TaxTMI 
TaxTMI 
2024 (3) TMI 836
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....Suhas Parab, Additional Government Advocate. For the State in MCA No. 134/2024 : Ms Akshata Bhat, Additional Government Advocate. For the State in MCA No. 133/2024 : Mr Deep Shirodkar, Additional Government Advocate. For the Respondent Nos. 5,6 and 7 in all the applications : Ms Asha Desai, Senior Standing Counsel with Ms N. Volvoikar, Advocate ORDER : 1. Heard learned Counsel for the parties. 2. The learned Counsel for the parties submitted that a common order could dispose of all these civil applications by treating Civil Application No. 132/2024 in Writ Petition as the lead application. They submitted that all these civil applications are based on the same facts, and even the relief prayed for is the same. Accordingly, we propose to dispose of all these civil applications by a common order by treating Misc. Civil Application No. 132/2024 in Writ Petition No. 715/2023 as the lead matter. 3. The petitioners in Writ Petition No. 715/2023 and connected matters have challenged the constitutional validity of Section 15(5) of the CGST Act and Rule 31-A of the CGST Rules. The petitioners also challenged the show cause notice dared 27.092023, inter alia, on the grounds that such....
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....tion ("Documents Sought"). The said inspection has however remained incomplete till date. 29. Based on the Impugned SCN and annexures thereto, the Petitioners are seeking inspection of the Documents Sought, which illustratively include (but are not limited to) the following: i. Documents to show how and what "specific intelligence" was developed by Respondent No. 6 (as referred in the Impugned SCN at para 2), ii. Documents to show on what basis the said "specific intelligence" was developed by Respondent No. 6, iii. Documents to show the reasoning behind engaging Indian Statistical Institute, Hyderabad ("ISI"), iv. Dara provided by Respondent No. 6 to ISI, v. Communication between Respondent No. 6 and ISI, vi. Investigation report prepared by Respondent No. 6, its agents, officers and/or any other concerned personnel, vii. Documents relied upon by Respondent No. 6 to formulate a 'reasonable belief' under Section 67 of the CGST Act for conducting search(es) at the premises of Petitioner No. 1, viii. Inter-departmental communication pertaining to the investigation, ix. Any other documents relevant to and pertaining to the investigation basis whic....
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....d that the petitioners should also be furnished with the inter-departmental communications pertaining to the investigations, the official records, and the file notings maintained by the sixth respondent. He submitted that the respondents could not be the Judges of the relevancy and sensitivity of such documents as was held in J.N. Meena v/s Union of India through the Secretary, Ministry of Finance, Department of Revenue and Ann 2022 SCC OnLine Bom 1071. Mr Khambata submitted that the denial of this information/inspection would amount to a breach of principles of natural justice and fair play. 14. Mr Khambata finally submitted that the petitioners must also be furnished data/information shared by respondent no. 6 with the Indian Statistical Institute (ISI). He submitted that denial of this information/data raises serious concerns about transparency and fair play. He relied on Reliance Industries Limited V/s. Securities and Exchange Board of India and Ors. (2022) 10 SCC 181. 15. Ms Asha Desai submitted that these civil applications are not maintainable because the petitioners did apply before the Adjudicating Authorities for information and documents, and most of such information a....
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....ance of show cause notices does not mean that the process of investigation has been concluded. She submitted that such issuance is only one of the steps to arrive at a final decision. As such, any disclosure of information at this stage would impede the process of investigation. Ms Desai also relied on Kanwar Natwar Singh V/s. Director of Enforcement & Anr. 2010 (13) SCC 255, to focus on the scope of the duty of adequate disclosure in such matters. 20. For all the above reasons, Ms Desai submitted that these applications ought to be dismissed. 21. The rival contentions now fall for our determination. 22. From the pleadings in these civil applications, we find that the respondents have disclosed all the Relied-upon Documents (RUD) to the petitioners. In addition, several Non-Relied-upon Documents (non-RUD) have also been furnished to the petitioners. Ms Desai, by referring to affidavits filed on behalf of the respondent, also submitted that the show cause notices would be disposed of based on the RUDs and Non-RUDs, copies of which have been duly furnished to the petitioners. 23. After perusing the averments in paragraphs 28 and 29 of the civil application, we cannot completely d....
