M/s KASHISH OPTICS LTD.
Vs.
THE COMMISSIONER, CGST DELHI WEST & ORS.
P. (C) 7741/2022, CM APPL. 23664/2022 (Interim Relief) & CM APPL. 25690/2022 (Addl. Docs. )
DATED: MARCH 3rd , 2025
HIGH COURT: DELHI
Facts: The Petitioner has challenged the continued seizure of goods and documents by the GST authorities, seized under Section 67 of the CGST Act, during a search proceedings, on the grounds that the continued seizure of goods was unjustified and the authorities failed to provide sufficient cause for the extension of the seizure period and no opportunity of being heard or notice of extension of the seizure was provided to the Petitioner prior to the conclusion of the six-month period or approval of the said extension.
The department contended that the notice of confiscation dated 20 October 2021 was served upon the Petitioner on the same day by way of affixation, since none was available at the registered office premises and after the numerous calls to the Proprietor went unanswered, the complete SCN was pasted on the front side of the locked premises and panchnama was drawn.
The department also relied upon the relevant extracts of the note sheets, from which it can be gathered that a note prepared on 16 April 2021 proposing the extension of the period of seizure under Section 67(7) of the CGST Act, by a further period of six months upto 21 October 2021. It is during this period that the notice of confiscation referable to Section 130 came to be issued on 20 October 2021. The file noting would clearly evidence that there was a “sufficient cause” shown in the said noting which supported the order of seizure as well as the continuation of the same for a further period of six months.
However, the Petitioner contended that the notice for confiscation was not properly notified due to the absence of personnel at the registered premises and the absence of any notice or opportunity having been provided to the Petitioner prior to the extension being approved, would itself constitute sufficient ground to invalidate the seizure of articles.
Further, in terms of the Proviso to Section 67(7), the period of six months may, on sufficient cause being shown, be extended by the proper officer by a further period not exceeding six months. It is thus contended that the extension of the period during which the goods may remain seized cannot in any eventuality exceed a total period of 12 months.
ISSUE: Whether the continued seizure of goods and documents by the authorities under the CGST Act without issuance of notice for extension of such seizure is valid ?
HELD:
Opined that seizure of goods would have serious repercussions on the person whose goods are so seized and it is done for the limited purpose of securing the interest of the concerned authorities to conduct their proceedings.
Observed that Section 67(7) of the CGST Act is couched in a manner such as to ensure that the “sufficient cause will have to be shown” to the affected person. “Sufficient cause” cannot mean a reason known only to the concerned officials for extending the period of seizure to the detriment of the affected person, thereby denying him his entitlement to the goods.
Held that no notice of extension of the seizure was provided prior to the conclusion of the six-month period. The extracts relied upon by the Respondent 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.
Noted that the contents of the note-sheet would show that Proprietor had co-operated and participated fully in the investigation. It also shows that the concerned officer has not recorded the description of the goods properly and that is not a fault that can be attributable to the Petitioner. Clearly, the shoddy performance by the concerned officers in valuing the goods despite the complete cooperation of the Petitioner cannot be “sufficient cause”. Hence, it is difficult to accept the contention that the same could have formed “sufficient cause” for the purpose of extending the period of seizure.
Directed the Respondent to release the seized goods as per the stock upon the Petitioner making a deposit of the amount as per the valuation and to conclude the proceedings within a period of six weeks.
Permitted the Petitioner to take photocopies of all documents seized by the Respondents who are also directed to provide copies of all data that may be in electronic form within a period of four weeks. The Respondents may make copies of data in the seized electronic devices and release the devices to the Petitioner.
To read more about this Judgement, subscribe today: https://taxo.online/product/taxo-pro/
Already a subscriber, Click to LOGIN & refer to the TAXO GST CASE LAWS
Or
Call us:- +91 99101 67919, 99996 93426
