Goods can’t be seized from godown by invoking section 129 of CGST Act: HC

Case Details: Mahavir Polyplast (P.) Ltd. v. State of U.P. - [2022] 142 taxmann.com 8 (Allahabad)

Judiciary and Counsel Details

• • Saumitra Dayal Singh, J.
  • Nishant Mishra for the Appellant.
  • C.S.C. for the Respondent.

Facts of the Case

The department conducted search and seizure operation in godown by invoking section 129 of CGST Act, 2017. Thereafter, two show-cause notice (SCN) was issued and consequential order demanding tax and equal penalty had been passed in respect of search and seizure operation conducted at premises of petitioner. It filed appeal but the same was dismissed and this writ petition was filed to challenge the SCN & order.

High Court Held

The Honorable High Court observed that the authorities acted with negligence and had conducted search and seizure operation in godown by invoking section 129. However, this section can’t be invoked in respect of immovable property (godown).

The Court also noted that Section 67 has to be invoked for search in this case but the same had not been invoked as there were no “reasons to believe” that petitioner suppressed stock of goods. Moreover, the description given by authorities in respect of vehicle clearly proved that they were aware that they conducted search and seizure in an immovable property (godown) and not vehicle in transit.

Therefore, the department was directed to refund of amount deposited, if any, along with interest and also directed to take appropriate action commensurate to misconduct if any against the concerned authorities.