M/S. K.V. Ramalingayya Chetty Jewellers vs. The Assistant Commissioner (State Tax)

Held

The Court held that the respondents cannot now claim that a second authorization under Section 67(2) of the SGST Act was given, as it was previously held in similar cases that the Revenue's contention regarding such authorization did not inspire confidence. The Court found that the entire proceedings of seizure dated 07.02.2018, including the show cause notice for confiscation, violated the provisions of Section 67(2) of the Act. The order of seizure dated 07.02.2018 was found to be lacking the procedural safeguards prescribed. Consequently, the impugned seizure order and all consequential orders were deemed unconstitutional and violative of Section 67(2) of the SGST Act, rendering them unsustainable. The Court allowed the writ petition, stating that the respondents are at liberty to take fresh action, if advised, strictly in accordance with the procedure established by law. No issue was expressly left undecided.

Facts

The petitioner, a registered dealer in jewellery, filed a writ petition challenging an order of seizure dated 07.02.2018, passed by the first respondent. The first respondent, not being the petitioner's jurisdictional assessing authority, conducted an inspection of the petitioner's business premises on 07.02.2018, based on an authorization from the second respondent under Section 67(1) of the SGST Act. The petitioner alleges that the first respondent seized jewellery, books of accounts, and records on the same day without obtaining a further authorization from the second respondent under Section 67(2) of the SGST Act. Subsequent notices, including a show cause notice, were issued without mentioning any authorization under Section 67(2). The petitioner contends that these actions are without jurisdiction and arbitrary.

Key Issues

1. Whether the seizure order dated 07.02.2018, and all further proceedings pursuant thereto, are without jurisdiction, arbitrary, and illegal due to the alleged lack of a specific authorization under Section 67(2) of the SGST Act for seizure and confiscation, as argued by the petitioner. 2. Whether the respondents can rely on an authorization under Section 67(2) of the SGST Act when, in similar previous cases before this Court, such authorizations were found to be unconvincing and not inspiring confidence, as contended by the petitioner, citing W.P.No.41408 of 2018. Petitioner's arguments: The seizure order is unsustainable as no authorization under Section 67(2) was obtained for seizure and confiscation. The petitioner relies on previous High Court orders in identical circumstances where antedated or unconvincing authorizations under Section 67(2) were not accepted. Respondents' arguments: The learned Government Pleader referred to the decision in Dekars Fires & Security Systems Pvt. Ltd. Vs. The Deputy Commissioner (CT), Secunderabad Division, Hyderabad and others, suggesting that the jurisdictional officer may need to re-do the exercise and the matter should be remanded.