The Calcutta High Court has held that the non-disclosure of sensitive information gathered by Directorate General of Goods and Services Tax Intelligence (DGGI) forming the basis of search operation is not violative of principles of natural justice.
The bench of Justice Rajarshi Bharadwaj has observed that sensitive information gathered by the Intelligence Department, forming the basis of a search operation, should not be disclosed to the petitioners. Withholding sensitive information does not violate the principles of natural justice. The source of information collected by the Intelligence Department of Revenue is crucial for maintaining confidentiality and the integrity of investigative processes.
The bench relied on the decision of Supreme Court in the case of T. Takano v. Securities and Exchange Board of India reported in (2022) 8 SCC 162, in which it was emphasized the importance of safeguarding sensitive information obtained during investigations. The Court recognized that such reports may encompass a wide range of market-sensitive information, including details of financial transactions and interactions with other entities. Disclosure of such information could infringe upon third-party rights, destabilize the securities market, and affect investor interests. The Court, therefore, clarified that the principles of natural justice do not entail a right to indiscriminate or unrelated disclosures, particularly where sensitive third-party interests are involved.
The petitioner made a representation before the Additional Assistant Director, Directorate General of Goods and Services Tax Intelligence, Kolkata and the Joint/Additional Commissioner, CGST & CX Kolkata North Commissionerate for handing over the relied upon documents which were used for preparing the show cause notice but till date the documents which were relied upon are not issued to the petitioner.
The department contended that the prayer of asking for the relied upon documents are nothing but the inter- departmental intelligence reports which cannot be handed over to the petitioner because these are the sources of information, by revealing the source or identity of these sensitive information, the commercial interests of third parties and the safety of the country will be at stake which is not permissible under law.
The department argued that the investigation report is, in effect, the show- cause notice itself. The show-cause notice is a comprehensive and self-contained document encapsulating all the material facts arising out of the investigation. There exists no independent investigation report distinct from the show-cause notice, and therefore, the latter should be treated as the investigation report for all intents and purposes.
The department stated that the show cause notice contains exhaustive details of the investigation. All Relied Upon Documents (RUDs) have already been furnished to the petitioners to ensure transparency. The show- cause notice clearly stipulates that the adjudication proceedings would be based on the documents that have been furnished to the petitioner and there will be no breach of the principles of natural justice or fair play.
The court held that the withholding of sensitive information in the present case is justified and does not breach the principles of natural justice as all the relied upon documents have already been handed over to the petitioner by the department.
Case Details
Case Title: Deltatech Gaming Limited Vs. Union of India & Ors.
Case No.: WPA 30044 of 2024
Date: 20.12.2024
Counsel For Petitioner: J. P. Khaitan, Sr. Adv.
Counsel For Respondent: A. Ray
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