2024 (6) TMI 81 - HC - GST

Legality and validity of the seizure order - unauthorized inspection search and seizure of their godown - whether the Bureau of Investigation for Economic Offences (BIEO / BI (EO)) is having any authority to conduct such search and seizure in the given facts of the present case that the search and seizure was conducted on the basis of a suspicion/information that the petitioners are storing stolen/smuggled areca nuts ? - HELD THAT - From a bare perusal of the notification dated 11.09.2003 it is clear that the said notification was issued in exercise of power under subclause (s) of the Section 2 of the CrPC 1973. By virtue of the aforesaid notification it was declared that the office of the IGP Bureau of Investigation (Economic) Offence Assam Guwahati shall be a police station and it shall include within its limit the whole of Assam for the purpose of investigation so far relating to the offences enumerated in the Schedule II of the notification. In terms of section 110 of the Customs Act 1962 relates to search and seizure of Goods documents and things and empowers certain specified customs officers to conduct such search including smuggled goods. Such power is not delegated to BI (EO) either under the Notification dtd. 11/03/2003 or by any other notification - It is also well settled that if any jurisdiction is conferred upon an authority to do certain acts or to exercise certain powers such jurisdiction is to be exercised by the said authority within its limit as conferred. A jurisdictional fact is a fact which must exist before such an Authority assumes jurisdiction over a particular matter. In the present case the jurisdictional fact to investigate by BIEO must relate to the offences as enumerated in the Schedule-II of the Notification. If the jurisdictional fact does not exist the BIEO authority cannot act. If an authority wrongly assumes the existence of such a fact and acts such action can be questioned by a writ of certiorari. Such jurisdictional facts are absent in the admitted background and pleading by the respondent that the seizure was carried out suspected to be stolen/smuggled goods. Therefore this court is of the unhesitant view that the BI (EO) is not empowered to carry on the search and seizure and it wrongly assumed the existence of such fact to investigate and make search and seizure. Accordingly the impugned search and seizure dated 27.07.2017 stands set aside. Be that as it may if there is any shortage in handing over the seized areca nuts bags in terms of this court s earlier order the petitioner shall be at liberty to approach appropriate forum available under law for redressal of their grievances including for compensation. The bank guarantee furnished by the petitioner in terms of this court order dated 09.08.2017 be released to the petitioner by the respondent No. 2 forthwith. Petition allowed.

Summary

Issues:
Challenging legality and validity of seizure under CGST Act, authority of Bureau of Investigation for Economic Offences (BIEO) to conduct search and seizure, jurisdictional facts for investigation by BIEO.

Analysis:
The writ petitions challenge the seizure of goods by the seizing authority despite the petitioners being registered under the CGST Act. The petitioners argue that their tax liabilities were cleared under the VAT Act until 30.06.2017, shifting their obligations to the GST Act from 01.07.2017. The power of inspection, search, and seizure under the CGST Act is vested in an officer not below the rank of Joint Commissioner.

The seizure of 7290 bags of Dried Areca Nuts by the BIEO on 27.07.2017 is contested as unauthorized and unnecessary by the petitioners. They claim that the seizure was based on irrelevant grounds, and the bona fide of the seizure is questioned due to alleged threats by the authorities. The petitioners argue that such actions are unwarranted, especially during the nascent stage of the GST regime.

The respondent authorities justify the search and seizure by citing information about stocking stolen/smuggled goods in the godown. They claim that the seizure was carried out in the presence of a Magistrate and samples were sent for testing. However, the petitioners challenge the authority of the BIEO to conduct such actions based on the notification dated 11.09.2003, which empowers the BIEO to investigate economic offences and not general offences like theft or smuggling.

The court concludes that the BIEO exceeded its authority by conducting the search and seizure based on suspicion of stolen/smuggled goods, which do not fall under the jurisdiction of the BIEO as per the notification. The court sets aside the impugned search and seizure dated 27.07.2017. The petitioners are advised to seek redressal for any discrepancies in the return of seized goods and the release of the bank guarantee.

In summary, the judgment addresses the legality of the seizure under the CGST Act, the authority of the BIEO to conduct search and seizure, and the importance of jurisdictional facts in determining the validity of such actions. The court emphasizes that jurisdiction must be exercised within the limits conferred by law, and any action beyond the authorized scope can be challenged through appropriate legal channels.