Signature Of the Person Present Obtained in Panchanama, Madhya Pradesh High Court Refuses Re-measuring of Stock

The division bench of Justice Sheel Nagu and Justice Maninder S. Bhatti perused the panchanama and observed that on the date of search itself, the amount of tax and a penalty were deposited by the petitioner as discrepancies were found in the stock, and thus there was no question of any kind of seizure.

The court noted that there were independent witnesses as well as the petitioner's own representatives who did not raise any objection as regards search. Thus, the filing of the application before the respondent/department to re-measure the stock was an afterthought.

The premises of the petitioner were searched at the instance of the revenue in exercise of powers conferred under Section 67 of the M.P. GST Act, 2017. Thereafter, the petitioner had certain grievances as regards the manner of search. The petitioner made an application for re-measuring the stock of coal lying in the premises and checked again as earlier, the team which carried out the search did not seize any material and left the premises.

The petitioner submitted that the order was being assailed as the search was not carried out in accordance with the provisions of Section 67 of the M.P. GST Act, 2017. The procedure as laid down in the Code of Criminal Procedure 1973, is applicable, which stipulates the search is required to be carried out in the presence of two witnesses. However, no independent witnesses were present and the respondent did not seize any material from the premises of the petitioner. As a result, the Revenue Department had to re-measure the stock of coal on the premises.

The department contended that the entire procedure was carried out in accordance with the law and that the search was carried out in the presence of independent witnesses. The petitioner cannot allege that the search was carried out in violation of statutory provisions because his nephew was also available at the time of search and signed the Panchnama.

The department submitted that during the course of the search, the liability was admitted by the petitioner itself. Therefore, the action to challenge the process was grossly misconceived.

The court held that the punchnama was produced on record by the petitioner itself. The panchnama revealed that a search team had reached the premises of the petitioner. At the premises, two people, including the nephew of the proprietor, were available, and signatures of all the people were obtained while carrying out the Panchnama. Then the stocks were checked there only. It was found that there were discrepancies in the stock which attracted the levy of tax. Hence, the petitioner out of his own free will deposited the amount of tax as well as a penalty of Rs.38,46,195/-.

"It is beyond comprehension that once the search team left the premises on 25/01/2022, the stock of coal would have remained untouched and not alienated during the subsequent period," the court said.

Case Title: Sanjay Trading Company Versus State Of Madhya Pradesh

Citation: 2022 LiveLaw (MP) 162

Counsel For Petitioner: Advocate Mukesh Agarwal

Counsel For Respondent: Advocate Darshan Soni

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