Facts of the Case

The petitioner, M/s. J and T Gems and Jewellery Pvt. Ltd., Bhubaneswar, challenged a confiscation/adjudication order dated 15.04.2023 (Annexure-10) passed under Section 130 of the OGST/CGST Act, levying fine and penalty of Rs. 5,48,13,320/-. The order was passed by one Mr. M.K. Pradhan, Deputy Commissioner of State Tax, who had also been authorised under Rule 139(1) (Form GST INS-01) by the Joint Commissioner, State Tax, Enforcement Range, Bhubaneswar, on 22.12.2022, to conduct the inspection, search and seizure at the petitioner's premises. The petitioner argued that the same officer who carried out the search and seizure could not also adjudicate and pass the final confiscation order, as this would make him "a judge of his own cause."

Issues Involved

  1. Whether an officer authorised to conduct search and seizure under Section 67/Rule 139(1) of the OGST/CGST Act could also validly pass the confiscation order under Section 130 of the Act.
  2. Whether the writ petition should be entertained on the remaining grounds, or whether the petitioner should be relegated to the statutory appeal remedy.

Petitioner's Arguments

  • The officer who conducted the search and seizure had no authority to also pass the final confiscation order, and by doing so had acted as a judge of his own cause.

Respondent's Arguments

  • The power to conduct search and seizure carried with it the power to pass the consequential order of penalty and fine under Section 130 of the OGST/CGST Act; and in any event, the confiscation order was appealable, so the writ petition, bypassing the alternative remedy, could not be sustained.

Court Order / Findings

  • The Court held that the authorization for search, seizure and inspection had been validly granted to the officer, and rejected the contention that passing the confiscation order under Section 130 made him a judge of his own cause — distinguishing this from adjudication under Sections 73 or 74, where such an objection might carry more weight.
  • Having rejected the jurisdictional challenge, and noting the order was appealable, the Court declined to examine the other grounds raised, disposing of the writ petition with liberty to the petitioner to pursue the statutory appeal.

Important Clarification

The one substantive point this order does settle is that the same officer authorised to search and seize goods under the OGST/CGST Act can also pass the consequential confiscation/penalty order under Section 130, without this amounting to bias or acting as a judge of one's own cause. However, the correctness of the Rs. 5.48 crore penalty itself, and the petitioner's other grounds, were left entirely to the statutory appeal.

Sections Involved

  • Odisha Goods and Services Tax Act, 2017 / Central Goods and Services Tax Act, 2017 — Sections 67, 130
  • CGST Rules, 2017 — Rule 139(1), Form GST INS-01

Decision – In Favour of

Decided in favour of the Department on the jurisdictional challenge; disposed of on the remaining grounds with liberty to appeal, without a decision on the merits of the penalty amount.

Case Details

Court: High Court of Orissa at Cuttack
Case No.: W.P.(C) No. 15952 of 2023
Coram: Dr. Justice B.R. Sarangi and Mr. Justice M.S. Raman
Date of Order: 17 May 2023

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