Anopsinh Kiritsinh Savariya v. State of Gujarat
[Citation -2020-LL-0206-91]

Citation 2020-LL-0206-91
Appellant Name Anopsinh Kiritsinh Savariya
Respondent Name State of Gujarat
Court HIGH COURT OF GUJARAT AT AHMEDABAD
Relevant Act CGST
Date of Order 06/02/2020
Judgment View Judgment
Keyword Tags contractual relationship • goods and services tax • service of notice • ownership • rent • order of confiscation • search and seizure • seized goods


C/SCA/2705/2020 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 2705 of 2020 ANOPSINH KIRITSINH SARVAIYA Versus STATE OF GUJARAT Appearance: MS VAIBHAVI K PARIKH(3238) for Petitioner(s) No. 1 for Respondent(s) No. 2 MR. CHINTAN DAVE, ASST. GOVERNMENT PLEADER/PP(99) for Respondent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 06/02/2020 ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. Rule returnable forthwith. Mr. Chintan Dave, learned AGP, waives service of notice of rule for and on behalf of respondents. 2. By this writ application under Article 226 of Constitution of India, writ applicant has prayed for following reliefs; (A) quash and set aside sealing memos at Annexure-A (Colly) in relation to Godown No.14 situated at Makerting Yard, Gondal. (B) pending admission, hearing and final disposal of this petition, stay implementation and operation of impugned sealing memos in relation to Godown No.14 situated at Marketing Yard, Gondal at Annexure- A( Colly); Page 1 of 10 Downloaded on : Fri Jun 18 12:39:02 IST 2021 C/SCA/2705/2020 ORDER (C ) any other and further relief deemed just and proper be granted in interest of justice. (D) to provide for cost of this petition. 3. facts, giving rise to this writ application, may be summarized as under; 3.1 writ applicant claims to be agriculturist. It is his case that he owns godown bearing No.14, situated at Marketing Yard at Gondal, District: Rajkot. According to him, said Godown No.14, situated at Marketing Yard has been given on rent to five distinct entities, namely, (I) Ajayraj & Co. (ii) Dharamraj Exports (iii) Kamani Exports (iv) R.L. Enterprise and (5) Ruturaj & Co. It is case of writ applicant that this particular godown is used by above referred entities for purpose of storing agricultural produce like cotton bales and cotton yarn. According to him, relationship is that of landlord and tenant. 3.2 On 17th November, 2018, authorities under CGST Act visited godown, and in exercise of power under Section 67 of Act, applied seal on godown. godown in question came to be sealed by officials of Department vide sealing memos dated 17th November, 2018 and 19th November, 2018 respectively. sealing memo dated 17th November, 2018 reads thus; Office of Deputy Commissioner of State Tax Enforcement, Div. I, Ahmedabad, Gujarat State, A-4, Rajya Kar Bhavan, Ashram Road, Ahmedabad, 380009. Date: Page 2 of 10 Downloaded on : Fri Jun 18 12:39:02 IST 2021 C/SCA/2705/2020 ORDER SEALING MEMO M/s. Dharamraj Export GSTN 24AAKFD 8036B12R Date of Search: 17.11.2018 Time: 01:30 Hrs. According to Central Goods and Services Tax Act, 2017 & Gujarat Goods and Services Tax Act, 2017 search activity has been conducted in case above dealer / transporter but due to reason given below, it is decided to cessation search activity for today. Reasons: Authorized person not present Place: Gondal Signature Name Date: 19.11.2018 Designation Round Seal Dealer Sign Note: 1. This seal is done in presence of two witness and decided to open at time to next search proceeding. 2. Any attempt on part of tamper with sealing memo, books of accounts is punishable with imprisonment and/or fine under Act read with section 179, 191 and 4128 of Indian Penal Code. 3.3 sealing memo dated 19th November, 2018 reads thus; Office of Additional State Tax Commissioner, B-4, State Tax Bhavan, Ashram Road, Gujarat State, Ahmedabad, 380009. Date: 19.11.2018 SEALING MEMO M/s. Kamani Export GSTN 24AAPFR 2818MIZY Page 3 of 10 Downloaded on : Fri Jun 18 12:39:02 IST 2021 C/SCA/2705/2020 ORDER Date of Search: 17.11.2018 Time; 1:30 PM To 19.11.2018 Time: 5:30 PM According to Central Goods and Services Tax Act, 2017 & Gujarat Goods and Services Tax Act, 2017 search activity has been conducted in case above dealer/ transporter but due to reason given below, it is decided to cessation search activity for today. Reasons: 1. To avail Wrong ITC 2. Collected tax wrongly & not deposited to Govt. Treasury 3. Try to neglect searching team 4.Non-Co-operation in search process. Place: Gondal Signature Name Date: 19.11.2018 Designation Round Seal Dealer Sign Note: 2. This seal is done in presence of two witness and decided to open at time to next search proceeding. 