Velayudhan Gold LLP Vs State of Kerala (Kerala High Court)
The Hon’ble Kerala High Court in the case of M/s. Velayudhan Gold LLP v. State of Kerala and Others [WP (C) No. 34654 of 2023 dated October 20, 2023] disposed the writ petition and held that authorisation under Section 67(2) of the State Goods and Services Act, 2017 (“the SGST Act”) / the Central Goods and Services Act, 2017 (“the CGST Act”), is not required for every person or article, goods, books and documents discovered during the search operation.
Facts:
The Intelligence Unit of the Revenue Department (“the Respondent”) conducted a search at the business premises of M/s. Sobhana Jewellery. The search took place after the authorisation was given by the Joint Commissioner under Section 67(2) of the SGST Act/ the CGST Act. After conducting the search, Mahazar (“list of goods and documents recovered and seized/detained during a search) was prepared.
However, during the search, employees of M/s. Velayudhan Gold LLP (“the Petitioner”) were present, carrying the bag of gold ornaments along with the delivery challan issued by the Petitioner. The delivery challan endorsed 22kt gold ornaments with a net weight of 1332.590 grams in the name of M/s Sobhana Jewellers. At the time of physical verification conducted by the Respondent officials in the presence of witness at the business premises of M/s. Sobhana Jewellery, it was found that the net weight of the gold ornaments was 1647.97 grams. A discrepancy was found between the documents and the actual stock of gold in the bag. Therefore, the gold ornaments found in the bag were seized by the Respondent and a seizure memo was prepared in Form INS 02.
Further, in violation of Rule 56(17) read with Rule 55 of the State Goods and Service Tax Rules, 2017 (“the SGST Rules”) / the Central Goods and Service Tax Rules, 2017 (“the CGST Rules”), the Respondent issued Show Cause Notice dated July 07, 2023 (“the SCN”) raising demand for penalty payable at Rs. 91,70,954/-. The Petitioner thereafter submitted the reply on August 14, 2023.
The Respondent adjudicated upon the SCN vide order dated September 23, 2023 (“the Impugned Order”). Aggrieved by the Impugned Order, the Petitioner filed a writ petition before the Hon’ble Kerala High Court on the ground that there was no authorisation granted by the Joint Commissioner for conducting the search and seizure of gold ornaments recovered and seized from the bag of the Petitioner Partner and employees who were present at the premises of M/s. Sobhana Jewellery. Therefore, as per Section 67 of the SGST Act/ the CGST Act, the seizure of gold ornaments becomes illegal, null and void.
Issue:
Is authorisation under Section 67(2) of the SGST Act/CGST Act required for every person or article, goods, books and documents discovered during search operation?
Held:
The Hon’ble Kerala High Court in the case of W.P. (C) No. 34654 of 2023 held as under:
