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TMI Blog2025 (3) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... n appropriate writ or order or direction to the Respondents to release all the documents and electronic devices resumed as per Annexure-A to the panchnama dated 22/23.10.2020 (Annexure P-3) from the registered premises of the Petitioner; and/or iii. Issue an appropriate writ or order or direction, to quash and set aside the impugned seizure order dated 23.10.2020 (Annexure P-5); and/or iv. Issue any other writ, order or direction in favour of the Petitioner, as this Hon'ble Court may deem fit and proper in the present facts and circumstances of the case, so as to ensure the ends of justice, or else the Petitioner shall suffer irreparably; and/or v. to grant costs of this Petition; 3. By a detailed order dated 07.01.2025, we had set out therein, the essence of the challenge raised in the present petition and the same reads as follows: - "1. The writ petitioner assails the continued seizure of articles pursuant to a panchnama which had come to be drawn on 22/23 October 2020 in connection with search proceedings initiated under the Central Goods and Services Tax, 2017. Pursuant to the search, an order of seizure came to be made by the respondents on 23 October 2020. This beco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2021. 6. Learned counsel for the writ petitioner has drawn our attention to the pari materia provisions which stand comprised in Sections 110 and 124 of the Customs Act, 1962 and to two significant decisions which were handed down by the Supreme Court in connection therewith in Assistant Collector of Customs v. Charan Das Malhotra, which was followed by I.J. Rao, Asst. Collector of Customs and Others. vs. Bibhuti Bhushan Bagh and Another. 7. In I.J. Rao, one of the issues which came to be flagged by the Supreme Court was whether the person from whom the goods had been seized would be entitled to be heard before the original period as contemplated in the statute for seizure and retention of articles could be extended. Dealing with this aspect, the Supreme Court in I.J Rao, while placing reliance on its decision in Charan Das Malhotra, held: - "9. It is apparent that goods liable to confiscation may be seized by virtue of Section 110 (1) but that those goods cannot be confiscated or penalty imposed without notice, opportunity to represent and to be heard to the owner of the goods or the person on whom penalty is proposed. This notice must be given within six months of the sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessitating extension, in which case the burden of proof would clearly lie on the customs authorities applying for extension to show that such extension was necessary. Taking these considerations into record the court held that the words "sufficient cause being shown" required an objective examination of the matter by the Collector. It was pointed out that ordinarily on the expiry of the period of six months from the date of seizure the owner of the goods would be entitled as of right to restoration of the seized goods, and that right could not be defeated without notice to him that an extension was proposed. The court rejected the contention that the continuing investigation would be jeopardised if such notice was given. The court held that the power under the proviso to Section 110 (2) was quasi-judicial, at any rate one requiring a judicial approach, and consequently the person from whom the goods were seized was entitled to notice before the period of six months envisaged by Section 110 (2) was extended. The point was considered again in Lokenath Tolaram v. B.N. Rangwani by a Bench of four Judges of this Court and the court referred to the view taken in Charan Das Malhotra b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of the goods. It is that right to the immediate restoration of the goods upon the expiry of six months from the date of seizure that is defeated by the extension of time under the proviso to Section 110 (2). When we speak of the right of the person being prejudiced or placed in jeopardy we necessarily envisage some damage or injury or hardship to that right and it becomes necessary to inquire into the nature of such damage or injury or hardship for any case to be set up by such person must indicate the damage or injury or hardship apprehended by such person. In the present case, one possibility is that the person from whose possession the goods have been seized may want to establish the need for immediate possession, having regard to the nature of the goods and the critical conditions then prevailing in the market or that the goods are such as are required urgently to meet an emergency in relation to a vocational or private need, and that any delay in restoration would cause material damage or injury or hardship either by reason of some circumstance special to the person or of market conditions or of any particular quality of requirement for the preservation of the goods. But ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of six months mentioned in Section 110 (2) of the Customs Act, and he is entitled to be heard upon such proposal but subject to the restrictions referred to earlier in regard to the need for maintaining confidentiality of the investigation proceedings." 