Subrata Deb vs. The State Of Assam And 6 Ors.

Held

The Court held that the police authorities of Assam could not continue with the detention and seizure of trucks carrying areca nuts solely on the plea of GST evasion without invoking and following the procedure prescribed under Section 67 of the AGST Act. If the police believed there was fraud or forgery related to GST documents, they could proceed under the CrPC for offenses under the IPC, but this must be done strictly following the prescribed procedure. The Court also noted that any seizure under Section 102 of the CrPC must be reported to the Magistrate. Considering the DRI's report on potential smuggling and bio-security risks, the Court suggested that proceedings under Sections 100/101 of the Customs Act could be initiated by the Customs authorities if they had reason to believe so, following the prescribed procedures. The Court directed that the seized goods be retained by the police for seven days, during which the GST, police, and Customs authorities must decide how to proceed. If no decision is taken within seven days, the detention and seizure would be declared illegal. Any proceedings initiated must strictly adhere to the respective laws (GST Acts, CrPC/IPC, or Customs Act).

Facts

On August 21, 2019, Assam police detained 25 trucks carrying areca nuts due to suspected lack of proper documentation. A subsequent inquiry revealed that some consignor firms were fictitious and records were manipulated, leading to the lodging of an ejahar on September 3, 2019. The ejahar alleged evasion of GST dues and forgery of documents. The petitioner contended that the search and seizure by police were illegal as they lacked jurisdiction under Section 67 of the Assam Goods and Services Tax Act, 2017 (AGST Act). The Directorate of Revenue Intelligence (DRI) also indicated that the seized areca nuts might have been smuggled from Myanmar, violating the Customs Act and posing a bio-security risk. The learned Single Judge had directed the investigation to be handed over to customs authorities.

Key Issues

1. Whether the search and seizure of trucks carrying areca nuts by the police authorities of Assam, alleging evasion of GST dues and forgery of documents, were legal and within their jurisdiction, particularly in light of Section 67 of the AGST Act, 2017? 2. Whether the detention and seizure of the trucks and areca nuts by the police authorities were justified, considering the allegations of smuggling under the Customs Act, 1962, and the potential bio-security risks? Petitioner's arguments: The petitioner argued that the police lacked the authority to conduct search and seizure for GST evasion, as this power is vested with proper officers under Section 67 of the AGST Act, 2017, who must have reason to believe in excess input tax credit claims or tax evasion. They contended that the police's action was an aberration of established legal procedure. Revenue/State's arguments: The police authorities, in their affidavit, referred to a DRI letter suggesting smuggling of betel nuts from Myanmar, violating the Customs Act and posing bio-security risks. They also claimed the power to seize property under Section 102 of the CrPC. The judgment does not explicitly record arguments from the State GST authorities regarding their specific stance on the GST evasion allegations.