The Delhi High Court has rejected the contention of the Department that it is open for the concerned authorities conducting search, to first pass an order under the first proviso to Section 67(2) of the CGST Act (directed not to deal with the goods in question) and, thereafter, take an informed decision whether to seize the goods.
The dispute involved issuance of show cause notice after more than 6 months of order under first proviso to Section 67(2) though within 6 months from the date of seizure order.
According to the Court, the order of prohibition is not a stop gap arrangement for the Department to take an informed decision whether to seize the goods or not, and that that an order of prohibition, is for all intents and purposes, an order of seizure.
It may be noted that the Court in Best Crop Science Pvt. Ltd. v. Superintendent [W.P.(C) 238/2023] however rejected the contention of the assessee that SCN issued after the prescribed time is required to be set aside.
The Court in this regard noted that the consequence of Section 67(2) merely provides that if no notice is issued within the stipulated period, the goods seized are liable to be returned, and that it does not postulate that the notice, issued after six months, is invalid.