Court quashes GST prohibition order for lack of notice

The Court held that the order of prohibition issued under the GST Act, 2017 exceeded its validity as no notice was given within the prescribed period, and no extension was granted. Consequently, the Court ordered the seized articles to be returned to the petitioner. The writ-application seeking the quashing of the order of prohibition was disposed of in favor of the petitioner.

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Issues:
Challenge to order of prohibition under GST Act, 2017.

Analysis:
The writ-application under Article 226 of the Constitution of India sought the quashing of an order of prohibition issued by the State Tax Officer. The order in question was passed under Subsection (2) of Section 67 of the GST Act, 2017, related to inspection, search, seizure, and arrest. The petitioner prayed for the issuance of a writ of mandamus, certiorari, or any other appropriate writ to set aside the order of prohibition. Additionally, the petitioner requested a stay on further proceedings and any other orders deemed fit in the interest of justice.

The learned counsel for the writ-applicant was unable to join the video conference, but the learned AGP representing the respondents provided insights into the case. The attention of the Court was drawn to the impugned order of prohibition dated 4th July 2019. Section 67 of the GST Act deals with the power of inspection, search, seizure, and arrest. The specific focus was on Subsection (2) of Section 67, which empowers the proper officer to search and seize goods, documents, or books if deemed necessary for proceedings under the Act.

Further, the Court was directed to Subsection (7) of Section 67, which states that if no notice is given within six months of the seizure of goods, the goods must be returned to the person from whom they were seized. The provision allows for an extension of this period on sufficient cause. The AGP confirmed that no notice had been issued within the stipulated time frame, nor had the time period been extended. Consequently, the Court held that the impugned order had exceeded its validity and ordered the seized articles to be returned to the writ-applicant if not already done so. As a result, the writ-application was disposed of accordingly.

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