Defunct Business Unable to Provide Alternate Storage for Goods Post Lease Expiry: Calcutta HC Directs GST Authorities to Repossess Goods [Read Order]

The Calcutta High Court recently directed the Goods and Services Tax (GST) authorities to seize goods held by a defunct business in a leased godown since the defunct company was unable to provide an alternative place for its goods following the expiry of the lease.

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The owner of the concerned godown, Archana Bazaz had filed a writ petition seeking directions for the removal of the seized goods belonging to respondent No. 6 from her premises. The respondent no.6 company had entered into a leave and licence agreement with Bazaz on September 21, 2024, which was valid for six months and ended on March 31, 2025.

During that tenure, ongoing search and seizure operations led GST officials who are also respondents herein to seal the godown, effectively stacking the goods of respondent No. 6 inside.

Represented by Aurin Chakraborty and Pradip Kr. Sarawagi, the petitioner highlighted that with the expiry of the licence, the petitioner could no longer demand fees nor allow the godown to be used and that the business owner was trying to wriggle their way out of paying the requisite licence fees.

Respondent No. 6 submitted through counsel Akash Chakraborty that they could not access the space and that the company’s defunct status meant it was not in a position to arrange any alternate site for its goods.

Tanoy Chakraborty and Saptak Sanyal appearing for the GST authorities stated that although the authorities had attempted to search the premises, they were unable to do so since the Respondent No.6 did not cooperate adequately with the procedure,

Justice Raja Basu Chowdhury, noted that respondent No. 6 had also sought through another writ petition for the GST authorities to take possession. Recognizing that respondent No. 6 had no objection to the goods being dealt with, the Bench ruled that respondent Nos. 1 to 5 could handle and dispose of the goods at the risk and cost of the company.

The Calcutta High Court also clarified that if there was continued non-cooperation from respondent No. 6, GST authorities could proceed under law to clear the goods and restore the godown to the owner within three months. If the GST authorities needed a rented space to store these goods, the cost for the same would also fall on respondent No. 6.

The High Court further directed that any notice regarding the case may be served upon the advocate-on-record for respondent No. 6, with service valid for six months from the date of service.

Accordingly, the Calcutta High Court disposed of the case without costs.

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