8. It was thus contended that the absence of any notice or opportunity having been provided to the writ petitioner prior to the extension being approved on 16 April 2021, would itself constitute sufficient ground to invalidate the seizure of articles. 9. It was further contended that even the note sheet which is relied upon by the respondents does not refer to any germane material which may have been considered sufficient warranting extension of the period of seizure by a further period of six months. It was also the submission of learned counsel that in fact the seizure notice itself has come to be served after the maximum period of 12 months as is contemplated under Section 67 (7) and that the same was communicated to the writ petitioner for the first time under cover of a letter dated 24 March 2022. 10. It is submitted that according to the respondents, the purported notice of confiscation dated 20 October 2021 is stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper officer, not below the rank of Joint Commissioner, has reasons to believe that-- (a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or (b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a manner as is likely to cause evasion of tax payable under this Act, he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or the persons engaged in the business of transporting goods or the owner or the operator of warehouse or godown or any other place. (2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justification sought to be given by Ms. Narain in support of the impugned SCN, namely, that the judgment of the Hon'ble Supreme Court in the matter of I.J. Rao, Asstt. Collector of Customs & Ors. v. Bibhuti Bhushan Bagh & Another [I.J. Rao, Asstt. Collector of Customs & Ors. v. Bibhuti Bhushan Bagh & Another, (1989) 3 SCC 202] would not apply in the present case as the same is under the Customs Act, 1962 whereas, the present matter deals with the CGST Act, 2017. She would also contend that the scheme of Section 67 of the CGST Act is materially different from the scheme of Section 110 of the Customs Act as it stood then, and the application of the said judgment, in the present facts and circumstances, would constitute the reading of the said provisions of the Customs Act into the CGST Act. She would thus conclude that the said provisions are not pari materia. 12. We do not agree with the contention of Ms. Narain that the provisions of Section 110 of the Customs Act, referred to in the Judgment of I.J. Rao, are not pari materia with Section 67 of the CGST Act. 13. Both the Acts are fiscal Acts. Seizure of goods and documents is provided for in both the acts. Such seizure is only on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so incorrect as the Petitioner has clearly stated on various occasions that the said frames of spectacles would go out of fashion and resultantly, they would suffer huge losses. On that count too, Ms. Narain's attempt to distinguish the judgment of I.J. Rao from the facts and circumstances of the present case, would fail. NOTE-SHEET PROVIDES "SUFFICIENT CAUSE" FOR CONTINUED SEIZURE: 20. In the facts of the present case, no notice of extension of the seizure was provided prior to the conclusion of the six-month period. Reliance was instead placed on certain extracts which came to be filed as a consequence of our Order dated 22.08.2023 to contend that the same would constitute compliance of the mandate of "sufficient cause". 21. These extracts are not in the public domain and the Petitioner herein could not have had any opportunity to controvert or reply to the contents of the same. It clearly amounts to a unilateral act on the part of the Respondent by which the Petitioner would stand deprived of its statutory entitlement to the goods and for that reason alone would not satisfy the mandate of Section 67 (7) of the CGST Act. 22. The contents of the note-sheet would show that Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the Department's calls made to the proprietor of the Petitioner were not answered, resulting in the Department pasting the impugned SCN on the front of locked premises. 30. We do not propose to examine the factual aspect of the contentions as the said SCN is not even impugned herein. 31. In any event, the said SCN relates to the confiscation and not to the extension of seizure. The argument is, thus, not relevant for the present purposes. 32. Nevertheless, confiscation is the result of an investigation that establishes that there has been a contravention of the provisions of the Act. The same cannot be equated to the power of seizure under Section 67 which pertains to the power of the Officer to seize based on a "reason to believe". A notice under Section 130 cannot be equated to the mandate under Section 67 (7). 33. For the aforementioned reasons, we allow the Writ Petition and direct that the seized goods as per the stock summary annexed to the letter dated 17.06.2021 (Annexure P-6) be released upon the Petitioner making a deposit of the amount as per the valuation annexed to the letter dated 17.06.2021, with the Respondents. 34. Proceedings, if any, in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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