2021 (4) TMI 973 - HC - GST

Clandestine removal - cigarette sticks - perishable goods or not - prohibition in removal of 190 cartons comprising 22,26,000 cigarette sticks - HELD THAT - Issue notice. Mr. Arunesh Sharma accepts service on behalf of Mr. Harpreet Singh, who appears on behalf of respondent nos. 1, 2, 4 and 5 while Mr. Aditya Singla accepts service on behalf of respondent no. 3. 4.1 Counter affidavits will be filed within four weeks. Rejoinders, thereto, if any, will be filed before the next date of hearing. 4.2 In the meanwhile, the petitioner is given liberty to approach the concerned officer for release of the goods qua which the prohibition order has been passed. List the matter on 25.05.2021.

Summary

Issues:
Challenge to order of prohibition under Section 67(2) of the CGST Act by the petitioner.

Analysis:
The petitioner challenged the order of prohibition dated 05.03.2021 passed by the Inspector, CGST Delhi (North) under Section 67(2) of the CGST Act. The petitioner contended that the concerned officer lacked the authority to issue the order and could only do so if an investigation was ongoing against the petitioner for specific reasons, such as suppression of transactions or contravention of tax laws. Importantly, the petitioner argued that the investigation was being conducted by the Gautam Budh Nagar Commissionerate, not the CGST Commissionerate, Delhi.

The petitioner's representative, Mr. Manish, highlighted that a search conducted by the DGGI Ahmedabad Zonal Unit on 14.02.2021 led to the seizure of a file containing stock register details. Subsequently, a search by the CGST Commissionerate, Gautam Budh Nagar, supported by an order issued on 05.03.2021, resulted in the impugned prohibition order. Mr. Manish pointed out discrepancies in the stock details seized and received post-search, emphasizing that the petitioner possessed 190 cartons of cigarette sticks as of 05.03.2021, which were now prohibited for removal.

The Court directed the concerned officer to consider the petitioner's application for release of the goods within five days. The officer was instructed to grant a personal hearing to the petitioner's representative, dispose of the application within three days of the hearing, and provide a speaking order. Notably, due to the COVID-19 curfew in Delhi, proceedings were to be conducted via video conferencing. The matter was listed for further hearing on 25.05.2021, allowing for the filing of counter affidavits and rejoinders within specified timelines.

This detailed analysis of the judgment showcases the petitioner's challenge to the order of prohibition, the arguments presented, the Court's directives to the concerned officer, and the procedural steps to be followed, all within the framework of the CGST Act and relevant legal considerations.