Ikhlaq Mohammad Ismail Shaikh Through His Wife Noorjahaben Wife Ikhlaq Mohammad Ismail Shaikh vs. State Of Gujarat

Held

The Court disposed of the writ application by granting liberty to the writ applicant to make an appropriate application under Section 76(6) of the Act for the provisional release of the seized goods. This release would be subject to the execution of a bond and furnishing of security. The Court directed that if such an application is preferred, the competent authority shall consider it and pass an appropriate order in accordance with the law. The Court did not explicitly rule on the legality of the sealing itself but provided a procedural path for the release of goods. The issue of whether the sealing was justified under Section 67 was implicitly addressed by directing the applicant to seek release under Section 76(6), suggesting a focus on resolving the immediate grievance of access to the premises and goods rather than a definitive pronouncement on the initial action's legality.

Facts

The writ applicant, Ikhlaq Mohammad Ismail Shaikh, proprietor of M/s. Any Steel, engaged in the scrap business and registered under the Gujarat Goods and Services Tax Act, 2017, filed a writ application challenging the sealing of his principal place of business. Proceedings for confiscation of goods stored in his warehouse had been initiated, and criminal prosecution was also instituted, leading to the applicant's judicial custody. The applicant contended that sealing the warehouse was unjustified, arguing that an order restraining the removal of goods would have sufficed. The respondents, represented by the State, argued that the authorised officer had the power to affix a seal under the Act, especially given the ongoing criminal prosecution.

Key Issues

1. Whether the action of affixing a seal on the petitioner's warehouse, which is the principal place of business, was justified under Section 67 of the Gujarat Goods and Services Tax Act, 2017, or if an alternative measure like restraining the removal of goods should have been employed? Petitioner's argument: The petitioner argued that while Section 67 permits search and seizure of goods or documents, there was no sufficient reason for the authorized officer to affix a seal on the warehouse. They contended that an order restraining the removal of goods would have been a more appropriate measure. Revenue's argument: The respondents argued that the officer authorized under Section 76(2) of the Act possesses the power to affix a seal. They further pointed out that criminal prosecution had been initiated against the petitioner, and therefore, the action taken by the authorized officer was not illegal.