1. Office premises sealed under Section 67(4) of the Assam GST Act after search and seizure — challenge to sealing. (Para 2 , 4 , 9 )
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2026 Supreme(Gau) 1314
THE GAUHATI HIGH COURT, (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
DEVASHIS BARUAH, J.
Sri Surendra Sharma, Son Of Sri Madan Lal Sharma – Petitioner
Versus
The State Of Assam, Represented By The Commissioner And Secretary To The Government Of Assam, Department Of Finance And Taxation And Ors. – Respondents
WP(C)/3035 of 2026
Decided On : 10-08-2026
Advocates Appeared:
For the Petitioner:Mr. R.S. Mishra, Advocate
For the Respondents: Mr. B. Choudhury, Standing Counsel.
For the Petitioner:Mr. R.S. Mishra, Advocate
For the Respondents: Mr. B. Choudhury, Standing Counsel.
Under Section 67(4) of the GST Act, sealing of premises is permissible only when access is denied and only during an ongoing search; post-search sealing for storage is illegal.
Headnote:(A) Assam Goods and Services Tax Act, 2017 - Sections 67(2), 67(4), 67(7) - Powers of Inspection, Search and Seizure - Sealing of premises - Order of Prohibition - The power under Section 67(4) to seal or break open premises can be exercised only where access to the premises is denied and only in furtherance of a search under Section 67(2); once the search culminates in seizure, the power ceases - The first proviso to Section 67(2) permits an order of prohibition only in respect of goods liable to confiscation, not ordinary office equipment - The second proviso requires that seized documents/books/things be retained only so long as necessary for examination - Goods not liable to confiscation cannot be seized or retained. (Paras 30-34, 36-41)
(B) Statutory Interpretation - Function of a proviso - A proviso qualifies the generality of the main enactment and carves out an exception - The two provisos to Section 67(2) must be regarded as exceptions to the general mandate of search and seizure. (Paras 29-30)
Facts of the case:
The Petitioner, a tax consultant providing GST consultancy under a proprietorship firm, had his office premises searched on 01.04.2026 by the Respondent No. 4 under an authorization under Section 67(2). During the search, certain documents, digital signatures, electronic items were seized and an Order of Seizure in FORM GST INS-02 was issued; the seized items were handed back to the Petitioner with a direction not to deal with them without permission. On the same day, an Order of Prohibition in FORM GST INS-03 was issued regarding desktop computers, laptops, 426 files, printers, batteries, inverter, air conditioners and refrigerator. The premises were then sealed by pasting a paper reading “SEALED BY STATE GST DEPARTMENT, ASSAM, ORDER OF PROHIBITION” and the keys were taken. The Petitioner was arrested on 02.04.2026 but later granted bail. Representations for de-sealing were ignored. The Petitioner challenged the sealing and the order of prohibition.
Findings of Court:
The sealing of the Petitioner’s office premises was illegal, unauthorized, and contrary to Section 67(4) because there was no denial of access; the power under Section 67(4) is only for facilitating search, not for storing seized goods post-search. The Order of Prohibition was invalid because the goods mentioned (computers, air conditioners, etc.) were not goods liable to confiscation under Section 130 of the Act. The handing over of custody of seized documents to the Petitioner was inconsistent with the requirement that the proper officer retain them. The Court directed de-sealing by 12.08.2026, with liberty to the Respondents to take fresh custody of the seized documents if still necessary, and set aside the Order of Prohibition.
Issues: (i) Whether the sealing of the Petitioner’s office premises under Section 67(4) was valid when access was not denied? (ii) Whether the Order of Prohibition under the first proviso to Section 67(2) could cover goods not liable to confiscation? (iii) Whether the retention of seized documents by handing them back to the Petitioner was permissible?
Ratio Decidendi: The court ruled that Section 67(4) is a power ancillary to the search under Section 67(2) and can only be invoked when access is denied; it ceases once the search is concluded. The first proviso to Section 67(2) applies only to ‘goods’ liable to confiscation, not to office equipment. The second proviso mandates that seized documents be retained only as long as necessary. Any action beyond these limits is illegal. Result : The writ petition is disposed of with directions to de-seal the premises, quash the Order of Prohibition, and permit the Respondents to take fresh custody of seized documents if necessary.
