Minor Irregularities will not vitiate Search and Seizure done in good faith, Rajasthan HC

Minor irregularities in the conduct of search and seizure would not vitiate a government raid altogether if it is carried out in good faith. The Rajasthan High Court recently had occasion to reiterate this principle. The Court emphasised,.“It is trite that an error committed by the Officer in seizing the documents which may ultimately be found not to be useful for or relevant to the proceeding under the Act will not by itself vitiate the search. .If prima facie there are grounds to justify the belief of the officer in conducting search, this Court would have no reason not to accept such belief, although it may or may not have entertained such belief. .Whether or not the concerned officials of the respondents had ‘reason to believe’ cannot be scrutinised by this Court under ‘legal microscope, or with an over-indulgent eye which sees no evil anywhere within the range of its eyesight.”.The Bench of Justices Govardhan Bardhar and Mohammad Rafiq made the observation in a petition filed against raids conducted by the Directorate General of Goods and Services Tax (GST) Intelligence in August 2017..Senior Standing Counsel Kinshuk Jain and advocate Satish Agarwal appeared for the GST authorities. Advocate JK Mital assisted by Advocates Vagish Kumar Singh and Anupam Agarwal appeared for the petitioner, Sanwaria Sweets Private Limited (Sanwaria Sweets)..The raids were conducted against one, Ajay Sharda, the Director Sanwaria Sweets. His father, Natwar Lal Sharda is also a Director in this company..In 2017, the GST authorities received information that Natwar Sharda was involved in hawala transactions and evasion of excise duty to the tune of Rs 63 crores. The evasion was allegedly facilitated through the operation of an illegal Pan Masala manufacturing business in Chhattisgarh. While investigating this case, the authorities carried out search and seizure in the premises belonging to Natwar Sharda in January and August 2017..In connection with the same case, a raid was also conducted at the premises of Ajay Sharda on August 27, 2017. These raids were conducted invoking the provisions under Section 12F read with Section 18 of the Central Excise Act, 1944 and Section 100 (4) (5) of the Code of Criminal Procedure (CrPC) 1973..This eventually prompted Ajay Sharda to file a petition in Rajasthan High Court challenging the raid. It was Sharda’s case that the raid was arbitrary, malicious, motivated, illegal and contrary to the Excise Act. A major contention made by Sharda concerned the seizure of original documents during the raid. These documents included title deeds of various immovable properties. Sharda submitted that the government did not have the jurisdiction to seize the same under the Excise Act..It was also pointed out that these documents were seized without following the appropriate procedure. The Government later submitted that they had made an inadvertent error in seizing these documents without signing/sealing them..However, the Court has now clarified that such irregularities would not invalidate the search and seizure, if there is material to indicate that the Government had carried it out in good faith, under a reasonable belief that the same was justified. Inter alia, the Court referred to the Madras High Court judgment in Chitra Construction Company v Additional Commissioner of Customs to note,.“Even if there had been certain minor irregularities committed by the authorities concerned, relating to the procedural aspects of the search seizure operation, they cannot be held to be substantial or sufficient in nature to declare the search and seizure operations illegal and void.”.This position also finds support in various other case laws including Income Tax Officer v M/s Seth Brothers & Others. Notably, in that case, it was also observed that merely because a large number of documents are seized, it does not imply that all documents seized are irrelevant or that the action of the officer is mala fide..In any case, the Court went on to observe that it is not expected to substitute its own opinion on whether a raid is justified. If there is sufficient material to indicate that, prima facie, the government was acting in good faith, the Court would not have any further say in the matter..In this regard, the cases of State of Gujarat v Shri Mohanlal Jitamaiji Porwal and Another, Pukhraj v DR Kohli, Income Tax Officer v M/s Seth Brothers & Others, among others, were taken note of. In view of the observations made in these cases, the Bench concluded,.“Merely because some of the files that were seized by the search team contained original sale/title deeds of the immovable properties and the same were eventually returned back would not be sufficient to vitiate the entire action of the respondents because the material suggests that the officials of the respondents in doing so acted bonafide.”.The Court, therefore, dismissed Sharda’s challenge, while also noting that the GST officials had already returned to him the original documents seized. This was after another Bench of the Court had pulled up the government in this regard..Read the Judgment: