SAM Stores Vs State Tax Officer (Madras High Court)
Summary: The Madras High Court disposed of a writ petition challenging the locking and sealing of business premises pursuant to an affixture notice dated 18.08.2026. The petitioner submitted that officers inspecting its premises had seized books of account, invoices and connected documents, five mobile phones, three laptops and hard disks containing computer data and CCTV footage, without furnishing a mahazar. It also contended that an assessment order dated 24.04.2026 covering periods up to financial year 2024-2025 had already been passed and uploaded on the GST portal, leaving no necessity to invoke Section 67(2) of the CGST Act.
The respondent alleged bill trading and expressed concern that the petitioner might remove the stock if the premises were reopened; the petitioner disputed that allegation and undertook not to sell or remove the inventoried goods without prior permission. While observing that the allegations were serious, the Court noted that sealing prevented business operations and that leaving the premises sealed and goods idle served no useful purpose and could cause deterioration or wastage of assets. Accepting the undertaking, it directed desealing within 48 hours from receipt of a copy of the order, subject to the condition that no goods listed in the inventory dated 18.08.2026 could be sold or disposed of without prior permission from the authorities concerned. The petition was disposed of without costs, and the connected miscellaneous petition was closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This writ petition has been filed by the petitioner challenging the proceedings of the respondent in locking and sealing of the business premises by affixture of notice dated 18.08.2026.
2. Learned counsel for the petitioner would submit that, on 18.08.2026, a team of officers led by the respondent inspected the petitioner’s place of business. During the course of inspection, the respondent seized the books of accounts, including invoices relating to inward and outward supplies and other connected documents. The inspection team also recovered five mobile phones, three laptops used by the accounts department, the hard disk of the computer and the hard disk containing CCTV footage recorded by the cameras installed in the premises. However, till date, the respondent has not furnished any mahazar relating to the seized documents and electronic devices. Furthermore, during the course of inspection, the petitioner was informed that an assessment order dated 24.04.2026 has been passed up to the financial year 2024-2025 and uploaded on the GST portal. When the respondent has already passed the assessment order up to the financial year 2024-2025 on 24.04.2026, there is no necessity to invoke the provision of Section 67(2) of the CGST Act.
3. He would further submit that owing to the sealing of the petitioner’s place of business, the petitioner is unable to carry on the business activity and he would undertake none of the goods reflects in the stock position as on 18.08.2026 would be sold or removed by the petitioner from the business premises without obtaining prior permission from the respondent.
4. Learned Government Advocate appearing for the respondent has filed a detailed counter and submitted that the petitioner is involved in bill trading and if the lock and seal are removed, the petitioner may remove all the stocks from the premises.
5. Learned counsel for the petitioner strongly objected to the submissions made by the learned Government Advocate regarding the alleged involvement of the petitioner in bill trading and disputed the said allegation.
6. Heard the learned counsel for the petitioner as well as the learned Government Advocate appearing for the respondent.
7. Considering the rival submissions made by the learned counsel for the petitioner and the learned Government Advocate appearing for the respondent, it is evident that the allegations levelled against the petitioner relate to the bill trading activities, which are serious in nature. However, the sealing of the petitioner’s business premises has prevented the petitioner from carrying on business activities. The petitioner has also given an undertaking that the goods reflected in the stock list prepared by the respondent on 18.08.2026 will not be sold without obtaining prior permission from the authorities concerned. In such circumstances, keeping the premises sealed and allowing the goods to remain idle would serve no useful purpose and may instead result in the deterioration or wastage of the assets. Therefore, taking note of the undertaking given by the petitioner, the respondent is directed to deseal the petitioner’s business premises within a period of 48 hours from the date of receipt of a copy of this order. However, the petitioner shall not sell or dispose any of the goods listed in the stock inventory prepared by the respondent on 18.08.2026, without getting prior permission from the authorities concerned.
8. In view of the above, this writ petition is disposed of. No costs. Consequently, connected miscellaneous petition is closed.
