Bhima Enterprises Vs Principle Chief Commissioner of GST (Madras High Court)
The writ petitioner, a partnership firm engaged in the manufacture and wholesale jewellery business, challenged proceedings arising from a search conducted on 16.08.2023 under Section 67(2) of the CGST Act, 2017. During the search, officials seized gold ornaments weighing 3808.386 grams valued at Rs.2,22,98,100/- and physical gold bullion weighing 5478.940 grams valued at Rs.3,20,79,193/-, stating that the excess stock was not reflected in the books.
The petitioner contended that the search was illegal because the warrant did not bear the mandatory Document Identification Number (DIN), and alleged that Rs.32,62,640/- was coercively collected in two instalments of Rs.13,37,888/- and Rs.19,24,752/- on 16.08.2023 and 17.08.2023. The respondents maintained that the payment was voluntary and that the DIN was subsequently generated.
The Court held that inspection, search and seizure under Section 67 are conceptually distinct. Section 67(1) concerns inspection, while Section 67(2) concerns search and seizure. The proper officer cannot invoke these powers arbitrarily and must have the requisite “reasons to believe”.
The Court found that the authorization dated 15.08.2023 was unclear. Although issued under Section 67(2), it was described at its foot as an inspection warrant and mechanically reproduced circumstances relating to both inspection and search. The Court held that an authorization in Form GST INS-1 must specifically identify the nature of the power conferred.
