Business premises including the computer system of the assessee shall be unsealed, subject to the condition that he co-operates in the inspection/search of the premises in question

Facts: In this matter, the search was conducted  by the Competent Authority at the registered office of the petitioner under section 67 of the CGST Act, also the competent authorities sealed the business premises of the petitioner by invoking Sec 67(4) of the CGST Act. The Petitioner thereafter filed the Writ Petition for unsealing the business premises. 

The Petitioner contended that due to administrative convenience, the day-to-day business activities of the petitioner were also being carried out at godown of the petitioner, considering the same, the GST officials has begun conducting the search in the said premises. It is the grievance of the petitioner that the competent officers have sealed the said premises without authority of law.

Issue: Whether the competent authority shall be directed to unseal the premises of the assessee.

Held: The Hon’ble High Court of Karnataka stated with reference to Section 67(4) of the CGST Act, 2017 which contemplates that the officer authorized under sub-section (2) shall have the power to seal or break open the door of any premises or to break open any almirah, electronic devices, box, receptacle in which any goods, accounts, registers or documents of the person are suspected to be concealed, where access to such premises, almirah, electronic devices, box or receptacle is denied. 

However, the computer system wherein the business transaction of the company was stored, including the tally software stopped functioning all of a sudden along with internet connection abruptly. In the absence of tally information and internet connection, complete verification of the books of accounts of the company was not possible as the same was maintained in the tally software in the server. The directors of the petitioner company did not put any efforts to set out the said disruption. 

Therefore, the Court is of the view that the justice would be sub-served in directing the Revenue to unseal the premises which is convenient to the petitioner and further the petitioner shall co-operate for inspection/search of the premises in question, including the computer system.

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