2. Any attempt on part of tamper with sealing memo, books of accounts is punishable with imprisonment and/or fine under Act read with section 179, 191 and 4128 of Indian Penal Code. 3.4 It is case of writ applicant that if five dealers, referred to above, have contravened any of provisions of Act or Rules, then it is always open for authorities to proceed against them in accordance with law. However, grievance of writ applicant is that he, being owner of godown, seal which has been affixed, cannot be for indefinite period of time. According to Page 4 of 10 Downloaded on : Fri Jun 18 12:39:02 IST 2021 C/SCA/2705/2020 ORDER writ applicant, if five dealers, referred to above, have stored anything in godown in form of goods or other documents, then they may be liable to confiscation, but being owner of godown, he has nothing to do with alleged contravention of provisions of Act or Rules. 3.5 It is in aforesaid set of circumstances that writ applicant is here before this Court, seeking appropriate relief, as prayed for in this writ application. 3.6 Ms. Vaibhavi Parikh, learned counsel appearing for writ applicant would submit that there is no point in keeping godown sealed for indefinite period. According to Ms. Parikh, authorities ought to have undertaken search by breaking open lock as they are empowered to do so under Section 67(4) of Act, and in course of search or inspection, if they would have found goods liable to confiscation, then such goods could have been seized. Ms. Parikh would submit that since 2018 till this date, there has been no further action on part of Department, According to Ms. Parikh, even as on date, godown remains with seal affixed way back in year 2018. 3.7 Ms. Parikh would submit that her client, as owner of godown, is ready and willing to cooperate. She would submit that if authorities would like to look into documents of ownership etc., then he is ready and willing to produce those documents. However, seal should be now removed from godown without prejudice to right of Department to proceed against occupants or users of godown, i.e, dealers. Page 5 of 10 Downloaded on : Fri Jun 18 12:39:02 IST 2021 C/SCA/2705/2020 ORDER 4. On other hand, this writ application has been vehemently opposed by Mr. Dave, learned AGP appearing for State-respondents. According to Mr. Dave, action which has been taken by GST Authorities is in accordance with law. According to Mr. Dave, Department has information that five dealers, who are jointly in occupation of godown and who have stored their goods in godown, have contravened provisions of Act and Rules and, therefore, they are liable to be proceeded in accordance with law. Mr. Dave would submit that authorities have power under Section 67(4) of Act to affix seal on premises. According to Mr. Dave, as on date, there is nothing with Department, on basis of which, it can come to conclusion that writ applicant is owner of godown in question and dealers are tenants of writ applicant. In such circumstances, referred to above, Mr. Dave prays that there being no merit in this writ application, same be rejected. 5. Having heard learned counsel appearing for parties and having gone through materials on record, only question that falls for our consideration is whether writ applicant is entitled to reliefs as prayed for in this writ application. 6. We may straightway, once again, look into sealing memos. plain reading of contents of sealing memos would indicate that after seal was affixed, authorities had to stop further action for reasons recorded in memos. reasons recorded in memos are as under; Page 6 of 10 Downloaded on : Fri Jun 18 12:39:02 IST 2021 C/SCA/2705/2020 ORDER 1. To avail Wrong ITC 2. Collected tax wrongly & not deposited to Govt. Treasury 3. Try to neglect searching team 4. Non-Co-operation in search process. 