Introduction
In the case of Excellentvision Technical Academy (P.) Ltd. v. State of U.P[i]. at the High Court of Allahabad (‘HC’), the petitioner challenged the legality of a search and seizure operation conducted on 04.01.2018 and subsequent proceedings under the Uttar Pradesh Goods and Services Tax Act, 2017(‘Act’). The issue at the core of this case was the validity of the authorisation for the search under s. 67 of the Act, particularly the existence of two INS-01 forms issued on different dates—one on the actual date of the search and another issued over a year later, raising concerns about procedural irregularities and the absence of 'reasons to believe' required for search authorisation.
Brief Facts
The writ petition(‘WP’) was filed under a. 226 of the Constitution of India, challenging the legality of the search and seizure order dated 04.01.2018 and subsequent proceedings, including a notice issued on 08.02.2021 and an order dated 01.09.2021 under s. 74 of the Act. The WP also challenged the order passed in appeal dated 06.01.2023.
The search was conducted on 04.01.2018. However, there were two INS-01 issued: one dated the same day and another on 11.02.2019. The Petitioner argued that the INS-01, dated 04.01.2018, lacked documented reasons to believe, suggesting it was fabricated and created retrospectively. In contrast, the INS-01, dated 11.02.2019, was invalid as the same was issued after the search. Thus, it was the case of the Petitioner that the proceedings initiated under s. 67 of the Act lacked authorisation, was illegal and was subject to dismissal.
Aggrieved by the same, the Petitioner filed the WP.
Held
The HC allowed the WP, and the search and seizure order dated 04.01.2018, along with all the subsequent proceedings, were quashed.
The HC found the State authorities’ explanations in the counter affidavit inadequate and insufficient, leading to confusion and non-compliance with s.67 of the Act. It held that the mandatory procedure under s. 67 of the Act was not followed.
Therefore, the HC quashed and set aside the entire proceedings originating from the illegal search and seizure. It further directed the State authorities to release all detained or confiscated goods and documents within three weeks from the date of the order.
Further, the HC also directed the refund of any amount deposited by the Petitioner in lieu of the order passed under s. 74 of the Act within eight weeks from the date of the order.
Our Analysis
This ruling by the HC centred on the legality of a search and seizure operation under s. 67 of the Act. The HC emphasised procedural non-compliance and the absence of the required reasons to believe during search and seizure. This ruling aligns with the judgment of the Hon’ble High Court of Gujarat in Prakashsinh Hathisinh Udavat v. State of Gujarat[ii], which emphasised the necessity for proper authorisation and procedural integrity in search operations. Both cases reinforce the judiciary’s role in ensuring procedural fairness and protecting individual rights against arbitrary state actions, setting significant legal precedents for administrative law and constitutional protections in search and seizure operations.
End Notes
[i] [2024] 163 taxmann.com 555 (Allahabad)
[ii] [2019] 112 taxmann.com 124
Authored by Pratima Ajmera, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.
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