No Threat/Coercion during GST Search and Seizure in Attempts to Recovery, SC directs Centre

The bench stressed the need for strict implementation of safeguard provisions and clarified that while the department can provisionally attach properties in case of non-payment, individuals must be given time to resolve their liabilities
Supreme Court - GST - search and seizure - Voluntary GST payment - Supreme Court on GST recovery - taxscan

The Supreme Court instructed the Centre on Wednesday to employ persuasion rather than threats or coercion in pursuing the voluntary payment of Goods and Services Tax ( GST ) dues during search and seizure operations against traders.

A bench of three judges led by Justice Sanjiv Khanna advised the Centre’s representative, Additional Solicitor General S V Raju, that the GST Act does not grant authority to compel individuals to pay taxes during such operations.

The bench remarked that payments should be voluntary, with individuals given time to consult and clear their liabilities without facing pressure.

The Supreme Court bench of Justices MM Sundresh and Bela M Trivedi, is overseeing 281 petitions challenging various aspects of the GST Act, Customs Act, and Prevention of Money Laundering Act.

During the proceedings, concerns were raised about alleged coercion during search and seizure operations. Raju clarified that while there may have been isolated instances in the past, this is not standard practice.

One petitioner’s counsel argued that legal safeguards are not consistently enforced, with individuals often threatened with arrest to compel payment. The Centre’s counsel pointed out instances of tax evasion through unconventional means, such as transporting goods in oil tankers and auto-rickshaws.

Another petitioner’s counsel highlighted numerous arrests and confiscations under the GST regime over the past five years, with many cases pending in high courts. The Supreme Court continues hearing the case Today.

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