proper opportunity of hearing.

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