After the implementation of the Central Goods And ServiceAct, in 2017, there has been a multi-fold increase in thesearches being conducted by the department and there is noeffective watchdog which can keep an eye on these actionsundertaken by the departmental officers and neither there isany mechanism which can draw a line between the actscategorised as the ones done under the colour of duty andthe ones which can be simply termed as vindictive andinvasion of privacy and violation of Article 21 of theConstitution of India. The legal provisions qua search underthe CGST Act,

2017 should only be invoked in cases where the officer takesa view that the reason which he is going to form for search ishonest and reasonable and the same is not based upongrounds which culminates from mere suspicion, gossips,

rumours and the officer is duty bound to act upon direct orcircumstantial evidence and nothing contrary as held by theHon’ble Supreme Court and various Hon’ble High Courts ofour country. It is very much apt to mention that personalliberty of any individual is one of the most priceless freedomswhich has been guaranteed to every citizen of this countryunder the Indian Constitution, but invoking the power tosearch in an arbitrary manner without even considering thejudicial pronouncements of the higher courts and goingbeyond the scope of the intent of the Act is a state of affairswhich needs to be looked into and dealt with by a very stronghammer.

That the CGST Act, 2017 has made it mandatory to havereasons to believe for search and the same must be recordedin writing by the concerned officer. The Act also states thatthe search and seizure shall be in accordance with Section165 of Cr. P.C. The Hon’ble Supreme Court in SheonathSingh Versus AAC AIR 1971 SC 2451, observed that thewords

‘Reason to Believe’ suggest that the belief must be of an

honest and reasonable person and the same has to be basedupon reasonable grounds and the officer concerned must actupon direct or circumstantial evidence but not on meresuspicion, gossip or rumours. That it was further held that theconcerned officer would be acting without jurisdiction if thereason for his belief does not satisfy the conditions as statedunder Section 165 Cr.P.C. and further the reason to beliefmust have a link with the formation of belief.

That further the Hon’ble Supreme Court in ITO Vs SethBrothers UOI AIR 1970 SC 292 held that power of search isa serious invasion upon the rights, privacy and freedom oftaxpayer and therefore, the same must be exercised in strictaccordance with law and must be exercised bonafide.

That the intent of the legislature while drafting the CGST Act,

2017 was to make the process transparent and to free thetaxpayer from the terrorism of vindictive officers, hence theCGST Act, 2017 further states that Section 67(10) of theCGST Act, 2017 states that provisions of the Code ofCriminal Procedure, 1973, relating to search and seizure,shall, so far as may be, apply to search and seizure in relationto searches under the CGST Act, 2017 with a modificationthat the sub- section (5) of section 165 of the said Code shallhave effect as if for the word ‘Magistrate’, wherever it occurs,the word

‘Commissioner’ were substituted.

In order to meet the procedural requirements of Section 165

Cr.P.C., certain requirements have been laid down by thestatue qua the search, which are as follows:

1. The officer making investigation should havereason to believe that anything necessary forinvestigation may be found in a place withinhis jurisdiction
2. Such thing cannot be otherwise obtainedwithout undue delay
3. Grounds of such belief be recorded in writingand specifying the things for which search isto be made
4. The officer should search himself, if practicableor require any officer subordinate to him tomake the search
5. Authority to subordinate officer should be inwriting, specifying the place to be searchedand things for which the search is to be made
6. Copy of record made should be sent toMagistrate and should be furnished to theowner or occupier of the place searched, if heapplies for the copies and the copies shouldbe supplied free of cost.

That as per Section 26 of IPC, it is stated that a person is saidto have reason to believe only on sufficient cause to believethat thing but not otherwise. The Hon’ble Supreme Court inthe following matters took a similar and consistent view:

1. Calcutta Discount Co. Ltd. Vs. ITO AIR 1961 SC 372
2. ​S Narayanappa Vs. CIT AIR 1967 SC 523
3. Pratap Singh Vs. Director of Enforcement, FERA(1985) 155 ITR 166 (SC)
4. Tata Chemicals Vs. CC (2015) 52 GST 94
5. State of Uttar Pradesh Vs. Aryaverth Chawl Udyog (2016) 91 VST 1 (SC 3 member bench)

In the case of N. Nagendra Rao Vs. State of AP (1994) 6 SCC 205 it was further held that forming an opinion

qua reasons to believe has to be based upon materialon record and the same cannot be arbitrary, capriciousor whimsical and the same view Was reiterated in thecase of Ganga Saran Vs. ITO (1981) 130 ITR 1.

The reason to believe must not be on the basis of suspicionand the same has to be on reasonable grounds and goodfaith, which is a view taken by the Hon’ble Apex Court in thecase of ITO Vs. Lakhmani Mewal Das AIR 1976 SC 1753.

That the Hon’ble Delhi High Court in the matter of L R GuptaVs. UOI (1992) 194 ITR 32 held that the reason to believemust be backed by adequate material and not on assumptionand whims as reason to believe has a wider scope thanreason to suspect.

That further in Gurmukh Singh Vs. Union of India 1984 (18)ELT 274 Hon’ble Punjab & Haryana High Court held that thesearch cannot be based on mere suspicion. Further it washeld that where the search was conducted and certain articleswere seized but the articles/materials so seized could onwhich the department is relying upon could give rise tonothing other than a suspicion, then the said action of searchis termed as for no jurisdiction.

CONCLUSION:

At the end it can be concluded that the officers under theCGST Act, 2017 are duty bound to record the reasons tobelieve qua search in a proper manner and in accordancewith the provisions of the CGST Act, 2017 r.w. relevantprovisions of Cr.P.C and the reasons so formed by theconcerned officer must be valid, strong and has to be on thebasis of concrete evidence and not on mere suspicion orgossip and invoking the power to search the premises of anytaxpayer or any person has serious consequences and is aserious blow and is an invasion in privacy of the person whichis contrary to Article 21 of the Constitution of India.