Petitioner | M/S. R.J. Trading Co. |
Respondent | Commissioner of CGST, Delhi North & Ors. |
Decision by | Delhi High Court |
Date of order or Judgement | 20- July- 2021 |
Citation no. | W.P.(C) 4847/2021 2021 (7) GSTPanacea 15 HC Delhi |
Hon’ble Judge | Justice Rajiv Shakdher Justice Talwant Singh |
Decision | In Favour of Assessee |
The order of prohibition and seizure, would show that the inspector has exercised the power on his own and not based on the authority of the proper officer i.e. the Additional Commissioner. The orders of seizure and prohibition are set aside.
Authorization Accorded by Additional Commissioner-Facts of the Case
The Petitioner (RJT) is in the business of trading in cigarettes which are supplied to it by authorised dealers of well-known manufacturing companies. The officers of Directorate General of Goods and Services Tax Intelligence (DGGI), Ahmedabad Zonal Unit, (AZU) visited its premises located in Delhi backed by an authorization issued by Joint Director, DGGI (AZU) under Section 67(2) of the CGST Act. On the day of visit office of RJT was closed and hence officers sealed the office. These events were recorded by a Senior Intelligence Officer (SIO), DGGI (AZU) in the panchnama. Summon’s were issued to one of the partners of RJT, to give evidence, for the production of documents and for making a statement before the concerned SIO. The concerned officer detained the corrugated boxes (cartons). A seizure document was drawn up in Form GST INS -02 in respect of documents that had been seized. The seizure of documents in the exercise of powers under Section 67(2) of the CGST Act.
Argument Before Court
Authorization Accorded by Additional Commissioner-Petitioner’s Contention
It is claimed by RJT that it has deposited tax from time to time as required under the GST act. The details of the tax deposited and copies of challans have been filed along with the writ petition. The petitioner had sought costs and direction to release the goods detained under the prohibition order by declaring the search conducted on the premises of RJ Trading Co. as illegal since it did not align with the Section 67 of the CGST Act.
Authorization Accorded by Additional Commissioner-Respondent’s Argument
The officers of CGST Gautam Budh Nagar Commissionerate with the assistance of CGST Delhi North Commissionerate conducted a search at RJT’s premises. Seized some goods as no documents/records could be produced to prove the genuineness of the purchase transaction. The documents produced were not found relevant vis-a-vis the goods available in stock. The stock register which ought to have been maintained by RJT at the premises was not provided. Therefore, based on a reasonable belief that the goods found lying at RJT’s premises were not backed by corresponding purchase documents, Hence, they were “seized”.
Delhi High Court Held
Authorization Accorded by Additional Commissioner-The Delhi High Court after considering the facts opined that the Additional Commissioner, CGST Delhi North Commissionerate exercised his powers for according authorization to conduct search and seizure, at RJ Trading Co.’s premises, even though the jurisdictional ingredients were absent. The Hon’ble High Court said that the officers should bear in mind that the search and seizure power conferred upon them is an intrusive power, which needs to be wielded with utmost care and caution. Consequently, both the orders of seizure and prohibition are set aside.
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