2021 (2) TMI 335 - HC - GST

Inspection search seizure and arrest - Prohibition Order - Subsection (2) of Section 67 of the GST Act 2017 - HELD THAT - The plain reading of Sub-section (7) of Section 67 of GST Act would indicate that from the date of seizure under Subsection (2) if notice is issued within six months thereof the seized properties will have to be returned to the person from whose possession they were seized. There is a proviso for the purpose of extending the said period on sufficient cause. Mr. Dave the learned AGP upon instructions from the concerned department makes a statement that no notice has been issued till this date as contemplated under Sub-section (7) of Section 67 of the Act. There has been no extension also of the time period as provided under the proviso. It can be said that the impugned order outlive its life. The same is hereby quashed and set aside. The articles seized shall now be returned to the writ-applicant if not returned till this date - Application disposed off.

Summary

Issues:
Challenge to order of prohibition under GST Act, 2017.

Analysis:
The writ-application under Article 226 of the Constitution of India sought the quashing of an order of prohibition issued by the State Tax Officer. The order in question was passed under Subsection (2) of Section 67 of the GST Act, 2017, related to inspection, search, seizure, and arrest. The petitioner prayed for the issuance of a writ of mandamus, certiorari, or any other appropriate writ to set aside the order of prohibition. Additionally, the petitioner requested a stay on further proceedings and any other orders deemed fit in the interest of justice.

The learned counsel for the writ-applicant was unable to join the video conference, but the learned AGP representing the respondents provided insights into the case. The attention of the Court was drawn to the impugned order of prohibition dated 4th July 2019. Section 67 of the GST Act deals with the power of inspection, search, seizure, and arrest. The specific focus was on Subsection (2) of Section 67, which empowers the proper officer to search and seize goods, documents, or books if deemed necessary for proceedings under the Act.

Further, the Court was directed to Subsection (7) of Section 67, which states that if no notice is given within six months of the seizure of goods, the goods must be returned to the person from whom they were seized. The provision allows for an extension of this period on sufficient cause. The AGP confirmed that no notice had been issued within the stipulated time frame, nor had the time period been extended. Consequently, the Court held that the impugned order had exceeded its validity and ordered the seized articles to be returned to the writ-applicant if not already done so. As a result, the writ-application was disposed of accordingly.