Evidentiary Value Of Kachcha Parchis, Electronic Data Must Be Examined By GST Appellate Authority: Delhi High Court

The Delhi High Court has held that questions concerning the admissibility, authentication and evidentiary value of electronic data and handwritten 'kachcha parchis' relied upon in a GST case should be raised before the statutory appellate authority rather than examined in writ proceedings.

The division bench of Justices Anil Kshetarpal and Shail Jain was dealing with a batch of writ petitions challenging orders passed under the Central Goods and Services Tax (CGST) Act against several entities allegedly linked to an investigation into M/s Arora Communication.

The investigation was initiated by the Anti-Evasion Branch following intelligence that Arora Communication was allegedly engaged in trading electronic goods without proper tax invoices and payment of GST.

A search conducted at the residential and business premises associated with its proprietor allegedly led to the recovery of electronic devices, including a laptop, handwritten kachcha parchis and other documents.

According to the Department, analysis of the electronic data extracted from the laptop, along with the handwritten slips, disclosed details of alleged unaccounted transactions and entities to whom goods had purportedly been supplied without GST invoices.

Accordingly, a show cause notice under Section 74 CGST Act was issued against Arora Communication and various purchasers, including Petitioners.

Petitioners however challenged the proceedings, contending that the case against them was substantially based on unverified electronic records and handwritten kachcha parchis recovered from a third party, without independent investigation or corroborative evidence connecting them with the alleged transactions.

They also argued that the electronic material could not be relied upon in the absence of the certificate contemplated under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023.

The Court, however, declined to examine these issues in exercise of its writ jurisdiction.

“Whether the requirements of Section 63 of the BSA stood satisfied, whether the electronic material was duly authenticated, what evidentiary value is to be attached to the electronic records and handwritten kachcha parchis, and whether such material is sufficient to sustain the allegations against the respective Petitioners are all questions which bear directly upon the merits of the adjudication,” it reasoned.

The Court added that the same would require examination of the original investigation and adjudication record and appreciation of the evidence relied upon by the Department, which falls beyond the scope of writ jurisdiction.

“The submission that there was no independent corroborative material, such as invoices, transport documents, stock records or financial records, connecting the Petitioners with the alleged transactions, cannot be examined in isolation in these proceedings…Whether such material constitutes sufficient corroboration and whether the findings recorded by the adjudicating authority can be sustained on the basis thereof are matters appropriately falling within the jurisdiction of the appellate authority,” it added.

As such, the Court dismissed the petitions.

For Petitioners: Advocates Tanmay Mehta, S. Islam, Lalit Valecha, Rashmi Gagoi and Aqsa Khan for Petitioners in Items No. 93 to 98; Advocates SK Sharma, Tejas Singh, Yogender Kumar and Saurabh Dagar for Petitioner in Item No. 99.

For Respondents: SPC Raghvendra Shukla with Advocates Manu Shukla, Asra Chandra, Nandita and Sampan for R-1 in Item No. 93; SCC Anushree Narain with Advocates Apurv Yadav and Naman Choula for Respondent in Items No. 94, 96 and 97; SCC Gibran Naushad with Advocates Suraj Shekhar Singh, Anish Mishra and Hasan Haider for R-2 in Items No. 93, 95 and 98; SPC Rahul Sambher for R-2 in Item No. 97; SCC Monica Benjamin along with Advocates Laiba Arif and Prerika Narang for R-2 to R-4 in Item No. 99; CGSC Arunima Dwivedi with Advocates Himanshi Singh and Monalisha Pradhan for UOI in Item No. 101; SPC Harsh Pratap Shahi with Advocates Dev Pratap Shahi and Hitaishi Tulsyan for R-1 in Item No. 101; Standing Counsel Shlok Chandra with Advocates Parikshit Singh Bhati and Lolita D Crasta for R-2 and R-3 in Item No. 101.