A.M Enterprise And Anr vs. The State Of Assam And 6 Ors

Held

The Court held that the police authorities of Assam could not continue the detention and seizure of trucks containing areca nuts solely on the plea of GST violations without invoking Section 67 of the AGST Act and following its prescribed procedure. Similarly, if the police believed there was fraud or forgery simpliciter, they should proceed under the CrPC for offences under the IPC, strictly following the prescribed procedure. The Court also clarified that any seizure under Section 102(1) of the CrPC must be followed by a report to the Magistrate as per Section 102(3). Furthermore, the Court noted the bio-security risk and the possibility of smuggling under the Customs Act, suggesting that if the Customs authorities had reasons to believe so, proceedings should be initiated under Sections 100/101 of the Customs Act, following its procedures. The Court directed that the detained goods be retained by Assam police for seven days, during which the GST, police, and Customs authorities must decide how to proceed strictly as per their respective laws. If no decision is taken within seven days, the detention and seizure would be declared illegal. The Court modified its earlier judgment, allowing proceedings under the respective laws if initiated within the stipulated period.

Facts

On August 21, 2019, police officials detained 25 trucks carrying areca nuts from Cachar district, suspecting they lacked proper documentation. Subsequently, one more truck was detained. Investigations revealed that the identity of consignors could not be ascertained, some consignor firms were fictitious, and records and documents appeared manipulated and forged. An ejahar was lodged on September 3, 2019, alleging evasion of GST dues and the use of forged documents. The petitioner, M/s A.M. Enterprise, challenged the seizure and detention as illegal and without jurisdiction, arguing that only designated GST officers could initiate such actions under Section 67 of the Assam Goods and Services Tax Act, 2017. The Directorate of Revenue Intelligence (DRI) also indicated that the betel nuts might have been smuggled from Myanmar, violating the Customs Act, 1962, and posing a bio-security risk.

Key Issues

1. Whether the police authorities of Assam had the jurisdiction to detain and seize trucks carrying areca nuts on the premise of alleged evasion of GST dues and forgery of documents, when such powers are vested with GST authorities under the Assam Goods and Services Tax Act, 2017? 2. Whether the detention and seizure of the trucks and areca nuts are illegal and unsustainable in the absence of adherence to the procedures prescribed under the Assam Goods and Services Tax Act, 2017, the Code of Criminal Procedure, 1973, or the Customs Act, 1962? Petitioner's arguments: The petitioner contended that the search and seizure by police officials were an aberration of established legal procedure. They argued that under Section 67 of the AGST Act, 2017, only a proper officer not below the rank of Joint Commissioner could initiate search and seizure based on specific reasons related to tax evasion or excess input credit claims. The police's actions, therefore, lacked jurisdiction. Revenue's arguments: The revenue authorities, including the police, argued that the detention was based on information of potential GST evasion and forgery. The DRI's communication suggested smuggling under the Customs Act, 1962, and a bio-security risk, implying that the goods were liable for seizure under that Act. The police also asserted power to seize property under Section 102 of the CrPC.