GST Update

Desk of CA Praveen Sharma – 921 Series (CAPS)

Gujarat High Court in the case of Reevan Creation

The Gujarat High Court examined a GST matter involving search, seizure of goods, and provisional attachment of bank accounts of a jewellery trader, with specific focus on statutory time limits prescribed under the GST law.

A search was carried out in March 2022 during which gold, silver, and cash were seized and the petitioner’s bank accounts were provisionally attached by the department.

The petitioner contended that the one-year validity of provisional attachment under Section 83(2) and the six-month period for issuing notice after seizure under Section 67(7) had already expired.

Despite several written representations, the department failed to release the seized goods or remove the bank attachment, leaving the petitioner with no option but to approach the High Court.

The State defended its actions by alleging serious tax evasion but conceded that no fresh attachment order was passed and no notice was issued within the prescribed time due to delays in investigation.

The Court noted serious procedural violations, including non-issuance of notices within statutory limits and initiation of confiscation proceedings after unreasonable delay.

Holding the departmental action to be illegal, the Court directed immediate release of seized goods and de-freezing of bank accounts within ten days.

The Court also directed the Chief Commissioner to conduct an inquiry against the officers responsible for the lapses, while keeping the matter pending only to ensure compliance.

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Regards
CAPS