The Gauhati High Court has held that the power to seal premises under Section 67(4) of the CGST Act is available only to facilitate search and seizure where access to the premises is denied. According to the Court, the provisions cannot be used to keep an assessee's premises under lock and seal after completion of the search.
Directing de-sealing of the office of a service provider, while holding it beyond the scope of Section 67(4), the Court also set aside the Prohibition Order under Section 67(2) issued in respect of office equipment such as laptops, desktops, printers, air conditioner and refrigerator. It was observed that such items were not goods liable to confiscation in the facts of the case and hence Section 67 would not be applicable here.
The High Court in Sri Surendra Sharma v. State of Assam observed the following:
Section 67(4) is not a standalone power; it can be invoked only in aid of search and seizure proceedings under Section 67(2).
Sealing of premises is permissible only where access is denied to the premises, almirah, electronic device, box or receptacle suspected to contain relevant goods or records.
Power to seal ceases once the search and seizure operation concludes. Authorities cannot continue sealing premises merely to preserve evidence or store seized items.
Office equipment such as laptops, desktops, printers, air conditioners, refrigerators, inverters and batteries are not goods liable to confiscation here as documents, books and things seized under Section 67(2) must have correlation to usefulness or relevance to proceedings under GST law.
Custody of seized documents, books and things must remain with the authorized officer and cannot be handed back to the person from whom they were seized while simultaneously treating them as seized material.
Documents, books and things may be retained only for so long as necessary for examination or inquiry.
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