Gold seizure during authorized GST search upheld as valid under Section 67(2) without specific item authorization

Kerala HC dismissed a writ petition challenging the seizure of 1647.970 grams of gold ornaments under SGST/CGST Act 2017. The petitioner argued the seizure was illegal due to lack of specific authorization. The court held that Section 67(2) requires authorization for search of business premises, not for each specific item seized. Since the gold was found during an authorized search of the jewellery shop premises and the officer had reasonable belief of its relevance to GST proceedings, the seizure was valid. The court ruled that specific authorization for individual articles discovered during authorized search operations is not required.

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Issues:
The issues involved in the judgment are the legality of the seizure and confiscation orders passed by the respondents under the SGST/CGST Act 2017.

Seizure and Confiscation Order:
The petitioner filed a writ petition challenging the seizure order dated 26.05.2023 and the confiscation order dated 23.09.2023 passed by the respondents. The Intelligence Officer conducted a search at the business premises of M/s Sobhana Jewellery and found discrepancies in the stock of gold ornaments. A delivery challan issued by the petitioner for transporting gold ornaments was also examined. Subsequently, a show cause notice was issued to the petitioner demanding a penalty in lieu of confiscation of goods.

Legal Provisions and Authorisation for Seizure:
The petitioner contended that there was no proper authorization granted by the Joint Commissioner for the seizure of the gold ornaments. The petitioner argued that the seizure was null and void as it lacked authorization under Section 67 of the SGST/CGST Act 2017. The petitioner's counsel emphasized the requirements under Section 67(2) for seizing goods, documents, or books, stating that without proper authorization, the seizure is illegal and the subsequent proceedings should be quashed.

Court Analysis and Decision:
The Court examined Section 67(2) of the SGST/CGST Act 2017, which allows for search and seizure operations with prior authorization. The Court noted that the authorization for search and seizure operations need not specify the exact items to be seized but should be based on the belief that relevant goods or documents are secreted at a particular place. In this case, it was found that the search operation was authorized by the Joint Commissioner, and the petitioner's gold items were discovered at the premises of M/s Sobhana Jewellery. The Court rejected the petitioner's argument that there was no authorization for the seizure of gold ornaments, as the authorization was for the search of the premises where the items were found.

Conclusion:
The Court found no merit in the writ petition and upheld the legality of the seizure and confiscation orders. The petitioner was advised to seek recourse under the provisions of the SGST/CGST Act and Rules 2017 if aggrieved by the impugned order.

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