Facts of the Case

  • On 22‑07‑2025, a search and seizure operation was conducted by CGST officials at the residential premises and multiple business locations of the Petitioners.
  • Hard disks, CCTV footage, electronic gadgets and documents were seized.
  • Petitioners contend that seizure of CCTV footage from their residence violated the right to privacy, and that searches and seizures were conducted without adherence to procedural safeguards under Section 67 of the CGST Act and Section 103 of the BNSS Act.
  • Payments were allegedly made under duress and coercion, and certain refund applications were forced to be withdrawn.

Issues Involved

  1. Whether the search and seizure operations were conducted with valid “reasons to believe” under Section 67 of the CGST Act.
  2. Whether seizure of CCTV footage from the residential premises constituted a violation of fundamental rights, particularly privacy and due process.
  3. Whether any subsequent actions, including coercion in GST refunds, were lawful after allegedly unlawful seizure.

Petitioner’s Submissions

  • The panchnama (official record of search) did not properly record critical facts, especially seizure of CCTV footage.
  • Seizure of footage from the residence transgressed privacy rights of family members.
  • Coerced payments and forced withdrawal of GST refund applications were a direct consequence of alleged unlawful actions of officials.
  • Actions contravened procedural safeguards under Section 67 of the CGST Act and Section 103 of BNSS, 2023.
  • Reliance was placed on judicial precedents including Bhumi Associates v Union of India and Vallabh Textiles v Senior Intelligence Officer (2022) for the proposition that search operations must respect statutory and constitutional safeguards.

Respondent’s (CGST Department) Arguments

  • Search and seizure were carried out after recording valid “reasons to believe” about large‑scale tax evasion and fictitious GST entities linked to Petitioners.
  • Investigative actions were within statutory powers under Section 67 of CGST Act.
  • Information revealed involvement of several entities (evidenced in data charts) showing non‑operational firms and unjustified Input Tax Credit claims. 

COURT FINDINGS / ORDER (IN PROFESSIONAL LANGUAGE)

  • The High Court recorded detailed factual and evidential material regarding search operations and noted the series of interconnected firms linked to the Gumber family and alleged misuses of Input Tax Credit.
  • The Court examined the statutory mandate of Section 67 of the CGST Act, and the manner in which searches and seizures were conducted.
  • It was observed that the proper officer recorded requisite belief and followed the statutory scheme as prescribed under Section 67(2).
  • The Court undertook a factual review of data extracted from GST records and the non‑compliances by multiple associated entities.
  • On the issue of privacy, the Court applied the relevant legal standards, considering competing public interest in enforcement and privacy rights in residential premises.
  • Ultimately, the Court found that the search and seizure operations were carried out in accordance with law, and that Petitioners’ contentions regarding privacy and coercion did not establish unlawful conduct warranting interference.
  • Reliefs sought (including de‑sealing and reversing of GST credits) were either denied or subjected to appropriate legal standards. 

IMPORTANT CLARIFICATIONS

  • Search and seizure under the CGST Act require “reason to believe” which involves subjective satisfaction recorded by proper officer — this threshold was upheld by the Court.
  • Seizure of CCTV footage from a residential premise does not automatically violate privacy if justified by reason to believe based on statutory scheme.
  • Judicial review of such tax enforcement actions focuses on procedural legality and existence of statutory preconditions.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/PMS15092025CW138212025_155439.pdf

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