2019 (10) TMI 1184 - HC - GST

High Court Criticizes CGST Search & Seizure Excesses, Emphasizes Rule of Law

The Gujarat High Court, in a judgment by Justice Harsha Devani, found that officers conducting a search and seizure under section 67 of the CGST Act ... Search and Seizure - the officers had stayed at the premises and had examined the phone calls that were received by the family members and had recorded their phone calls. - sub-section (2) of section 67 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Sub-section (2) of section 67 of the CGST Act empowers the authorised officer to search and seize goods, documents or books or things. Sub-section (4) of section 67 empowers the officer authorised under sub-section (2) to seal or break open door of any premises or to break open any almirah, electronic devices, box, receptacle in which any goods, accounts, registers or documents of the person are suspected to be concealed, where access to such premises, almirah, electronic devices, box or receptacle is denied. Thus, the officers concerned were authorised to seize such books, goods, documents, or things which were found at the premises. Sub-section (2) of section 67 does not empower the officer concerned to record statements of family members through force or coercion or to record their conversations in their mobile phones. The manner in which the officers have conducted themselves by overreaching the process of law and acting beyond the powers vested in them under sub-section (2) of section 67 of the CGST Act needs to be deprecated in the strictest terms. Therefore, a proper inquiry needs to be made in respect of the action of the respondent officers of staying day and night at the premises of the petitioner without any authority of law. The first respondent Commissioner of State Tax, Ahmedabad shall carry out a proper inquiry in the matter and submit a report before this court on or before 13th November, 2019 - Stand over to 13th November, 2019. Issues:Violation of rights during search and seizure under section 67 of the CGST ActAnalysis:The judgment by the Gujarat High Court, delivered by Justice Harsha Devani, addressed the issue of violation of rights during a search and seizure conducted under section 67 of the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioner's advocate submitted an affidavit, while the Assistant Government Pleader presented a confidential report detailing the search proceedings at the petitioner's premises. The court reviewed the report, which revealed that officers had stayed at the premises for several days, conducted searches, seized records, and questioned family members. However, the actions of the officers extended beyond the scope of their authority under section 67 of the CGST Act.The court highlighted the provisions of section 67 of the CGST Act, emphasizing that it empowers officers to search and seize goods, documents, or books, but not to use coercive measures such as recording statements of family members or their conversations. The judgment criticized the officers for their prolonged stay and continued questioning of family members, which exceeded the limits set by the law. The court deemed the officers' actions as unauthorized, unlawful, and an abuse of power, emphasizing the need for a proper inquiry into their conduct.In response to the violation of rights during the search and seizure, the court directed the Commissioner of State Tax, Ahmedabad, to conduct a thorough inquiry and submit a report by a specified date. The court also instructed the registry to send a copy of the order to the Commissioner of State Tax and the Chief Secretary of the State to prevent similar incidents from occurring in the future. The judgment underscored the importance of upholding the rule of law and ensuring that actions taken by authorities are within the bounds of legal provisions to safeguard individuals' rights during such proceedings.