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2024 (3) TMI 680 - HC - GSTSearch and seizure - Challenge to order of prohibition dated 25th March, 2023 issued under Section 67(2) of the CGST/WBGST Act, 2017 - HELD THAT - Admittedly in this case it is noticed that a prohibitory order has been passed by invoking the first proviso to Section 67(2) of the GST Act. Admittedly, the assessee has not approached the respondent no. 1 for release of goods under Section 67(6) of the GST Act and the Hon ble Supreme Court in the case of THE STATE OF UTTAR PRADESH ORS. VERSUS M/S KAY PAN FRAGRANCE PVT. LTD. 2019 (12) TMI 95 - SUPREME COURT has clearly highlighted that the assessee in order to seek release of the goods must invoke the provisions of the GST Act to seek release of the goods. Insofar as the judgment delivered in the case of BEST CROP SCIENCE PVT. LTD. VERSUS SUPERINTENDENT, CGST, DELHI WEST AND ORS. 2023 (9) TMI 996 - DELHI HIGH COURT , it is found that the Hon ble Delhi High Court taking note of the provisions of Section 67(7) of the GST Act has observed that the prohibitory order cannot be permitted to continue indefinitely. In this case it may be relevant to consider that the assessee has not approached the respondents under Section 67(6) of the GST Act and as such, there is no reason for this Court to interfere at this stage save and except, if any application is made by the assessee with the respondent no. 1 in terms of Section 67(6) of the GST Act, the same shall be considered in accordance with law. The writ petition is disposed off.
Issues:
The issues involved in the judgment are the quashing of the order of prohibition dated 25th March, 2023 issued under Section 67(2) of the CGST/WBGST Act, 2017, and the request for release of seized goods covered under the prohibitory order. Quashing of Prohibition Order: The petitioners filed a writ petition seeking the quashing of the prohibition order issued under Section 67(2) of the GST Act. A search and seizure procedure was initiated at the petitioners' registered place of business, followed by the issuance of a prohibitory order on 25th March, 2023. The petitioners participated in the proceedings and requested the release of the seized stock of timber. The respondent's office, in response, informed about the issuance of a show-cause notice under Section 122 of the GST Act without addressing the release request. Legal Arguments - Petitioners' Counsel: The petitioners' advocate highlighted Section 67(2) of the GST Act, empowering the proper officer to search and seize goods. He also referred to the first proviso to Section 67(2), allowing for the issuance of prohibitory orders. Citing Section 67(7), he argued that goods seized must be returned if no notice is given within six months. Relying on legal precedents, including judgments by the Supreme Court and the High Court of Delhi, the advocate contended that the goods should be returned due to the delayed show-cause notice. Legal Arguments - Respondents' Counsel: The respondents' advocate referred to Section 67(7) and Section 67(6) of the GST Act. He argued that the provision for return of goods applies only if no seizure notice is issued within six months. He pointed out that the petitioners did not seek provisional release of goods as per Section 67(6) and did not approach the respondents for the same. Judgment and Observations: The Hon'ble Court noted the prohibitory order passed under Section 67(2) and the petitioners' failure to request the release of goods under Section 67(6) of the GST Act. Citing a Supreme Court judgment, the Court emphasized that the assessee must follow the prescribed mechanism for seeking release of goods. Referring to a Delhi High Court judgment, the Court stated that the prohibitory order cannot continue indefinitely, but since the petitioners did not approach the respondents under Section 67(6), there was no basis for interference. The Court disposed of the writ petition with no costs, directing that any future application by the assessee for release of goods under Section 67(6) shall be considered in accordance with the law. Conclusion: The judgment primarily focused on the procedural aspects of seeking release of seized goods under the GST Act, emphasizing the need for compliance with the prescribed mechanisms. The Court highlighted the importance of following legal provisions and mechanisms for the release of goods, as outlined in the relevant sections of the GST Act.
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