2026-VIL-866-GAU
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SGST High Court Cases

GST – Validity of sealing of premises after the completion of search and seizure - Power and Scope to seal under Section 67(4) of the CGST Act, 2017 - Petitioner's office premises were sealed during search and seizure operations allegedly for preventing tampering of evidence and conducted an inspection under Section 67 of the CGST Act, 2017 - The Petitioner contended that the sealing was unauthorized as no access was denied and the power to seal can only be exercised when access to premises is denied - HELD - The power under Section 67(4) of the Act is not a standalone provision and is dependent upon Section 67(2) which empowers the officer to search and thereupon seize documents or books or things. The power conferred under Section 67(4) 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) ceases to exist. The said power can only be exercised where access to such premises, almirah, electronic devices, box or receptacle is denied – Further, the documents or books or things seized should have a correlation to usefulness or relevancy to any proceedings under the Act. An air conditioner or a printer or refrigerator or inverter or batteries cannot be construed as “things” liable to confiscation under confiscation under Section 130 of the CGST Act - The sealing of the petitioner's office premises and keeping the premises under seal after the completion of search and seizure cannot be sustained in law. The records do not show that access to the Petitioner's premises was denied at any point. The power under Section 67(4) is for the purpose of carrying out the search and seizure and not for using the premises as a store for retaining the seized goods or documents or things - The sealing of the office premises is illegal and unauthorized and contrary to the mandate of Section 67(4) of the Act - The Respondents are directed to de-seal the premises and hand over possession to the petitioner forthwith - At the time of de-sealing and handing over possession of the office premises to the Petitioner, the Respondents are granted the liberty to take custody of the books or documents if the same are still necessary for examination and for any inquiry or any proceedings – The writ petition is disposed of - Scope of Section 67(2) and First Proviso thereof - Petitioner's office equipment including air conditioners, refrigerators, inverters, batteries, laptops and printers were made subject of an Order of Prohibition restricting removal or dealing with such goods - The Petitioner contended that these goods were merely office equipment used for providing tax consultancy services and were not goods liable to confiscation - HELD - The first proviso to Section 67(2) of the Act refers only to goods and not documents or books or things. The Order of Prohibition issued under the Rules is only limited to goods which are liable for confiscation. The term goods is defined in Section 2(52) of the Act to mean every kind of movable property liable to confiscation under Section 130 of the Act. The goods mentioned in the Order of Prohibition, namely, air conditioners, refrigerators, inverters, batteries, laptops and printers cannot under any circumstances be said to be goods liable for confiscation under Section 130 of the Act – An air conditioner or a printer or refrigerator or inverter or batteries cannot be construed as documents or books or things. The goods not liable for confiscation cannot be seized or retained - Custody of Seized Documents, Books and Things - Petitioner's office documents and electronic items seized under Section 67(2) of the were handed over to the Petitioner with a direction that the Petitioner shall not remove or part with such items - HELD - Section 67(2) of the Act empowers search and seizure and upon seizure of goods or books or documents or things, the said items should remain in the custody of the Proper Officer or the Authorized Officer. Sub-section (2) permits the Proper Officer or the Authorized Officer to search and seize the documents or books or things and the custody of the seized items remain with such officers as the same would be useful for or relevant to any proceedings under the Act. The second proviso to Section 67(2) stipulates that 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 - The act on the part of the officer in handing over custody of the books or documents or things seized to the Petitioner gives an impression that the documents or books or things seized were no longer necessary else the custody would not have been handed over. The custody of the books or documents or things should always remain with the Proper Officer or Authorized Officer till issuance of notice under the Act and under no circumstances beyond thirty days from the date of notice - The action of handing over custody of seized documents and books and things to the Petitioner cannot be sustained in law.
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