GST: Complete Sealing of Premises is Illegal, says Delhi HC [Read Order]

A two-judge bench of the Delhi High Court has held that the complete sealing of the business premises is illegal under the GST laws.

The petitioners’ premises were visited by the Revenue authorities on 29.08.2018 when the DGST officials directed production of books of accounts and other documents. Since the petitioner was not in possession of those, it sought 24 hours time for the same. Apparently a temporary sealing of the premises was ordered. On the next date i.e. 30.08.2018, the premises were completely sealed. It is contended that the DGST lacks statutory power and authorization to indefinitely seal the premises in a manner it has proceeded to do so.

For the department, it was argued that submitted that till date the petitioner has not cooperated as it has neither produced the books of accounts nor other materials. It is further submitted that according to the instructions available to them, the premises can be immediately de-sealed provided the petitioner cooperates.

The petitioner claimed that the authorization does not name the assessee; it only lists the two premises i.e. the business premises at Netaji Subhash Place and the DSIDC Unit at Narela.

Justice S. Ravindra Bhatt and A K Chawla held that “Given the plain text of the statute i.e. especially Section 69(4), which merely authorizes the concerned officials to search the premises and if resistance is offered, break-open the lock or any other almirah, electrical device, box, etc. containing books and documents, the complete sealing of the premises, in the opinion of the court is per se illegal. Even if it were assumed that the respondents temporarily restrained the petitioner from using its premises, for a few hours, till the books of accounts are made available in order to secure the evidence available in the premises that could not have assumed the life on “its own”, at least indefinitely. In these given circumstances, this petition has to succeed. Since the premises have been in the possession of the respondents for over a month, a direction is issued to remove the seal forthwith – within the next 12 hours and hand over the premises to the petitioner.”