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....identifying the purpose of disclosure one of the crucial objectives of the right to disclosure is securing the transparency of instructions. The claims of third-party rights vis-a-vis the right to disclosure cannot be pitted as an issue of public interest and fair adjudication. The creation of such a binary reduces and limits the purpose that disclosure of information serves. The Adjudicating Authority should prima facie establish that the disclosure of the report would affect third-party rights. The onus then shifts to the noticee to prove that the information was necessary to defend his case appropriately. 27. T. Takano (supra), no doubt, holds that the Board should determine such parts of the investigation report under Regulation 9, which have a bearing on the action which is proposed to be taken against the person to whom the notice to show cause is issued and disclose the same. It can redact information that impinges on the privacy of third parties. It cannot exercise unfettered discretion in redacting information. On the other hand, such parts of the report necessary for the noticee to defend his case against the action proposed against him need to be disclosed. Needless to ....
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....ommercial interests of the third parties etc. which cannot be disclosed. As submitted above, the contents of the intelligence/information have already been covered in great detail in the SCN. 4. It is respectfully submitted that on conclusion of investigation proceedings, the investigation report is prepared by the investigating team and on acceptance of the same by the competent authority, the said investigation report culminates into a detailed SCN which is sent to the notice. Therefore, the investigation report is in the SCN. Hence, SCN issued to the noticee is a self-contained document containing entire facts related to investigation, the relevant provisions of the law contravened by the etc." 33. In paragraph 3, the plea is that the files contained sensitive information, a source of intelligence, and commercial and business information of third parties that cannot be disclosed. Further, the contents of the intelligence/information have already been covered in great detail in the impugned show cause notices. Still, paragraph 3 does not clearly indicate whether any investigation report was prepared based on the "specific intelligence" received by the respondents. 34. In par....
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....ties and unrelated transactions, respondents can always furnish such investigation reports to the petitioners by redacting such portions and such information. However, a blanket refusal to furnish an investigation report would not be proper. Nothing in the decisions of Jagannathdham Superstructures Pvt. Ltd. (supra) or Kanwar Natwar Singh (supra) would justify the non-disclosure of the investigation report, even in the redacted form. 38. In so far as the inter-departmental communication pertaining to the investigation and the office records/file notings are concerned, we agree to a great extent with Ms Desai that this is nothing but a fishing expedition or an all-encompassing roving inquiry, possibly to avoid or at least delay the adjudication proceedings. The attempt, at least prima facie, is to drown the Adjudicating Authorities with all such applications and objections and, if possible, to lay a foundation for some eventual challenge by alleging failure of natural justice. 39. The above request on behalf of the petitioners has to be considered in the context of the detailed show cause notices issued to them. The show cause notices refer to and rely upon several documents, all ....
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.... insist they be informed of the reason for engaging ISL. This does not appear to be proper. Besides, the information furnished by the petitioners was supplied to the ISI. The affidavit states that most of the information furnished by the petitioners and supplied to the ISI was given to the petitioners. Therefore, to say that most of the information was furnished means that all the information was not furnished, and on that basis, to allege failure of natural justice is nothing but an attempt to lay a foundation to allege failure of natural justice eventually. 44. Therefore, no directions are called for in the context of inter-departmental communications or records/file notings or data/information shared with ISI. Records show that respondents have furnished all the documents relied upon in the show cause notices and even allowed the petitioners' inspection based upon which they retrieved the Non-Relied Upon Documents. The show cause notice is detailed and refers to the material/documents based upon which it is issued. All this, coupled with the statement/submission that the show cause notices would be disposed of by reference to the documents furnished to the petitioners, sugg....