TaxTMI 
TaxTMI 
2026 (8) TMI 845
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.... 3. The Petitioner is a tax consultant engaged in providing tax consultancy services in respect to GST, income tax and other allied taxation laws. The Petitioner is providing the aforesaid services under the name and style of the proprietorship firm, namely, "M/s Sharma and Associates". The office of the Petitioner is situated at Station Road, Bokajan Bazar, Bokajan, Diphu in the district of Karbi Anglong, Assam. 4. On 01.04.2026, the Respondent No. 4 on the strength of an authorization for search issued by the Respondent No. 3 under Sub-Section (2) of Section 67 of the CGST/AGST Act of 2017 in FORM GST INS-01, bearing Reference No. ZD180326024870F and Case ID AD1803260044938 dated 30.03.2026, conducted an inspection/search of the office premises of the Petitioner. 5. During the course of the said search, certain documents, digital signatures, electronic items, etc. were seized and an Order of Seizure in FORM GST INS-02 dated 01.04.2026 was issued by the Respondent No. 4 acknowledging the seizure of the items mentioned therein. 6. A copy of the said Order of Seizure in FORM GST INS-02 has been enclosed as Annexure-B to the writ petition. In Column No. B which relates to th....
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....p(M) vide order dated 08.04.2026. 11. The Petitioner, who in the profession of providing tax consultancy services in respect to GST, income tax and other taxation laws claims to have more than 200 clientele. On account of his Office being sealed, the said actions had put the Petitioner in a precarious position. Under such circumstances, the Petitioner submitted representations dated 24.04.2026 and 22.05.2026 to the Respondent Nos. 4 and 2 respectively requesting them to release the seized mobile phones and laptops at the earliest, de-seal/open the office premises for normal functioning, and withdraw/remove the Order of Prohibition. The same having not been considered, the Petitioner had approached this Court by filing the present writ petition. 12. The records reveal that this Court vide order dated 10.06.2026 issued notice making it returnable by two weeks. 13. An affidavit-in-opposition was filed by the Respondent No. 2 wherein various allegations have been made that the Petitioner is involved in passing fake Input Tax Credit (ITC) on the strength of fake tax invoices without actual supply of goods or services or both, in contravention of Clause (b) of Sub-Section (2) of....
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.... of the Petitioner's office premises was done not for the purpose envisaged under Section 67(4) of the Act of 2017, but for the purpose of storing the seized books/documents/things as well as the goods which were the subject matter of the Order of Prohibition. This aspect would be apparent from the fact that upon seizure of the books/documents/things, the custody had been handed over to the Petitioner. The learned counsel for the Petitioner further submitted that on account of administrative inconvenience in immediately taking away the seized books/documents/things, putting a seal on the office premises of the Petitioner could have been understandable. However, keeping the office premises sealed for more than four months as on date, the action on the part of the Respondent Authorities is not only in violation of the provisions of the Act of 2017, but is also unreasonable and irrational. The learned counsel, therefore, submitted that the Respondent Authorities should be directed to forthwith de-seal the Petitioner's office premises and permit the Petitioner to use the goods which are under the Order of Prohibition. 16. Mr. B. Choudhury, the learned Standing Counsel appear....
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...., not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of State tax to search and seize or may himself search and seize such goods, documents or books or things: Provided that where it is not practicable to seize any such goods, the proper officer, or any officer authorised by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer: Provided further that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act. (3) The documents, books or things referred to in sub-section (2) or any other documents, books or things produced by a taxable person or any other person, which have ....
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....provisions of the Code of Criminal Procedure, relating to search and seizure, shall, so far as may be, apply to search and seizure under this section subject to the modification that subsection (5) of section 165 of the said Code shall have effect as if for the word "Magistrate", wherever it occurs, the word "Commissioner" were substituted. (11) Where the proper officer has reasons to believe that any person has evaded or is attempting to evade the payment of any tax, he may, for reasons to be recorded in writing, seize the accounts, registers or documents of such person produced before him and shall grant a receipt for the same, and shall retain the same for so long as may be necessary in connection with any proceedings under this Act or the rules made thereunder for prosecution." 21. Sub-Section (2) of Section 67 of the Act of 2017 is the heart and soul of the power of search and seize conferred upon the Proper Officer or the Authorized Officer. A perusal of the said Sub-Section would show that the power of search and seizure can be carried out only by the Proper Officer, not below the rank of the Joint Commissioner or by any other Officer authorized in writing by the....
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.... something which acts as a legal residual category. It encompasses physical objects that do not fit in the definition of "goods". It may include electronic storage devices, hard drives, barcode scanners or secret storage receptacles. Just for example physical hardware, storage devices, containers etc. 28. This Court for the purpose of clarity finds it relevant to mention that the documents or books or things seized should have a correlation to usefulness or relevancy to any proceedings under the Act of 2017. This aspect is important inasmuch as an air conditioner or a printer or refrigerator or inverter or batteries cannot be construed as "things". These would come within the ambit of goods subject to the same being liable to confiscation. 29. Proceeding further on the analysis of Sub Section (2) of Section 67 of the Act of 2017, it is relevant now to analyze the two provisos to the said Sub-Section. It is well settled proposition of law that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision. It carves out an exception to the main provision to which it has been enacted as a proviso and to no other. In the case of C....
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.... or things. The custody of the seized documents or books or things remain with the Proper Officer or Authorized Officer as the same would be useful for or relevant to any proceedings under the Act of 2017. This aspect is also apparent from a reading of Sub-Sections (3), (5) and (11) of Section 67 of the Act of 2017. The exception carved out by the second proviso to Section 67(2) of the Act of 2017 stipulates that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under the Act of 2017. In other words, the requirement of law is that the books or documents or things shall be retained only for so long, as may be necessary for examination and for inquiry or proceedings under the Act of 2017. The terms "only for so long" puts a specific emphasis qua the necessity for retaining the books or documents or things. In the present context, it is astounding as well as surprising to note that the documents or books or things which were seized and described in the Annexure to the Order of Seizure in FORM GST INS-02, the custody was handed over to the Petitioner. The act on the ....
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....not a whisper either in the documents enclosed or in the affidavit filed by the Respondent No. 2 that access to the Petitioner's premises was denied. 39. It is the opinion of this Court that the power under Section 67(4) of the Act of 2017 is not for the purpose of using the said premises as a store for retaining the seized goods/books/documents/things. The said power is only conferred in furtherance to the power of search. It is also the opinion of this Court that the power conferred under Section 67(4) of the Act of 2017 can only be exercised upon initiation of the search proceedings and so long the search proceedings are continuing. Once the search proceedings have culminated with the seizure of the goods, documents, books or things, the power under Section 67(4) of the Act of 2017 ceases to exist in respect to the search conducted. 40. This Court also takes note of the stand taken by the Respondents in their affidavit. As already stated hereinabove, the stand so taken is that the Petitioner had been involved in various fraudulent practices for the purpose of providing fake invoices to various entities which have resulted in the commission of fraud and evasion of tax i....