In a notable order reinforcing procedural safeguards during tax investigations, the Bombay High Court has allowed videography of summons proceedings conducted by GST authorities, while permitting the presence of legal counsel at a visible but non-audible distance during questioning.
A Division Bench of Justices G.S. Kulkarni and Aarti Sathe passed the order while hearing a writ petition filed by Tuesonpower International Pvt. Ltd. and another under Article 226 of the Constitution. The court recorded that the petitioner had confined its relief to two limited safeguards: permission for legal counsel to remain present at a visible but not audible distance during questioning, and videographic recording of the proceedings at the petitioner’s cost.
The summons in question were issued under Section 70 of the Central Goods and Services Tax Act, 2017, in relation to an inquiry into input tax credit claimed by the company.
Arguments advanced for the petitioner
Appearing for the petitioner, advocate argued that videography would function as a neutral evidentiary mechanism protecting both the taxpayer and the department. He relied on an earlier coordinate bench ruling in Suumaya Industries Ltd. vs Union of India, where similar safeguards had been accepted with the consent of the revenue, including video recording of statements and the presence of counsel at a non-audible distance.
He assured the court that the petitioner would cooperate fully with the inquiry and emphasised that there was no intention to evade tax. The petitioner also highlighted that the transactions under scrutiny were supported by tax invoices, reflected in GSTR-2B returns, and payments were made through banking channels.
Revenue’s objection
Counsel appearing for the respondents opposed the plea, arguing that the petitioner must cooperate with the inquiry and furnish all documents as required. The department contended that the premises where the proceedings were conducted were already equipped with CCTV cameras, and therefore additional safeguards such as videography were unnecessary.
Court’s reasoning and directives
After examining the record, the bench observed that the request made by the petitioner could have been appropriately considered by the concerned officials. The court noted that the inquiry arose from summons issued in relation to input tax credit claimed on purchases from suppliers whose GST registrations were later cancelled.
The bench also recorded that Petitioner No. 2 was undergoing treatment for cancer and had expressed willingness to cooperate with the investigation, which weighed in favour of granting the limited relief sought.
The court ordered that, statements recorded during the summons inquiry shall be video graphed at the petitioner’s expense. The petitioner’s advocate may accompany them but must sit at a visible yet non-audible distance and cannot interfere with the recording of statements. The order has been passed in the peculiar facts and circumstances of the case and shall not be treated as a precedent.
What are broader implications?
Legal observers say the ruling reflects the courts’ continuing engagement with procedural fairness in GST investigations. By permitting videography and limited lawyer presence without interfering with the inquiry, the court sought to balance investigative authority with safeguards.
While the bench clarified that the order is not precedent-setting, experts said that similar directions in past matters suggest that courts are willing to allow safeguards where taxpayers demonstrate cooperation and specific circumstances justify such relief.
For taxpayers and practitioners, the decision underscores that constitutional courts may intervene to shape the manner of investigation, even as the underlying inquiry continues under the GST framework.
