2023 (11) TMI 714 - HC - GST

Seeking provisional release of goods seized - search and seizure operations that were conducted in the premises of the petitioner - It is the respondents case that the petitioner had invested the sale proceeds of such clandestine trade in purchasing silver - HELD THAT - The silver seized by the respondents was released to the petitioner at their office on 09.11.2023. The office of the respondent is located at the fourth and fifth floor of the building at Plot No. 6, Arrow Corporate Tower, Kaushambi, Ghaziabad. However, after releasing the said silver, the respondents had once again, seized the same from the petitioner at the ground floor of the said premises. Thus, in effect, the petitioner was permitted to carry the silver out of the office but a seizure was once again effected on the ground floor of the said premises. Clearly, the respondent had no ground to believe that silver was being secreted at the said premises. The fact that the petitioner was in possession of the silver, is not disputed, this is the subject matter of the proceedings in the present petition - the respondents have carried out the charade of releasing the silver from their office and then attempting to repossess the same at the ground floor. Thus, subject to the petitioner depositing the sum of ₹16,00,000/- with the Registry of this Court, within a period of one week from today, the respondents shall release and deliver the silver in question, at the residence of the petitioner on 20.11.2023 at 10 30 a.m. - List on the date already fixed, that is, 30.11.2023.

Summary

Issues:
The issues involved in the judgment are the legality of search and seizure operations, the power of the Proper Officer to seize goods under Section 67 of the Central Goods and Services Tax Act, 2017, and the subsequent release and re-seizure of silver by the respondents.

Search and Seizure Operations:
The petitioner challenged the search and seizure operations conducted at their premises in Delhi and Kanpur, where silver was seized without any belief that the petitioner was trading in silver. The respondents alleged that the petitioner invested proceeds from clandestine trade in purchasing silver, leading to the seizure of unaccounted wealth. The court noted that the power to seize goods under Section 67(2) of the CGST Act is limited to goods liable for confiscation, not valuable assets representing unaccounted wealth.

Power of Proper Officer to Seize Goods:
The court reiterated that the Proper Officer can seize goods only if there is a reason to believe they are liable for confiscation under Section 67 of the CGST Act. The term "goods" covers movable property subject to taxable supplies, not valuable assets representing unaccounted wealth. The court emphasized that the power to seize documents or things is limited to those relevant to proceedings under the CGST Act.

Release and Re-Seizure of Silver:
Following court orders to release seized silver, the respondents initially complied but later re-seized the silver without grounds to believe it was being secreted. The court viewed this as an attempt to overreach its orders. The respondents claimed the silver was liable for confiscation under Section 130 of the CGST Act due to alleged involvement of the petitioner in trading silver. The court directed the release of silver upon the petitioner depositing a specified sum with the Registry.