R.J. Trading Co. Vs Commissioner of CGST (Delhi High Court)
The Delhi High Court adjudicated a writ petition filed by M/s R.J. Trading Co. (RJT) challenging actions taken by CGST authorities, including the detention of goods and seizure of documents under Section 67(2) of the Central Goods and Services Tax (CGST) Act, 2017. RJT sought relief to quash the order of prohibition dated 05.03.2021, release the detained goods, declare the searches illegal, and award costs. RJT claimed it was a registered GST dealer trading in cigarettes, maintaining compliance with CGST laws, including filing of GSTR-1 and GSTR-3B returns and payment of taxes.
RJT contended that DGGI (Ahmedabad Zonal Unit) first visited its premises on 13.02.2021, finding the premises locked, which was sealed. A search on 14.02.2021 revealed stock of 1,08,000 cigarettes, and certain documents, including stock register details, were seized for further enquiry. Summons were issued to RJT’s partner to produce documents and give statements. On 05.03.2021, officers from CGST Delhi North Commissionerate conducted another search based on authorization issued by Additional Commissioner, alleging that RJT was supplying goods linked to an entity, M/s Mridul Tobie Inc., under investigation for non-payment of GST. During the search, 190 cartons of cigarettes containing 22,26,000 sticks were detained via an order of prohibition in Form GST INS–03, and relevant documents were seized under Form GST INS–02. The seizure was premised on the inability of RJT’s employee to produce a stock register at the time of search, which allegedly led to a “reasonable belief” that goods were intended for illicit trade.
