GST Seizure Beyond Limitation Invalid: Gujarat High Court Orders Release of Gold & Bank Accounts

GST Seizure Beyond Limitation Invalid: Gujarat High Court Orders Release of Gold & Bank Accounts

Reevan Creation, a partnership firm engaged in trading of gold, silver, diamonds and jewellery, was subjected to a search under Section 67(2) of the GST Act on 09.03.2022. During the search, gold weighing 1175.82 grams and cash of Rs. 5,54,130 were seized, and the petitioner’s bank accounts were provisionally attached on 10.03.2022.

Despite the passage of more than one year, the provisional attachment of bank accounts was not lifted, nor were the seized goods released. No notice under Section 67(7) was issued within six months of seizure, nor was the period extended as permitted by law. Multiple representations made by the petitioner seeking release of goods and de-freezing of accounts remained unanswered, compelling the petitioner to approach the High Court.

Main Issue: Whether seizure of goods and provisional attachment of bank accounts can be sustained when statutory timelines under Sections 67(7) and 83(2) of the GST Act are not complied with.

Decision: The Gujarat High Court allowed the writ petition, holding that the statutory safeguards under the GST Act had been blatantly ignored by the authorities. The Court noted multiple lapses, including failure to issue notice within six months of seizure, failure to extend the seizure period lawfully, and continuation of provisional attachment beyond one year without any fresh order.

The Court directed the immediate release of seized gold and cash and the lifting of the provisional attachment of bank accounts within ten days. The court also directed the Chief Commissioner of State Tax to conduct an inquiry against the officers responsible for these lapses.

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