Case Details: Sri Sai Food Grain and Iron Stores Versus State of Bihar (2025) 30 Centax 246 (Pat.)
Judiciary and Counsel Details
- P. B. Bajanthri & Alok Kumar Sinha, JJ.
- Shri Bijay Kumar Gupta, Advertisement for the Petitioner.
Facts of the Case
The petitioner, a registered dealer under the Bihar GST Act, 2017, was subjected to an inspection at its business premises under Section 67 of the CGST and Bihar GST Act, 2017. Pursuant to the inspection, a demand order was issued under Section 74 of the said statutes. The petitioner contended that the inspection and subsequent proceedings were in complete violation of Section 67(10), which mandates the presence of two independent witnesses during inspection or search operations.
It was submitted that the inspection report bore signatures of the proprietor’s son and a staff member, both of whom were associated with the petitioner’s business and thus did not qualify as independent witnesses. The petitioner further submitted that the seizure order relied upon documents which were tampered with or interpolated while the matter was sub-judice, thereby rendering the basis of the proceedings fundamentally flawed. The matter was placed before the High Court of Patna.
High Court Held
The Patna High Court held that the statutory mandate under Section 67 of the CGST and Bihar GST Act, 2017 requires the presence of two independent witnesses during the conduct of inspection and search operations. It observed that the signatures on the inspection report were obtained from individuals directly connected with the petitioner, which did not satisfy the requirement of independent attestation. The Court further noted that the order of seizure was vitiated due to reliance on tampered or interpolated documents during a period when the dispute was pending adjudication. Concluding that the foundational requirements of a lawful inspection and seizure had not been complied with, the Court set aside the impugned demand order passed under Section 74.
