The Kerala High Court held that there exists a clear difference between 'refusing to consider' an application and 'rejecting with reasons'.

The single-Judge bench of Justice Bechu Kurian Thomas observed that an Officer should mention reasons while denying request made for copies of statements to the parties in an investigation.

Brief Facts of the Case

The petitioners herein were taxpayers against whom summons was issued relating to an investigation on the supply of goods under the Central Goods and Services Tax Act, 2017. 

It is the settled proposition of law that an affidavit cannot enlarge or supplement reasons which the order did not contain at the time it was issued. Reasons recorded in the pleadings of an affidavit cannot contribute to the validity of an order when impugned. The reason, must of necessity, be reflected in the order impugned. When the petitioners were served with the summons to give evidence in the enquiry, they made a request to furnish a copy of statements already given by other persons who were summoned as part of the enquiry.

By the impugned proceedings, the Proper Officer refused to consider the requests and replied that the case is under investigation stage and thus the request cannot be considered.

Aggrieved of the proceedings, the petitioners are pleaded before the Court.

High Court Obsevation

The Learned Counsel of the petitioner agrued that furnishing a copy of statements recorded by the officer to the person against whom the enquiry is being conducted is part of the constitutional right of every individual.

On the other hand, the Learned Counsel of the respondent however remarked that in their counter affidavit submitted before the Officer, it was stated that the information gathered during the enquiry was very crucial and sensitive in nature and sharing extracts of the statements would prejudicially affect the investigation.

The Court refrred to Section 67 of the CGST/KGST Act which deals with inspection, search, seizure and arrest and noted that the person from whose custody any documents are seized shall be entitled to make copies which the officer may permit, except in cases where, in the opinion of the Proper Officer taking such copies will prejudicially affect the investigation.

The Court went onto note that in the counter affidavit it is pleaded by first respondent that issuing copies at this stage will prejudicially affect the investigation, such a reason is absent in the impugned order and the only reason stated for denying the request for issuance of a copy of the statements recorded is that “it cannot be considered”.

"The Proper Officer did not have a case in Ext.P10 that giving copy of statements would cause prejudice to the investigation. He refused to consider the request."

The Court mentioned that it is the settled proposition of law that an affidavit cannot enlarge or supplement reasons which the order did not contain at the time it was issued. Reasons recorded in the pleadings of an affidavit cannot contribute to the validity of an order when impugned. The reason, must of necessity, be reflected in the order impugned and referred SC Ruling in Commissioner Of Police, Bombay Vs. Gordhandas Bhanji, 1951 Latest Caselaw 52 SC and Mohinder Singh Gill & ANR Vs. The Chief Election Commissioner, New Delhi & Ors, 1977 Latest Caselaw 227 SC

In view of this, the Court held tha while refusing to consider the request of the petitioners, the Proper Officer failed to state any reason. The officer had not mentioned that giving copy of the statements would cause prejudice to the investigation. The request of the petitioners for issuing copies of statements already recorded by the investigating officer, as mentioned earlier was refused to be considered, the Court noted.

"There is a marked distinction between refusing to consider and rejecting an application for reasons. The Proper Officer ought to have considered the request and either granted copies of the statements or rejected such requests for reasons to be recorded, rather than avoiding consideration of such request. The distinction sought to be canvassed on the basis of a document seized under section 67(5) of the Act and a statement given as evidence pursuant to a summons under section 70 of the Act, though impressive at first blush, may not be of any avail to the petitioners on a deeper consideration. Section 70 of the Act relates to the power to summon persons to give evidence. By the legislative reference in section 70 of the Act, the power to summon persons or produce documents can be treated as akin to the power in the Code of Civil Procedure, 1908 (for short 'the CPC'). It is only the power that is referable to the CPC."

 The Court further reflected on Order XVI of the CPC which deals with power to summon witnesses to give evidence or for production of documents and stated that the contention raised by the petitioners on the basis of section 70 of the Act stands rejected.

"By conferring the power of summoning a witnesses to give evidence or to produce a document as provided in Order XVI of the CPC, the nature or character of the investigation or inquiry being conducted under Chapter XIV of the Act will not be changed. The power to summon or produce a document is distinct from the nature of proceedings conducted. Merely because the source of power to summon witnesses and power to direct production of documents is referable to CPC, that does not alter the nature of investigation or inquiry being conducted. It remains to be an investigation or inquiry." 

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Sheetal Joon