FACTS OF THE CASE

A cluster of writ petitions (including W.P.(C) 13821/2025) was filed by Genesis Enterprises, Kabun Enterprises OPC Pvt Ltd, Aayme Sourcing Creations OPC Pvt Ltd, Glitz International, and other firms (collectively referred to as Petitioners), owned or controlled by members of the Gumber family. The Petitioners challenged search and seizure operations conducted by the CGST Department in July 2025 at the family’s residential premises in Noida and various business premises in Delhi. They alleged procedural improprieties, violation of privacy, and coercion in respect of withdrawals of refund applications and reversal of Input Tax Credit (ITC).

ISSUES INVOLVED

  1. Whether the search and seizure carried out under Section 67 of the CGST Act, 2017 were unlawful or violative of statutory safeguards.
  2. Whether the seizure of CCTV footage from the Petitioners’ residence violated the right to privacy.
  3. Whether business premises were entered and sealed without proper authority.
  4. Whether alleged coercion or duress in payments, reversal of ITC, or withdrawal of refund applications warranted judicial interference at the investigation stage.

PETITIONER’S ARGUMENTS

The Petitioners argued that:

  • The panchnama was defective and did not accurately record the circumstances of the search, particularly regarding CCTV footage.
  • Seizure of CCTV footage from the residential premises violated privacy rights of family members present.
  • Business premises were accessed without proper consent, and locks were broken unlawfully.
  • Coercion and duress were used by officials to make payments and to force withdrawal of refund applications.
  • Actions of the GST Department exceeded the scope of Section 67 and violated CBIC Instruction No. 01/2022‑23 and settled judicial precedents.

RESPONDENT’S ARGUMENTS

The CGST Department contended that:

  • Detailed “reasons to believe” were recorded prior to the search, as required under Section 67(2).
  • The search was based on intelligence and prima facie material indicating large‑scale fake ITC availing and fraudulent refund claims through a web of fictitious entities connected to the Gumber family.
  • CCTV devices were seized as part of lawful inspection but had not been accessed; any access would be in accordance with SOPs and statutory safeguards.
  • All actions were consistent with statutory powers and aimed at uncovering tax evasion.

COURT ORDER / FINDINGS

The Delhi High Court, presided by Justice Prathiba M. Singh & Justice Shail Jain, held that:

  • Search and seizure powers under Section 67 CGST Act are intended to uncover tax evasion and are not recovery proceedings.
  • The authorities had placed sufficient material on record to justify “reasons to believe”, satisfying statutory requirements.
  • Judicial interference at the investigation stage was unwarranted in the absence of clear jurisdictional error or mala fides.
  • Allegations of coercion and duress involved disputed questions of fact, not suitable for adjudication in writ jurisdiction.
  • CCTV footage seizure did not by itself constitute a privacy breach since it was not accessed outside the presence of a family member and an authorized representative; strict safeguards were directed.

IMPORTANT CLARIFICATIONS

  • The Court emphasized that search and seizure are lawful where “reasons to believe” are documented.
  • Privacy concerns must be addressed through procedural safeguards — CCTV data not accessed without presence of Petitioners’ representative.
  • Issues of coercion, ITC reversal, and refund disputes are matters for further proceedings, not writ interference at the investigation stage.

SECTIONS INVOLVED

  • Section 67 — Inspection, Search, Seizure under CGST Act, 2017
  • CBIC Instruction No. 01/2022‑23 (administrative guidance)
    Right to privacy concerns were assessed in the light of constitutional jurisprudence.

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

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