'Refusal To Consider' Different From 'Rejection For Reasons': Kerala HC Directs State Tax Officer To Reconsider Plea Seeking Copies Of Witness Statements

The Kerala High Court has held that there is a clear distinction between refusing to consider an application and rejecting one with reasons, while finding that an officer should specify reasons while denying copies of statements made to the parties in an investigation. 

Justice Bechu Kurian Thomas observed that since it is settled law that reasons should be reflected in the order, the Proper Officer should have given reasons for refusing to grant copies of the witness statements: 

"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 petitioners 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. 

When the petitioners were served with the summons to give evidence in the enquiry, a request was made 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 by a curt reply:-

"Now the case is being (sic) under investigation stage. At this juncture, the request... for issuing copy of statements...cannot be considered." 

Aggrieved by the Proper Officer's refusal to consider their request, they approached the Court. 

Advocates Harisankar V. Menon and Meera V. Menon argued on behalf of the petitioners 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 and hence they are entitled to get copies of such documents.

The respondents represented by Senior Government Pleader Thushara James pointed out 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. 

They asserted that the issuance of copies or sharing of extracts of the statements would prejudicially affect the investigation. 

The Court recalled that Section 67 of the CGST/KGST Act lays down that the person from whose custody any documents are seized are entitled to make copies, except in cases wherein the opinion of the Proper Officer taking such copies will prejudicially affect the investigation.

It was found that although in the counter affidavit it is pleaded by the respondents that issuing copies will prejudicially affect the investigation, no reason was made clear in the impugned order. 

In fact, the order revealed that the only reason stated for denying the request for issuance of a copy of the statements recorded is that "it cannot be considered".

Therefore, the Proper Officer did not have a case that giving a copy of statements would cause prejudice to the investigation, he merely refused to consider the request, the Court noted. 

"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." 

However, while refusing to consider the request of the petitioners, the Proper Officer failed to state any reason. The officer had not mentioned that giving a 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 that the distinction between reasoned rejection and refusal to consider sought to be canvassed on the basis of a document seized u/s 67(5) of the Act. 

Accordingly, the Judge took the view that the impugned order was liable to be set aside. The State Tax Officer was thereby directed to reconsider the application of the petitioners for giving a copy of the statements already obtained in the course of the investigation and pass fresh orders.

As such, this request of the petitioners was allowed by the Court. 

The petitioners had also sought a transfer of files of the case, but had withdrawn their request later on. Therefore, the petitions were allowed in part. 

Case Title: Thomas Mathew v. State Tax Officer & Ors

Citation: 2022 LiveLaw (Ker) 31

Click Here To Read/Download The Order