No Application filed for Release: Calcutta HC rejects plea for Release of Goods Seized under GST Law [Read Order]

The Calcutta High Court recently ruled that the release of seized goods cannot be sought through a writ petition unless an application for their release under Goods and Services Tax Act is made.

The Revenue Department conducted Search and Seizure proceedings at petitioner’s registered business premises. This led to the issuance of a prohibitory order on March 25, 2023, under Section 67(2) of the Central Goods and Services Tax Act.

Additionally, a show cause notice under Section 122 of the CGST Act was issued, to which the Petitioner responded. The Petitioner also requested the release of the seized timber stock covered by the prohibitory order.

The question was whether the Petitioner must file an application under Section 67(6) of the Central Goods and Services Tax Act to secure the release of the seized goods.

The revenue counsel contended that, no case for interference has been made out as the assessee has not approached the respondents for release of the seized goods in terms of Section 67(6) of the GST Act.

The Calcutta High Court, referring to the Supreme Court ruling in State of Uttar Pradesh v. Kay Pan Fragrance Pvt. Ltd. observed that invoking the provisions of the GST Act is necessary to seek the release of seized goods.

The Single Bench of Justice Raja Basu Chowdhury also considered the Delhi High Court decision in Best Crop Science Pvt. Ltd. v. Superintendent, CGST, Delhi West and Ors. asserting that prohibitory orders cannot endure indefinitely.

It was noted that, “In this case it may be relevant to consider that the assessee has not approached the respondents under Section 67(6) of the GST Act and as such, there is no reason for this Court to interfere at this stage save and except, if any application is made by the assessee with the respondent no.1 in terms of Section 67(6) of the GST Act, the same shall be considered in accordance with law.”

The Calcutta High Court thus held that the goods cannot be released until the Petitioner submits an application under Section 67(6) of the CGST Act. Since no such application was filed, the Court declined to intervene.

To Read the full text of the Order CLICK HERE

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