2023 (11) TMI 208 - HC - GST

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 ... Power of inspection, search and seizure - authorisation under Section 67(2) of the SGST/CGST Act 2017 - seizure of goods found during authorised search - relevance and usefulness of seized goods for proceedings under the Act - Form INS 01 authorising searchAuthorisation under Section 67(2) of the SGST/CGST Act 2017 - seizure of goods found during authorised search - relevance and usefulness of seized goods for proceedings under the Act - Validity of the seizure of gold ornaments recovered from the premises of M/s Sobhana Jewellery in the absence of a separate specific authorisation for those particular items or persons - HELD THAT: - The court examined sub section (2) of Section 67 and observed that an authorisation for search and seizure issued by an officer not below the rank of Joint Commissioner need not, and practically cannot, specify each particular item, document or person that might be discovered during the authorised search. The determinative requirement is that the officer granting the authorisation must have reasons to believe that goods, documents or things secreted at the premises would be useful or relevant to proceedings under the SGST/CGST Act 2017. In the present case the search of the business premises of M/s Sobhana Jewellery was authorised in Form INS 01 by the Joint Commissioner, the seized gold articles were found in a bag on those premises and discrepancies were noted between documents and actual stock. Given that the search authorisation covered the premises and that the seized items were found there and were capable of being relevant to proceedings, the contention that a separate or item specific authorisation was required was rejected. The seizure was therefore held to be within the scope of the authorisation under Section 67(2).The seizure of the gold ornaments discovered at the authorised search of M/s Sobhana Jewellery was valid and the challenge to it on the ground of absence of specific authorisation is dismissed.Final Conclusion: Writ petition dismissed; the search was authorised by the Joint Commissioner (Form INS 01) and the seizure of the gold ornaments found at the premises of M/s Sobhana Jewellery is held valid; petitioner may pursue remedies under the SGST/CGST Act and Rules if aggrieved. 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.