2021 (3) TMI 1086 - HC - GST

Search and seizure - retraction of statements - reconciliation of the alleged variation in the stock - HELD THAT - Although there is a general statement in paragraph 3 retracting the statement made by him, there is no specific denial vis-a-vis paragraph 14 though there is a reference to certain other paragraphs, i.e., 15, 19, 20 and 22. For whatever it is worth, the concerned officer will take this communication into account as well. Application disposed off.

Summary

Issues:
1. Challenge against prohibition order dated 15.03.2021 under Central Goods and Services Act, 2017.
2. Allegations of mismatch between physical stock and stock register.
3. Lack of opportunity for reconciliation and coercion during inspection.
4. Dispute over the value of goods and formation of opinion for confiscation.
5. Retraction of statement by the officer present during inspection.
6. Petitioner's entitlement to seek release of goods under Section 67(6) of the Act.
7. Exercise of power by the concerned authority and approach to the High Court under Article 226 of the Constitution.

Analysis:
1. The writ petition challenged a prohibition order dated 15.03.2021 under the Central Goods and Services Act, 2017. The inspection at the petitioner's premises revealed a mismatch between the physical stock and the stock register, leading to allegations by respondent nos. 2 to 4. The petitioner contended that no opportunity was given for reconciliation and that the order was an overreach, prohibiting dealings with goods worth nearly ?8.00 crores.

2. Ms. Lakshmikumaran argued that the impugned order lacked the authority's opinion for confiscation of goods and highlighted coercion during the inspection. On the other hand, Mr. Narayan stated that the petitioner did not seek reconciliation and emphasized the value of the mismatched goods as approximately ?3.00 crores. He mentioned the petitioner's right to approach under Section 67(6) of the Act for provisional release of goods.

3. The petitioner disputed the formation of opinion by the concerned authority for confiscation, prompting the High Court intervention under Article 226 of the Constitution. After hearing both parties, the Court directed the petitioner's representative to reconcile the stock variation with the concerned officer by a specified date, ensuring a fair hearing and a speaking order.

4. A retraction of the officer's statement was presented, with specific denials regarding the value of goods. The Court acknowledged the retraction and directed its consideration by the concerned officer. The interlocutory application was closed, emphasizing the importance of due process and fair adjudication in matters of goods confiscation and release under the Act.