FACTS OF THE CASE

Multiple writ petitions were filed by firms/entities controlled by members of the Gumber family—Genesis Enterprises, Kabun Enterprises OPC Pvt. Ltd., Aayme Sourcing Creations OPC Pvt. Ltd., A V Enterprises, Modern Creation, Glitz International, Fiore Enterprises OPC Pvt. Ltd., Bexley Creation Enterprises OPC Pvt. Ltd., and Backbone Overseas—challenging search and seizure operations conducted by the GST Department under Section 67 of the Central Goods and Services Tax Act, 2017 (“CGST Act”).

On 22 July 2025, the CGST officials conducted search and seizure at the residential premises of the Gumber family in Noida and various business premises. The Petitioners alleged procedural irregularities, violation of privacy in seizure of CCTV footage from family residence, coercive conduct for payments and withdrawal of refund claims, and unauthorized access to business premises.

ISSUES INVOLVED

  1. Whether the CGST Department had valid “reasons to believe” under Section 67 of the CGST Act to conduct search and seizure.
  2. Whether seizure of CCTV footage of the residential premises amounted to violation of privacy rights.
  3. Whether the manner of accessing and sealing business premises was unlawful.
  4. Whether alleged coercion and duress in reversing Input Tax Credit or withdrawing refund applications vitiated the action.

PETITIONERS’ ARGUMENTS

  • The panchnama did not correctly record events, including CCTV seizure from the residential premises, violating privacy.
  • Payments and withdrawal of refund applications were made under coercion and duress from GST officials.
  • The business premises access and sealing were unlawful, as locks were broken without due authority.
  • Officers exceeded authority under Section 67 of the CGST Act and responded contrary to BNSS 2023 and CBIC instructions. 

RESPONDENT’S ARGUMENTS (GST DEPARTMENT)

  • The GST Department had adequate reasons to believe large-scale tax evasion, fictitious firms, and wrongful availment of Input Tax Credit, justifying search and seizure under Section 67.
  • Seized electronic devices had not been accessed and would be handled by SOP in petitioner’s presence, negating privacy violation.
  • Access to business premises was obtained legally through tenant’s keys, and search followed protocol with independent witnesses.
  • Withdrawal of refund applications and payment reversals were voluntary actions by petitioners upon awareness of consequences. 

COURT ORDER / FINDINGS

• The Court held that search and seizure under Section 67 of the CGST Act was not unauthorized. Petitioners conceded lack of challenge to the authorization itself.
• “Reasons to believe” are a necessary precondition under Section 67. The presence of intelligence about fictitious firms and improper refund claims provided sufficient grounds for inspection and seizure.
• Access to business premises through tenant-held keys did not make the search illegal, as per panchnama.
• Privacy violation concerns regarding CCTV footage were acknowledged, and directions were issued to ensure CCTV data is accessed only in presence of family members, and only relevant data copied; rest to be returned.
• Directions also issued to ensure official communications are by proper channels; WhatsApp communications discouraged.
• Allegations of coercion/duress for payments required deeper examination in appropriate proceedings; current writ dismissed on merits without interfering in further remedies. 

IMPORTANT CLARIFICATIONS / DIRECTIONS

• CCTV footage of residential premises may be accessed only in presence of family representative and only relevant parts to be retained, rest returned.
• Due process must be followed for access to business premises including reasons to believe, recording of authority and following procedural safeguards under CGST and BNSS 2023.
• Official communications with investigated persons should follow formal channels; WhatsApp only in emergency.

SECTIONS INVOLVED

• Section 67 – Power of Inspection, Search & Seizure (Central Goods and Services Tax Act, 2017)
• Relevant application of BNSS 2023 and procedural safeguards under CrPC provisions applied to search & seizure.

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

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