M/S Novelty Leather Store vs. Commissioner Dgst Delhi & Ors.
Original PDF →Facts
The Petitioner, M/s Novelty Leather Store, filed a writ petition seeking to quash a Sealing Memo dated 25.09.2026, by which their business premises were sealed by the Commissioner DGST Delhi & Ors. The Petitioner alleged that during the search, they were forced to draw cheques totaling Rs. 1 crore. The Respondents, represented by the Commissioner DGST Delhi & Ors., contended that the Petitioner failed to supply books of accounts and supporting documents despite opportunities and an undertaking. The sealing was purportedly done under Section 67(4) of the Central Goods and Services Tax Act, 2017, which allows sealing if access is denied. The case was heard by the Delhi High Court.
Held
The Court disposed of the writ petition based on submissions made by the parties. The Respondents, represented by the Commissioner DGST Delhi & Ors., submitted that the seals on the Petitioner's business premises would be removed by 12 PM the following day. The Petitioner agreed to hand over certain books of accounts to Mr. Krishan Kant, Assistant Commissioner (Anti Evasion). The Department would then be at liberty to requisition any remaining documents, which the Petitioner must supply within two weeks of requisition, failing which an adverse inference could be drawn. Regarding the alleged forced drawing of cheques, the Respondents stated that two cheques of Rs. 50 lakh each, handed over by the Petitioner, would not be encashed. The Petitioner assured cooperation for stock-taking upon removal of seals. The Court explicitly stated it had not expressed any opinion on the merits of the case, and the Department was free to proceed in accordance with law.
Key Issues
1. Whether the sealing of the Petitioner's business premises was justified under Section 67(4) of the Central Goods and Services Tax Act, 2017, which permits sealing only when access to premises, electronic devices, boxes, or receptacles is denied? Petitioner's contention: The Petitioner sought to quash the sealing memo, implying the sealing was not justified. Revenue's contention: The Respondents argued that the sealing was necessitated by the Petitioner's failure to supply books of accounts and supporting documents, despite opportunities and an undertaking. They relied on the provision allowing sealing when access is denied.
Sections Cited
Section 67(4)
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Cause title — parties, addresses and appearances
O R D E R %
2026
Through the present petition, the Petitioner prays for quashing of the Sealing Memo dated 25.09.2026 whereby the business premises of the Petitioner was sealed.
In the pre-lunch session, arguments of learned counsel representing the Respondents were heard.
Attention of the learned counsel representing the Respondents was drawn to Section 67(4) of the Central Goods and Services Tax Act, 2017, This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/10/2026 at 12:09:17
which empowers the authorized officer to seal the business premises only in the eventuality that access to such premises, electronic devices, boxes or receptacles is denied.
Learned counsel representing the Respondents submitted that despite opportunity and undertaking, the Petitioner failed to supply books of accounts and supporting documents.
In the post-lunch session, learned counsel representing the Respondents after taking instructions submitted that seals on the business premises of the Petitioner will be removed by 12 PM tomorrow.
The Petitioner has brought certain books of accounts, which shall be handed over to Mr. Krishan Kant, Assistant Commissioner (Anti Evasion). After examining the documents, it shall be open to the Department to requisition remaining documents, if any, from the Petitioner. It shall be the responsibility of the Petitioner to supply those documents within two weeks of their requisition by the Department, failing which the Department shall be entitled to draw an adverse inference against the Petitioner.
The Petitioner alleges that during the course of search, he was forced to draw cheques amounting to Rs. 1 crore. Learned counsel representing the Respondents submits that two cheques of Rs. 50 lakh each were handed over, which shall not be encashed.
Learned counsel representing the Petitioner states that the requisite assistance for stock-taking shall be rendered at the time of removing the seals from the premises.
This Court has not expressed any opinion on the merits of the case and the Department will be free to proceed in accordance with law.
This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/10/2026 at 12:09:17
In view of the aforesaid, the Writ Petition along with the pending application, stands disposed of.
ANIL KSHETARPAL, J
BHARAT PARASHAR, J SEPTEMBER 30, 2026/RW/MN This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/10/2026 at 12:09:17
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.