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2020 (8) TMI 418 - HC - GSTRaid - validity of search and seizure proceedings - Section 67 of the CGST Act - simultaneous proceedings of investigation when audit in progress - attachment of Bank Accounts - allegation of harassment and high-handedness - HELD THAT:- The allegations raised of harassment and high-handedness cannot be considered in a petition under Article 226 of the Constitution. An operation carried out by a statutory authority invested with the powers of search, inspection and seizure, by reason only of such activities having been carried out in the residences and offices of any person under investigation for a long time, cannot be labeled as harassment or high-handed. Nor could the inconvenience caused to the person under investigation, especially of remaining in the premises for the entire duration, termed to a detention pursuant to an arrest. A search and seizure operation necessarily brings with it certain discomforts, which are to be endured in the best interest of the person under investigation who witnesses every action of the inspection team. The allegations are also not substantiated which, we perfectly understand, are impossible of substantiation, especially in a petition under Article 226. Apart from the invalidity urged of the very search, inspection and seizure, we are not considering any of the issues so raised in the writ petition and in the appeal. Simultaneous proceedings of investigation having been commenced when already an audit was in progress - HELD THAT:- Audit under section 65 is a routine procedure to be carried out by the Commissioner in such frequency and in such manner as prescribed in the rules; which is independent of an investigation under Section 67. Section 67 is a more onerous procedure which can be initiated only on the satisfaction of an Officer not below the rank of a Joint Commissioner of, suppression of taxable transactions, excess claim of input tax credit, contravention of the provisions of the Act and Rules, keeping of goods and accounts in contravention of the provisions, escapement of tax, secreting of goods or material liable to confiscation or relevant or useful in any proceedings under the Act and any act leading to evasion of tax. Investigation under Section 67 is no routine procedure as is an audit under section 65. In this context we cannot but observe that the appellants, on their own admission, were issued with notice dated 17.03.2020, Exhibit P2, calling for details of the LCOs. There is nothing stated in the writ petition as to how and in what manner the appellants responded to the said notice - there are no infirmity in the audit and investigation proceeding being continued simultaneously. But the learned Standing Counsel informs us that in the wake of the investigation commenced, the audit would not be proceeded with. Kaish Impex Private Limited, [2020 (1) TMI 933 - BOMBAY HIGH COURT] the decision of a Division Bench of the Bombay High Court, is not applicable to the facts of the instant case. Kaish Impex Private Limited was summoned with reference to an enquiry against a taxable person, one Maps Global. The allegation against Maps Global was fraudulent availing of input tax credit. On scrutiny of bank accounts of the said taxable person, it was noticed that an amount was transferred to one Balajee Enterprises who had transactions with Kaish Impex Private Limited. Simultaneous to the summons issued to Kaish Impex Private Limited, their Bank accounts were also attached - The attachment order specifically spoke of proceedings under Sections 67 and 70 as against Kaish Impex Private Limited. The power to provisionally attach, for the purpose of protecting revenue, is available under Section 83. Such attachment is also in the context of proceedings initiated under the specified Sections of the GST Act. The Division Bench found that Section 70 is not specified in Section 83 and there was no proceeding under Section 67 against Kaish Implex Private Limited. The attachment therein was of an entity who was twice removed from the taxable person subjected to investigation. This was the reasoning on which attachment was interfered with. Here, the Bank accounts attached are of the taxable person, against whom an enquiry is initiated under Section 67. The rule for a hearing does not arise prior to attachment. Whether it arises before seeking disbursement of the amounts remaining in the account, we are not called upon to adjudicate as of now. We leave the matter to be adjudicated before the appropriate authorities or forum. We do not think that the proceedings initiated under Section 67 is improper, illegal or that the actions projected before us were in any manner proceeded with, in an arbitrary or high-handed fashion. Appeal dismissed.
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