Being held to government authority is indeed normal. Being held accountable to government micromanagement and/or spying is not. The normal way for government to handle this stuff would be to issue a law saying that it is forbidden to spy on citizens and if you do spy on citizens you go to jail. The government going over all paperwork of a company is such a strange activity.

And how do you research for the formulation of such a law? Not really trying to defend anyone here with not much info, just it seems that asking parties for information about how the soup is made so you know how to regulate the making is pretty common, no?

A law that assumes things that are not available is evidently wrong. A judge will soon tell you that.

The government authority is a human. That's why it's a problem. People aren't perfect and might speak about what they saw.

And no, it's not normal to be required to have a business plan, much less disclose it.