Anopsinh Kiritsinh Sarvaiya vs. State Of Gujarat

Facts

The petitioner, Anopsinh Kiritsinh Sarvaiya, claims to be an agriculturist and owner of a godown (No. 14) at Marketing Yard, Gondal, which he leased to five entities for storing agricultural produce like cotton bales and yarn. On November 17, 2018, CGST authorities sealed the godown under Section 67 of the CGST Act. Sealing memos were issued on November 17 and 19, 2018, citing reasons such as "authorized person not present," "wrong ITC," "collected tax wrongly & not deposited," "try to neglect searching team," and "non-co-operation." The petitioner argued that the seal has been in place since 2018 without further action, causing him prejudice as the owner. He sought the quashing of the sealing memos and the removal of the seal.

Held

The Court directed the GST officials to visit the godown on February 10, 2020, at 2:00 PM, break open the seal, and conduct a search with a Panchnama. If goods liable to confiscation or relevant documents were found, they could be seized. Following this exercise, the petitioner would be allowed to take possession of the godown. The petitioner was directed to be present with ownership documents, but the Court noted that the authorities should not be overly concerned with the contractual relationship between the petitioner and the dealers, nor insist on proof of ownership and rent agreements if their concern was to proceed against the five dealers. The Court found no point in keeping the godown sealed indefinitely. The Court did not definitively rule on whether the goods stored were liable to confiscation, but focused on finding a way to remove the seal.

Key Issues

1. Whether the sealing of the petitioner's godown for an indefinite period, without further action against the alleged contravening dealers, is justified under Section 67 of the CGST Act and Gujarat GST Act, 2017? The petitioner argued that the seal should not be kept indefinitely, as it prejudices him as the godown owner. They contended that the authorities could have broken open the lock under Section 67(4) to conduct a search and seize any goods liable to confiscation. The petitioner highlighted the lack of further action by the department since 2018 and expressed willingness to cooperate with the authorities regarding ownership documents, but insisted the seal should be removed without prejudice to the department's right to proceed against the occupants. The State argued that the action was lawful, as the five dealers occupying the godown were believed to have contravened the Act. They asserted the power to seal premises under Section 67(4) and questioned the petitioner's claim of ownership and the dealers' tenancy, stating they had no basis to conclude the petitioner was the owner and dealers were tenants. The State prayed for the dismissal of the writ application.