M/S. O.V.C. Jewelleries And Co. vs. The Assistant Commissioner (St)

Held

The Court held that the respondents cannot claim that a second authorization under Section 67(2) was given, as it was previously held in an identical case (W.P.No.41408 of 2018) that the revenue's contention regarding such authorization did not inspire confidence. The Court found that the entire seizure proceedings dated 07.02.2018, including the seizure order and the subsequent show cause notice for confiscation, were in violation of Section 67(2) of the APGST Act. The Court reasoned that the order of seizure did not satisfy the prescribed procedural safeguards. Consequently, the impugned seizure order dated 07.02.2018, passed by the first respondent, was declared unconstitutional and violative of Section 67(2) of the APGST Act. All consequential orders were deemed unsustainable. The Court allowed the writ petition, with liberty to the respondents to take fresh action in accordance with law if advised.

Facts

The petitioner, a registered dealer in jewelry, filed a writ petition challenging an order of seizure dated 07.02.2018, passed by the first respondent (an officer not being the jurisdictional Assessing Authority). The seizure occurred after an inspection conducted under Section 67(1) of the APGST Act, authorized by the third respondent. The petitioner contended that the seizure of 1912 jewelry items and records was done without a subsequent authorization under Section 67(2) of the Act. The respondents, in their counter affidavit, claimed that two separate authorizations were issued in Form GST INS-01, one under Section 67(1) for inspection and another under Section 67(2) for seizure, both prior to the respective actions. The petitioner argued that the seizure order and subsequent show cause notice dated 06.07.2018 were without jurisdiction.

Key Issues

1. Whether the seizure of goods and records by the first respondent, purportedly under Section 67(2) of the APGST Act, was valid without a specific authorization for seizure from the third respondent, the Joint Commissioner. 2. Whether the order of seizure dated 07.02.2018 and the subsequent show cause notice dated 06.07.2018 are vitiated by lack of jurisdiction and procedural irregularities. Petitioner's arguments: The petitioner argued that there was no explicit authorization under Section 67(2) for seizure and confiscation, rendering the seizure order and subsequent proceedings illegal. They relied on a previous order of the High Court in W.P.No.41408 of 2018, which dealt with identical facts and circumstances, where the Court found the revenue's contentions regarding authorization under Section 67(2) to be unconvincing and the seizure order to be lacking procedural safeguards. Respondents' arguments: The learned Government Pleader for Commercial Taxes argued, citing the decision in Dekars Fires & Security Systems Pvt. Ltd. Hyd. Vs. The Deputy Commissioner (CT), Secunderabad Division, Hyderabad and others, that even if the authorization under Section 67(2) was not properly given, the matter should be remanded to the jurisdictional authority to redo the necessary exercise.