7. In one of memos, it has been stated that place of business is found to be closed and no authorized person was found to be present. We are not able to understand how could such grounds be reason for not taking further action in matter. What has been stated above could be in form of accusation against dealers, for which, it is always open for Department to proceed in accordance with law. It is not case of respondents that writ applicant is also involved along with dealers in one way or other. Section 67 of Act, 2017 is with regard to power of inspection, search and seizure. Section 67(2), relevant for our purpose, reads thus; (2) Where proper officer, not below rank of Joint Commissioner, either pursuant to inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things: Provided that where it is not practicable to seize any such goods, proper officer, or any officer authorized by him, may serve on owner or custodian of goods order that he shall not remove, part with, or otherwise deal with goods except with previous permission of such officer: Page 7 of 10 Downloaded on : Fri Jun 18 12:39:02 IST 2021 C/SCA/2705/2020 ORDER Provided further that documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act. 8. Section 67(4), also relevant for our purpose, reads thus; (4) officer authorised under sub-section (2) shall have power to seal or break open door of any premises or to break open any almirah, electronic devices, box, receptacle in which any goods, accounts, registers or documents of person are suspected to be concealed, where access to such premises, almirah, electronic devices, box or receptacle is denied. 9. plain reading of aforesaid two provisions of law makes it clear that if proper officer, not below rank of Joint Commissioner, either pursuant to search carried out under sub-section (1) or otherwise has reasons to believe that any goods liable to confiscation or any documents or books, which in opinion of proper officer, may be useful or relevant to any proceedings which may be undertaken or such goods are liable to be secreted to any place, then proper officer may authorize in writing any other officer of State Tax to search and seize goods, documents or books or things. Clause (4), referred to above, empowers authorized officer to seal or break open door of any premises where access to such premise is denied. 10. if it is case of Department that five dealers have stored goods or other articles which are liable to confiscation, then authorities could have seized such goods and documents long time back. Once goods and other articles are seized from premises, then there could be no Page 8 of 10 Downloaded on : Fri Jun 18 12:39:02 IST 2021 C/SCA/2705/2020 ORDER good reason to keep godown in sealed condition. In case on hand, writ applicant, being owner of godown is concerned with seal which has been affixed and which continues as on date. 11. In case on hand, we have not been shown anything to indicate that proper officer had any reasons to believe that goods stored in godown in question are liable to confiscation. However, for time being, we are not going into this issue. We are trying to find way out, by which, seal can be removed without prejudice to rights of department to proceed against dealers in accordance with law. 12. We dispose of this writ application with following directions; (i) officials of Department, who are present in Court today for purpose of assisting learned AGP, makes statement that they will visit place where godown in question is situated on 10th February, 2020 at 2:00 p.m. They further make statement that they will break open seal and undertake search of godown by drawing appropriate Panchnama. If there are reasons to believe that goods stored in godown are liable to confiscation or any documents or books or things, which in their opinion, may be useful or relevant to any proceedings under this Act, then they may seize such goods, documents etc. (i) Once aforesaid exercise is completed, it shall be open Page 9 of 10 Downloaded on : Fri Jun 18 12:39:02 IST 2021 C/SCA/2705/2020 ORDER for writ applicant to takeover possession of godown. At same time, we direct writ applicant to remain present on 10th February, 2020 at 2:00 p.m. at place where his godown is situated with documents evidencing ownership. However, authorities should not be more concerned with contractual relationship between writ applicant and dealers. We are still not able to understand why authorities, under GST Act, are insisting for proof of ownership and rent agreement. We are of view that authorities cannot insist for such documents. If they want to proceed against five dealers, they may proceed. They should be concerned with goods or other articles stored in godown which may be liable to confiscation. There is no point in keeping godown closed with seal affixed on it. 13. With above directions, this writ application is disposed of. Direct service is permitted. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) Vahid Page 10 of 10 Downloaded on : Fri Jun 18 12:39:02 IST 2021 Anopsinh Kiritsinh Savariya v. State of Gujarat
Report Error