Legal Category Hierarchy
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tax law
- goods and services tax
- statutory interpretation
- practice and procedure
Table of Contents
2. Petitioner argued sealing illegal as access not denied; Respondents argued sealing necessary to prevent evidence tampering. (Para 14 , 15 , 16 )
3. Sealing held illegal; directed de-sealing and set aside order of prohibition with liberty to take custody of seized documents. (Para 43 )
4. Under what conditions can an officer seal premises under Section 67(4) of the GST Act?
Only when access to premises is denied and during search proceedings, not after seizure is completed. (Para 36 , 37 , 38 , 39 )
5. What types of property can be seized under Section 67(2) of the GST Act?
Goods liable to confiscation, documents, books, or things useful for proceedings. Office equipment like air conditioners are not 'things' under the Act. (Para 23 , 24 , 25 , 26 , 27 , 28 , 32 )
6. When can an order of prohibition be issued under the first proviso to Section 67(2)?
Only for goods that are liable to confiscation when it is not practicable to seize them. (Para 31 , 32 )
7. What is the duration for which seized documents or books can be retained?
Only for so long as necessary for examination and inquiry, and must be returned after notice or within 30 days. (Para 31 , 33 , 34 )
8. Can sealing of premises be used as a storage measure after search?
No, Section 67(4) power ceases once search proceedings conclude; sealing cannot be used to store seized items. (Para 38 , 39 , 40 , 41 )
JUDGMENT :
DEVASHIS BARUAH, J.
Heard Mr. R.S. Mishra, the learned counsel appearing on behalf of the Petitioner. Mr. B. Choudhury, the learned Standing Counsel, Finance and Taxation Department, Government of Assam appears on behalf of the Respondent Nos. 1 to 4.
PREFACE
2. The Petitioner herein has invoked the extraordinary jurisdiction of this Court challenging the action on the part of the Respondent Authorities in sealing the office premises of the Petitioner in purported exercise of the powers under Section 67(4) of the Assam Goods and Services Tax Act, 2017 (for short, "the Act of 2017").
BRIEF FACTS
3. The Petitioner is a tax consultant engaged in providing tax consultancy services in respect to GST, income tax and other allied taxation laws. The Petitioner is providing the aforesaid services under the name and style of the proprietorship firm, namely, "M/s Sharma and Associates". The office of the Petitioner is situated at Station Road, Bokajan Bazar, Bokajan, Diphu in the district of Karbi Anglong, Assam.
4. On 01.04.2026, the Respondent No. 4 on the strength of an authorization for search issued by the Respondent No. 3 under Sub-Section (2) of Section 67 of the CGST/AGST Act of 2017 in FORM GST INS-01, bearing Reference No. ZD180326024870F and Case ID AD1803260044938 dated 30.03.2026, conducted an inspection/search of the office premises of the Petitioner.
5. During the course of the said search, certain documents, digital signatures, electronic items, etc. were seized and an Order of Seizure in FORM GST INS-02 dated 01.04.2026 was issued by the Respondent No. 4 acknowledging the seizure of the items mentioned therein.
6. A copy of the said Order of Seizure in FORM GST INS-02 has been enclosed as Annexure-B to the writ petition. In Column No. B which relates to the description of the books/documents/things seized, it is mentioned, "AS PER THE ANNEXURE ATTACHED." A perusal of the Annexure to the said Order of Seizure shows various books/documents/things were seized and marked as Exhibit 1 to Exhibit 105.
7. It is further seen from the said Order of Seizure that upon seizing the books/documents/things, the same were handed over to the Petitioner with a direction that the Petitioner shall not remove, part with, or otherwise deal with the goods or things except with the previous permission of the Respondent No. 4. A question duly arises as to whether it was permissible to hand over the seized books/documents/things to the Petitioner in terms with Section 67 of the Act of 2017. This aspect, this Court shall deal with in the latter stage of the present judgment.
8. On the same date, an Order of Prohibition in FORM GST INS- 03 was issued to the effect that the Petitioner herein shall not remove, part with, or otherwise deal with the goods, the description of which has been mentioned in the Annexure to the said document. A perusal of the Annexure to the Order of Prohibition in FORM GST INS-03 reveals that the order relates to two desktop computers, six laptops, 426 files, printer, batteries, inverter, air conditioners and refrigerator. The Petitioner admittedly is not in the business of taxable supply of desktops, computers, laptops, printers, batteries, inverter, air conditioner and refrigerator. The said goods are in the office premises of the Petitioner used for running his office for providing tax consultancy work. The question whether it was at all permissible would be also discussed in the latter stage of the present judgment.
9. It is the further case of the Petitioner that on the same day, the Respondent Authorities completely sealed the office of the Petitioner by pasting a paper on the shutter of the office with the remarks, "SEALED BY STATE GST DEPARTMENT, ASSAM, ORDER OF PROHIBITION." The Petitioner alleges that after sealing the office premises, the Respondent No. 4 also took away the keys without issuing any acknowledgement.
10. Subsequent thereto, the Respondent Authorities registered a case bearing Case No. CT/ENF/ARST/202
