Assistant Commissioner is not a proper officer to carry out search or inspection.

Case Details:

Issue- In the above case, the petitioner challenges the action of the respondents of seizing the petitioner’s car bearing number GJ-01-RX-0477 as well as his two mobile phones vide order of seizure dated 25.10.2018 made in exercise of powers under sub-section (2) of section 67 of the Gujarat Goods and Service Tax Act, 2017 (hereinafter referred to as the ‘GGST Act’) and seeks release of the above vehicle and the mobile phones so seized. According to the respondents the petitioner had committed an offence punishable under sections 132(1)(b) and 132(1)(c) of the GGST Act on the allegation that the petitioner is the proprietor of M/s. Om Enterprise and had wrongly availed input tax credit amounting to Rs.10-15 crores and passed on the same to various other buyers. It is further the case of the respondents that the petitioner indulged in such activities attracting tax/input tax credit amounting to more than Rs.10 -15 crores. The petitioner was called respondent (Assistant Commissioner of State Tax), on 25.10.2018 for the purpose of inquiry and investigation and on the same day he had appeared before the officer. However, during the course of the inquiry, the respondent seized the car and the mobile phones of the petitioner without drawing any panchnama and the petitioner was directly served with a seizure memo issued under section 67(2) of the GGST Act.

Held– It was held that the powers to attach the property to protect the interest of the revenue are conferred by section 83 of the GGST Act. However, a condition precedent for exercise of powers under section 83 of the GGST Act is that any proceeding should be pending under section 62 or section 63 or section 64 or section 67 or section 73 or section 74 thereof but in the present case, no proceeding under any of the above sections is stated to have been pending against the petitioner at the time when the order of seizure came to be made. The only proceeding which finds reference in the affidavit-in-reply is under section 71 of the GGST Act which relates to access to business premises. As is apparent of a plain reading of section 83 of the GGST Act, the same does not empower the Commissioner to take action thereunder during the pendency of proceedings under section 71 of the GGST Act. Therefore, the impugned order of seizure made by the respondent is not relatable to any provision of the GGST Act. Therefore, it is not even possible to say that the provision referred to in the impugned order is incorrect but that the respondent was otherwise vested with such powers. Under the circumstances, the inescapable conclusion is that the respondent No has acted without any authority of law and in gross abuse of powers, which renders the impugned order of seizure, unsustainable.  For the foregoing reasons, the petition succeeded and was accordingly allowed. The impugned order of seizure dated 25.10.2018 passed by the respondent was quashed and set aside and the respondent was directed to forthwith release the vehicle as well as to mobile phones of the petitioner and hand them over to him.