Madhya Pradesh High Court delivered a significant ruling on the scope of judicial review in matters concerning search and seizure under the Central Goods and Services Tax Act, 2017 (CGST Act). The petitions, filed by a proprietor engaged in the retail trade of ceramic tiles and sanitary fittings, challenged the legality of search and seizure operations conducted by Central GST authorities on 18.10.2024 and 19.10.2024. The petitioner sought a declaration that the proceedings were illegal and requested the return of seized documents and goods.
The petitioner argued that the searches were conducted without a magistrate-issued warrant and that all goods stored in various godowns were duly accounted for in the firm’s accounting software and GST returns. The petitioner further contended that only the principal place of business required registration under the GST Act, and that the authorities had seized documents and records without sufficient justification. The petitioner also alleged coercion by the authorities to make a voluntary tax deposit and highlighted the adverse impact on business operations due to the continued seizure of goods and documents.
In response, the GST authorities maintained that the search and seizure were lawfully authorized by the Joint Commissioner, CGST, Bhopal, under Section 67(2) of the CGST Act. They asserted that the petitioner and related firms were suspected of clandestine supply and tax evasion, with goods found in unregistered godowns not declared in GST registration. The authorities emphasized that a show cause notice had already been issued under Section 74 of the CGST Act, and that the petitioner had the alternative remedy of seeking provisional release of seized goods by furnishing a bond.
The Court, after considering the submissions and relevant legal precedents, held that the writ petitions were premature. It relied on the Supreme Court’s guidance in CIT v. Laljibhai Kanjibhai Mandalia and Tata Cellular v. Union of India, reiterating that judicial review under Article 226 is confined to examining the decision-making process, not the merits of the administrative decision. The Court emphasized the principle of judicial restraint, noting that courts should not act as appellate authorities over administrative actions unless the decision is arbitrary, capricious, or unreasonable as per the Wednesbury principle.
The High Court further observed that the sufficiency or inadequacy of the “reasons to believe” recorded by the authorities for conducting the search and seizure is not justiciable at this stage. The Court noted that the petitioner had not produced valid documents to secure the release of the seized goods, despite the authorities’ willingness to release them upon such production.
Concluding, the Court found no grounds to exercise its jurisdiction under Article 226, as the petitioner had not exhausted the available statutory remedies and the administrative process was ongoing. The writ petitions were accordingly dismissed, reaffirming the limited scope of judicial intervention in GST search and seizure matters and the necessity for parties to pursue alternate remedies before seeking judicial review.
Case Reported at:
Case Name: Ankit Dubey v. Prinicipal Commissioner of Central Goods and Service Tax CGST Bhopal GST Bhawan and Ors.
Case Citation: (2026) taxcode.in 679 HC
