In W.P. (C) 12304/2023 -DEL HC- Delhi High Court questions whether special judge can order roving & fishing inquiry under GST Act; stays GST search
Justice Vibhu Bakhru & Justice Tara Vitasta Ganju [19-09-2023]

Read Order: Bhagat Ram Om Prakash Agro Pvt. Ltd. & Anr V. The Commissioner Central Tax GST Delhi- East

Chahat Varma

New Delhi, October 9, 2023: The Delhi High Court has recently stayed a GST search authorized by a Special Judge and has issued notice to the GST Department. The Court raised concerns over whether a Special Judge can order a roving and fishing inquiry under the Goods and Services Tax Act (GST Act).

The stay order comes in response to a writ petition filed by Bhagat Ram Om Prakash Agro Pvt. Ltd. and Prem Shankar Verma, who had been searched by the GST Department on the basis of directions issued by a Special Judge to the Income Tax Department, GST Department, and Enforcement Directorate. The directions were intended to investigate the source of Rs. 50,00,000 received by the petitioners.

The petitioners argued that the search authorization was illegal as the proper officer had no reason to believe that the conditions specified under Section 67(1) of the GST Act were complied with.

The division bench of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju observed that it had serious reservations whether any such roving and fishing inquiry under the GST Act could have been directed to be conducted by the Special Judge. Further, it was noted that the proper officer can authorize the search only if the conditions specified in Section 67 of the Act are fulfilled.

The court directed the GST Department to file a counter affidavit within two weeks.

The matter has now been listed for further hearing on 17.10.2023.