Facts of the Case:

In this case, a search and seizure operation was conducted at the petitioner’s principal place of business , during which books of accounts, documents and the CPU of the petitioner’s computer were seized by the GST authorities. Subsequently, an intimation under Section 74(5) of the CGST/WBGST Act, 2017 alleging short payment of tax on account of suppression of outward supplies was issued. 

The petitioner replied to the intimation and repeatedly requested the authorities to supply copies of the seized documents and return the seized CPU, contending that without access to such material, it would be impossible to effectively defend itself in the adjudication proceedings. Despite such requests, neither copies of the seized documents were furnished nor was the CPU returned. The petitioner approached the High Court contending that the entire adjudication was vitiated due to gross violation of principles of natural justice.

Issue:

Whether adjudication under Section 74 can be sustained when seized documents and electronic records are not made available to the taxpayer. Whether passing an order without affording a meaningful opportunity of hearing, especially after submission of a reply to the show cause notice, violates the principles of natural justice.

Held that:

The Court noted that it was undisputed that the seized documents and CPU had not been returned to the petitioner. In the absence of access to the very records on which the allegations were founded, the petitioner was deprived of a fair and effective opportunity to defend itself during adjudication. It was further observed that passing an adverse order without granting an opportunity of hearing after receipt of the petitioner’s reply amounted to a procedural impropriety.

The Court held that meaningful participation in adjudication proceedings necessarily presupposes access to seized documents and electronic records. The Court also accepted the petitioner’s contention that non-supply of seized material would render the statutory appellate remedy illusory, as the petitioner would be unable to frame proper grounds of appeal.

In the interest of justice, the impugned order was not allowed to be given effect to and was directed to be treated as an additional show cause notice. The petitioner was granted liberty to file a composite reply after receipt of the seized documents and CPU. The proper officer was directed to hand over the seized material within a stipulated time and thereafter conclude adjudication after granting a proper opportunity of hearing.

Case Name: M/s. Priti Builders Versus Deputy Commissioner of State Tax, Bally and Salkia Charge & Ors. dated 03.02.2026

To read the complete judgement 2026 Taxo.online 291